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The FTSE has fully recovered from the discovery of the omicron variant, rising again as mining stocks got a boost from a Chinese plan for more economic stimulus. The blue-chip index climbed 1.5pc to close at 7,339 – edging above the 7,310 points it printed on Nov 24 before it plunged as the omicron variant of Covid was identified in South Africa. The FTSE’s rise was reflected on markets elsewhere, with the Nasdaq index surging 3pc and the S&P 500 almost back to pre-omicron levels.
Miners such as Glencore, Anglo-American and BHP led the FTSE as copper imports to China hit their highest level since March and iron ore imports hit an 18-month high.
Power shortages curbing the Chinese economy are easing, while Beijing also pledged to bolster its economy by cutting the amount of cash banks need to hold in reserve, releasing 1.2 trillion yuan (£142bn).
Positive comments from pharma giant GSK and Dr Anthony Fauci, the top US pandemic adviser, added to the cheer on the market.
Asian Session
Stocks and U.S. futures rose along with Asian dollar bonds as optimism about vaccines eased concerns about the omicron variant and China policies helped buffer against fallout from mounting property debt distress.
MSCI Inc.’s Asia Pacific benchmark advanced for a second day. The onshore yuan strengthened to its strongest level since 2018. Pfizer Inc.’s shot has been shown to provide a partial shield against the omicron variant in a South African study. European futures fluctuated.
Risk assets are recovering after a bout of turbulence sparked by the emergence of the new virus variant. So far, omicron cases haven’t overwhelmed hospitals and vaccine developments are encouraging. The S&P 500 and the Nasdaq 100 chalked their biggest gains since March and gauges of volatility retreated. Helping sentiment, the House passed a bill paving the way for a quick debt ceiling increase in the U.S.
FTSE 100 live outlook prediction analysis for 8th December 2021
A powerful rip higher across the board yesterday saw the FTSE100 and the S&P500 power through the various resistance levels without much pause for breath! The S&P looks like it will shortly be testing the 4720 daily resistance level though as I wrote this its at the top of the Raff channels around the 4705 level. Likewise the FTSE100 is at the top of the 20d Raff, and at yesterdays closing price of 7339 so we could see a small dip and then a further rise later play put on this.
Unsurprisingly we have recovered from the Omicron driven drop pretty easily, however, societal restrictions stemming from that are now firmly in place. Funny that! As was said from the very beginning by the South Africans, it was a mild, yet contagious…
So, that aside, we have stalled at the 7335 daily resistance level but with things now looking more positive we still remain on track for the 7500 year end. However we also have 7375 as the next daily resistance in play, and if we see this today we should see a stutter here and the bears have another go. That level may well tie in with the S&P hitting the 4720 level as well.
Above 7375 then the R2 level of 7432 is the next key one, though I don’t think we will get that high today. Would be surprising to have another rip higher today after yesterday as you would expect some consolidation/cooling of the afterburners!!
For support the daily pivot at 7299 is the main one to look for as that also ties in with he 2h Hull MA, albeit not the first test (7050 last week was the first) and then looking fairly key lower down, the 25ema on the daily has gone bullish again, with 7225 support. Should it get that low today then a long here is worth a go. We also have the 30m 200ema here currently to also give it a bit more strength. We may well see 7300 hold initially on any small dip down to start with.
If the S&P were to get quite bearish as well and break below the 4680 level then then 4620 (S1) level is the next major support. As per the FTSE100, the daily Moving Averages have gone bullish with support just above here at 4626. Again, a long here is probably worth a go, but we probably wont drop that low till 4720 has been tested.
So, expecting a bit of a dip and rise again though a bias on consolidation after that rip higher yesterday. It certainly will have squeezed a lot of the bears that were holding from the Omicron dip! Good luck today.
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