FTSE To 7366 As Coronavirus Fears Persist

Currency prices
Fiona Cincotta
By :  ,  Senior Market Analyst
The FTSE dropped sharply on the open and remained under pressure across the session, extending losses after Wall Street also opened lower. Fears over the spread of China’s coronavirus continue to knock stocks with exposure to China and weigh on risk sentiment.

Those stocks closely tied to China, such as the heavy weight miners and oil stocks were the hardest hit, along with tourism and travel firms. Burberry also extended losses for a third straight session.

Wuhan, the city with 11 million inhabitants at the centre of the outbreak under lock down. The number of people infected and the number of countries with the virus still rising, investors are growing increasing concerned that global growth could be affected. Investors are attempting to gauge the potential impact on airlines, retailers and to China’s consumption of metals and oil.

Quite simply traders are not prepared to keep risk on the table until there is more clarity over how this will develop. With 16 cases suspected in the US, 4 in Scotland and over 600 in China markets remain fearful.

Levels to watch:
The FTSE dropped 0.8% across Thursday, hitting a 5 week low of 7501 in its 4th straight session of losses.
Immediate support can be seen at 7455/ (low 8th Jan & 50 sma), before the bears will look to target 7366, the 100 sma.
On the flip side resistance exists at 7645 (yesterday’s) , before 7680 and 7730 (high 30th July)

Related tags: UK 100

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