Technical analysis for FTSE 100 for 1st October 2024
The FTSE 100 ended lower on Monday amid broader market weakness, though it clocked quarterly gains, while the midcap index slipped after Aston Martin issued a profit warning.
The blue-chip FTSE 100 closed 1% lower, clocking marginal monthly losses, though recording its fifth consecutive quarter of gains.
Rightmove dropped 7.7% after Rupert Murdoch's REA Group its $8.29 billion takeover pursuit following a fourth bid rejection from the real estate portal.
The midcap FTSE 250 index slipped 0.9%, with Aston Martin leading losses, down 24.5%, after the luxury carmaker warned of lower annual profit and cut its production forecast. The automobile subindex dropped 6.7%.
Most FTSE 350 sectors ended lower, with precious metal miners slipping 2.9%, tracking falling gold prices.
On Monday, data showed Britain's economy grew more slowly than previously thought in the second quarter, but there were positive signs from household finances and business investment that could encourage finance minister Rachel Reeves as she prepares next month's budget.
Risk sentiment had flourished this month after the U.S. Federal Reserve eased its monetary policy, while a slew of stimulus measures announced by top-commodity consumer China gave a leg up to index heavyweight energy and mining stocks.
Asia & Overnight
Asian stocks eased near two-and-half-year highs on Tuesday and the U.S. dollar firmed following hawkish comments from Federal Reserve Chair Jerome Powell that scuppered bets of big interest rate cuts, while Mid-East tension kept risk sentiment in check.
Oil prices were steady and gold traded just below a record high touched last week as investors awaited U.S. labour data for more clarity on the pace of U.S. rate cuts.
MSCI's broadest index of Asia-Pacific shares outside Japan was 0.13% lower at 620.05 on Tuesday, just below the two-and-a-half-year high of 627.66 touched on Monday. The index is up 17% so far in the year.
Japan's Nikkei rose 1.5% in early trading after shedding 4.8% on Monday as investors contended with perceived monetary policy hawk Shigeru Ishiba winning a contest to become the country's prime minister.
Investor focus has been centred around the pace of rate cuts from the Fed after the U.S. central bank kickstarted an easing cycle last month with a 50 basis-point cut. Fed Chair Powell indicated on Monday the U.S. central bank would likely stick to quarter-percentage-point cuts henceforth after new data boosted confidence in economic growth and consumer spending.
In commodities, oil prices were stable in early trading on Tuesday as the prospect of additional supply amid lacklustre global demand growth offset worry that an escalating Middle East conflict could disrupt exports in the key producing region. Brent crude futures rose 0.11% to $71.78 a barrel. U.S. West Texas Intermediate crude futures gained 0.07% to $68.22 a barrel.
FTSE 100 technical analysis for today, 1st October 2024
Start of the new month again so an initial kick up to start with as the new month money comes in may well materialise at the open, and a test of the 8290 area where we have 2h resistance from both the Hull MA and the coral line.
The bulls defended the 8255 level yesterday but the bounce was modest, and should they break that today then a slide down to the next key support around the 8220 area is likely. After any initial rise then we may well see a bear Tuesday play out. The Chinese stimulus measures have certainly helped the domestic stock markets, but the excitement hasn't spread to the West at all, unlike on previous occasions. Shows there is now a greater disconnect between East and West playing out.
If the bulls break above the 8290 level then the 8330 is next up and has had a few reactions on the previous tests of this, and then the daily resistance level at 8345 still remains. Higher up, but looking unlikely for today, is 8390 and the next round number at 8400. Might be a big ask today to test that area though. Also note that 8360 is the top of the declining 10d Raff channel.
For the bears, if they hop on any rallies this morning, and 8280-8290 does look decent resistance, then they will be looking for that 8220 mentioned, and also to try and break the 8200 round number.
That would likely lead to a test of the 8180 area and possibly even S2 at 8161 today.
On the news front there is US Manufacturing PMI at 14:45, and then ISM Manufacturing PMI at 15:00, along with JOLTS then too. We may therefore see a bit of chop at 15:00.
Yesterday Fed Chair Powell hinted at a return to 25bp rate cuts and noted that the Fed is not in a rush to cut rates quickly which saw the S&P500 spike down to test the 5700 area before recovering. The recovery has made the 2h chart bullish for today with decent support at the 5753 level to start with today.
Good luck today.
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