UK FTSE 100 (.FTSE) hit by heavy sell-off as coronavirus fears spread
The FTSE 100 has tumbled 2.2% as fears over the coronavirus spread, after the death toll in China rose to 81 and the number of cases reported worldwide hit 2,744.
The UK blue-chip index slumped 165 points, or 2.2%, to 7,421 wiping out all of the gains from Friday’s rally on a measured assessment from the World Health Organization.
‘This has the potential to really rattle markets,’ said Neil Wilson, chief market analyst at Markets.com. ‘And with stock markets having been at or very near all-time highs before all this broke, this is a perfect selling opportunity.
‘The problem for most investors is this is just not a risk event they are prepared for – a true black swan in the making. If politics is hard to grasp for most buysiders then virology is impossible.’
On the FTSE 100, travel stocks and companies heavily exposed to China’s economy were the heaviest fallers.
British Airways owner International Airlines Group (IAG) fell 5.1% to 589.6p, EasyJet (EZJ) was down 4.2% to £14.20 and cruise ship operator Carnival (CCL) fell 5.2% to £32.52.
Fashion designer Burberry (BRBY), which relies on China for a large proportion of its sales, fell 5.4% to £19.87.
Miners, sensitive to the economic performance of China, the world’s top metals consumer, were also heavily in the red. Fallers included:
- Anglo American (AAL) -5.5% at £20.15;
- Evraz (EVR) -5.7% at 357.5p;
- Antofagasta (ANTO) -5% at 832.2p;
- Rio Tinto (RIO) -4.7% at £42.31;
- Glencore (GLEN) -4.4% at 220.4p.
The sell-off was broad-based, with just three stocks on the index escaping losses: NMC Health (NMC), Polymetal International (POLY) and National Grid (NG).
On the FTSE 250, the Fidelity China Special Situations (FCSS) investment trust was the heaviest faller, down 6.1% at 225p.
Rival JPMorgan Chinese (JMC), fell towards the bottom of the FTSE Small Cap index, down 6.7& at 336.
Among ‘small-cap’ stocks, Amigo (AMGO) was the heaviest faller, losing nearly a third of its value to trade 32% lower at 46.4p after founder James Benamor put the subprime lender up for sale.
Benamor holds 60.6% of the shares. Disgraced fund manager Neil Woodford and his embattled successor at Invesco, Mark Barnett, had been heavy backers of the company but both sold their stakes below disclosable levels in recent months.
Overall, the bias in prices is: Sideways.
The projected upper bound is: 7,585.21.
The projected lower bound is: 7,241.33.
The projected closing price is: 7,413.27.
A big black candle occurred. This is bearish, as prices closed significantly lower than they opened. If the candle appears when prices are “high,” it may be the first sign of a top. If it occurs when prices are confronting an overhead resistance area (e.g., a moving average, trendline, or price resistance level), the long black candle adds credibility to the resistance. Similarly, if the candle appears as prices break below a support area, the long black candle confirms the failure of the support area.
During the past 10 bars, there have been 4 white candles and 6 black candles for a net of 2 black candles. During the past 50 bars, there have been 29 white candles and 21 black candles for a net of 8 white candles.
Momentum is a general term used to describe the speed at which prices move over a given time period. Generally, changes in momentum tend to lead to changes in prices. This expert shows the current values of four popular momentum indicators.
One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 17.0527. This is an oversold reading. However, a signal is not generated until the Oscillator crosses above 20 The last signal was a buy 1 period(s) ago.
Relative Strength Index (RSI)
The RSI shows overbought (above 70) and oversold (below 30) areas. The current value of the RSI is 39.41. This is not a topping or bottoming area. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a sell 19 period(s) ago.
Commodity Channel Index (CCI)
The CCI shows overbought (above 100) and oversold (below -100) areas. The current value of the CCI is -242.This is an oversold reading. However, a signal isn’t generated until the indicator crosses above -100. The last signal was a buy 1 period(s) ago.
The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a sell 15 period(s) ago.
Rex Takasugi – TD Profile
FTSE 100 INDEX closed down -173.930 at 7,412.050. Volume was 4% below average (neutral) and Bollinger Bands were 35% narrower than normal.
Open High Low Close Volume___
Short Term: Oversold
Intermediate Term: Bullish
Long Term: Bullish
Moving Averages: 10-period 50-period 200-period
Close: 7,588.93 7,455.28 7,365.61
Volatility: 17 15 14
Volume: 620,768,000 672,833,600 713,705,920
Short-term traders should pay closer attention to buy/sell arrows while intermediate/long-term traders should place greater emphasis on the Bullish or Bearish trend reflected in the lower ribbon.
FTSE 100 INDEX is currently 0.6% above its 200-period moving average and is in an upward trend. Volatility is extremely high when compared to the average volatility over the last 10 periods. There is a good possibility that volatility will decrease and prices will stabilize in the near term. Our volume indicators reflect volume flowing into and out of .FTSE at a relatively equal pace (neutral). Our trend forecasting oscillators are currently bullish on .FTSE and have had this outlook for the last 26 periods.