FTSE 100 live outlook prediction analysis for 23rd March 2021
Airline and travel-related stocks dragged on London’s markets on Monday over fears international holidays won’t resume or may be heavily restricted this summer.
It comes after ministers said it was too early to book holidays abroad, pointing at rising infection rates in Europe and worries holidaymakers could bring back vaccine-resistant Covid variants to the UK. Restrictions were also extended across much of Europe over the weekend.
Airline stocks had been gearing up for business after a pandemic-hit year, reporting a surge in bookings. Leading the pack of declines as the top faller on the benchmark FTSE 100 was British Airways parent IAG, which fell 10.8p to 196p. Hot on its heels was engine maker Rolls-Royce which dropped 5.1p to 111.9p.
Joining the pack as some of the biggest fallers on the mid-cap FTSE 250 index was easyJet, which lost 54p to 941.2p, closely followed by Tui, which dropped 19.6p to 378p.
The declines, however, were not enough to upend the markets, which nudged higher after shaky earlier sentiment. The FTSE 100 closed 17.39 points higher at 6,726.1 while the FTSE 250 rose 35.58 points to 21,455.89.
China Sanctioned
The U.S., U.K., the EU and Canada imposed sanctions against China over alleged human rights abuses on the Uyghurs in Xinjiang, drawing an immediate reaction from Beijing. The EU kicked things off with sanctions that target four Chinese nationals and one entity. The U.S., Canada and the U.K. — chairing the Group of Seven meetings this year — largely mirrored these actions that are largely symbolic and unlikely to impact China’s economy or behavior. China reacted by saying the move was based on lies and disinformation and said it would sanction 10 individuals and four entities on the EU side, saying the measures “harm China’s sovereignty and interest” and weren’t based on facts.
Stronger Stocks
Asian stocks looked set for a higher open, tracking rallies in the U.S. as Treasury yields dipped ahead of a series of closely watched auctions this week. Futures climbed in Japan and in Hong Kong, while Australian contracts edged lower. Technology shares led gains in the U.S. that saw the Nasdaq 100 rise 1.7% and the S&P 500 Index up 0.7%. Turkey’s markets tumbled after the central bank governor was ousted. The dollar weakened slightly and oil edged higher after its worst week since October. Bitcoin is raising energy concerns while trading around $50,000.[Bloomberg]
US & Asia Overnight from Bloomberg
Asian stocks fell Tuesday as Treasuries and the dollar edged higher, with traders monitoring setbacks in the recovery from the pandemic and braced for U.S. auctions that will test demand for bonds.
Equity indexes slipped into the red across the region, with China’s CSI 300 nearing its year-to-date low. U.S. and European equity futures retreated after an overnight rally on Wall Street that saw the Nasdaq 100 outperform the S&P 500, aided by a drop in long-term borrowing costs.
The 10-year U.S. Treasury yield subsided further from the highest in about 14 months amid hopes of improved demand in this week’s heavy round of sales. The offerings include a seven-year note, a maturity that fared poorly in last month’s auction, sending benchmark yields sharply higher.
Oil prices slid and the dollar rose. New Zealand’s currency erased this year’s gains after the government took steps to rein in surging property prices, cooling speculation about central bank rate hikes.
The stabilization in bond yields provided some relief for investors fretting that heavy U.S. spending on the recovery could reignite inflation and force tighter central-bank policy. The Biden administration is considering a multitrillion-dollar economic plan to follow the stimulus package signed earlier this month.
Encouraging economic data shouldn’t distract from the progress still to be made, Treasury Secretary Janet Yellen emphasized in prepared remarks for her Congressional testimony on Tuesday. The Federal Reserve will continue to support the U.S. economy for as long as it takes, Chairman Jerome Powell noted in a speech for his accompanying appearance.
FTSE 100 Outlook | Trading Signals | Forecast | Prediction | Analysis
Bit of bear Tuesday kicking in overnight as the S&P has dropped off the 3955 resistance level yesterday where we had our red coral line – a nice 25 point drop to now test the Hull moving average support at 3927. We may well see this hold initially and help the FTSE to put in an initial rise.
With the drop from 6735 yesterday the 2 hour chart has gone bearish, with resistance at 6711 initially, sad then the 2 hour coral resistance at 6742 above that. Should it get back up to this area then a short here looks to be worth a go. It will be interesting to see if we can push past the 6712 level initially though.
The bulls will of course be keen to get the price back above 6700 as a slide down towards the 6635 level is likely to play out if they cant.
Initial support today is at the 6660 level where we have the key fib, and also just below the S1 level of 6667. Yesterdays low at 6645 and as mentioned the daily support at 6635 would be next up and we have the bottom of both the Raff channels in this area as you can see on the chart below. If the bears were to break below the Raff channels though we could well start to see a lot more bear kick in over the next few weeks.
A lot will hinge on the S&P today and if it can hold that 2 hour support at 3927. If so, then the bulls will need to break 3945 initially, as that may well lead to the fib level at 3963.
Bears are getting stronger it feels like though! Keep an eye on 6711 and 6742 for resistance today, 6660, 6635 for support. Good luck today.
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