The trade tensions between the US and China were reflected in another day in red as selling intensified across markets with the UK faring slightly better than European indices: the CAC lost over 2% while the DAX lost 1.7%. GBP was flat against USD on the day while Brent crude dropped another 0.8% to around the $69.8 level having peaked over $76 at the end of April
FTSE 100 -0.9%
Ex Div from CNA, HSX ADM and BP weighted on the index. BDEV and SN rallied on results up 2.4% and 1.8% while BT dropped 4% and MRO 2.8% on earnings.
FTSE 250 -1.3%
SXX rallied almost 10%, recovering some ground from its recent plunge following results and a placing. ACA rallied on a production update while FCH and INDV gained 3% showing some signs of life after capitulatory falls in value over the past few weeks. MTRO, the most shorted share on UK markets, continues to tumble losing another 8% and is now at a value of 541p from a value of over 2200p in late Feb 19.
AIM All-Share -0.9%
All of the big caps were in the red today with HCM down 9% while ASOS and FEVR were off by around 2.8%. BIDS continued to catch a bid up another 15% having rallied over 400% YTD (from a very low base having tumbled from over 1300p in 2015) Holders of FST have suffered more losses as the share lost another 36% today. EVR lost over 20%
In technical terms, the UKX has dropped below its 8 and 21 EMAs, convincingly dropped its 50MA and today tested and bounced on its 200MA. This highlights that the short- and medium-term trends have changed. The longer-term 200MA trend retained a downward slope since the sharp sell-off in late 2018. On that basis, the latest selling could be viewed as in keeping with the longer-term trend. The FTSE 250 plunged through both its 50 MA and 200MAs today closing near the lows. Meanwhile the AIM All-Share never retook is 200MA , it tested and rejected this last week and then sold-off. Clearly moving averages are not magical quantities and are lagging indicators of price action. They do provide useful insights on the market memory and underlying sentiment and are also often used in buying programmes and by individual investors and traders. Price action around these important levels often gives insight to future direction and the next few days will be key in defining the health of this rally.
Market sentiment reflects the selling as the fear indices across the world continue to rally: the CBOE VIX is above 20 for the first time in 2019 while the F&G Index has dropped to 36, its lowest score so far in 2019