Home » Market Narrative » UK Market Update Tues 14 May 19: Markets Bounce as Trade Fears Abate

UK Market Update Tues 14 May 19: Markets Bounce as Trade Fears Abate

Volatility has certainly returned with a vengeance as today saw UK markets swing in the opposite direction to yesterday with the FTSE 100 gaining 1%, the 250 1.3% with outperformance by resource sectors. Some of this may be attributed to a weaker pound which dropped almost 0.5% to the $1.29 level as hopes of a CON-LIB agreement on Brexit fade.  Brent added almost 2% which lifted the oilers and helped the UKX and NMX. It is more likely that a barrage of Trump Tweet professing his friendship with China’s Chi and his hopes for a deal may have reassured markets. Certainly, the US markets have taken cheer opening strongly and recovering some of yesterday’s big losses. It will be illuminating to see if these are held or if the rally fades with trading.

Market sentiment shows a retreat from highs on the VIX scores as the US and UK VIX scores dropped 12-15% but remain relatively elevated. The Fear and Greed Index stands at 32 which is the most fearful of 2019 so far but still a far cry from the single digit panic scores of Dec ’18.  Gold pulled back almost 0.5% having tested the  $1300 level and rejecting .Technicians are drawing attention to the large double-top formations on the US markets which often signal market tops, combined with inverting yield curves and a bull run older than Methuselah (in market terms), there is no shortage of doom sayers.

FTSE 100 Stars n Dogs (+1%)

The UKX regained its 200MA today and closed  near the highs which suggest that tomorrow may continue in an upward move unless the US sell-off.  Today's stars were EVR, SPX and DCC  adding 4% or more while VOD dropped 3.8% and OCDO over 4%

FTSE 250 Stars n Dogs (+1%)

GRG rallied another 15% on earnings while ERM was up 8.5% with MTRO climbing off the floor with a 7% boost post placing news EIG, KIE and INDV all rallied 5% or more. Today’s dogs were RSW on poor earning -6.5% and AJB -5.6% while IGG lost 3.6%

AIM ALL_Share (+0.4%)

In the big caps, FEVR Boo and ASC all added 2-3% while HCM and BUR continue to slide.  EDL added over 80% on news of a mining restart. There were several significant name in the -5% and lower category including FOG, GFM, ANG, QXT, CASP,. While SOU was down almost 10% . PMP shocked the market with earnings news and dropped 25% while IOF lost over 36% on news of a placing

While the techMARK regained 0.4% today, tits change in trend from overall  to a short term bearish may be indicating that we are due more selling.  Some protection is worth considering as the summer looks to be a volatile period.

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