FTSE index ended down 12% for 2018, Brexit angst and international development concerns to blame

  • London stocks ended 2018 slow with the FTSE drifting through the 6700’s to the downside posting a low of 6676 from a high of 6767 as investors weighed up signs of enhancing relations between the United States and China versus frustrating Chinese production data.

The FTSE 100 ended the last trading day of the year down 0.1% at 6,728.13, settling around the most affordable level given that the Brexit vote. Throughout the Channel mainland European shares in the pan-European Stoxx 600 were up 0.35% with the German and Italian markets closed – (The Stoxx was on track to log a 13% loss for the year).

Brexit concerns stick around which is half to blame for the index ending down 12% for 2018. It has been the worst year considering that the 2008 monetary crisis. Concerns over global trade and development have been a widespread weight on global equity rates. On the Brexit front, it can be a double-edged sword for UK stocks, thinking about favorable headlines that increases the value of the pound weighs on multinationals that depend upon a weaker domestic currency. Reports that the Brexit deadline could be pressed back if Prime Minister Theresa May’s deal gets voted down by Parliament sent sterling greater and weighed on stocks. In a Sunday Times interview, International Trade Secretary Liam Fox said that the opportunities of Britain leaving the EU were 50-50 if Parliament rejects May’s withdrawal arrangement.

Somewhere else, equity markets have actually been afflicted by the light of the Chinese economy following the PMIs miss over night which has fanned the flames of issues over international development for 2019. The information highlighted weakness in Chinese production, with the sector moving into contraction for the very first time in over two-years and the US-China trade spat is harming Chinese exports.

On a more positive note, from weekend press reports, Trump hailed progress over Sino/US trade relations, and a mid-level US delegation is apparently going to be heading to China in the week of January 7th to start the next round of trade talks. Trump tweeted on Saturday: “Just had a long and very excellent call with President Xi of China. Deal is moving along effectively. If made, it will be really comprehensive, covering all topics, areas and points of dispute. Huge progress being made!” A statement on Sunday from Lu Kang, the representative for China’s foreign ministry, seemed to validate Trump’s trade optimism.

Meanwhile, the partial U.S. federal government shutdown continues to concern financiers, supporting a risk-off play in the FX space. President Donald Trump tweeted prior to the weekend and threatened to “close the Southern border completely,” if congressional Democrats don’t approve funding for a border wall, grumbling that the U.S. was losing money to Mexico through the North American Open Market Arrangement, checked in late November after 15 of settlements.

Best and worst

As for the performers, Ocado Group (OCDO) ended 790.00 p, up 2.86%. Then Rentokil Preliminary (RTO) ended 335.20 p up 2.51% with Micro Focus International (MCRO) ending 1,381.00 p
up 2.07%. The worst entertainers were 3i Group (III) 773.40 p, down -2.77%, British American Tobacco (BATS) ended 2,505.50 p, down -2.47% and Next (NXT) ended 3,979.00 p, down -1.70%.

FTSE levels

The index stays submerged listed below the 50% Fibo of the 2016 bull trend with a low, (6536 ), nevertheless, recuperating to piercing the monthly pivot located at 6674. Next target is the 61.8% fibo of 6413 and the 76.4% located at 6061. On the upside, an immediate target sits at R1 6812.

  • Assistance levels: 6586 6448 6360 Resistance levels: 6812 6900 7038