FTSE 100 futures marginally lower amid Covid-19 second wave fears
FTSE 100 futures are trading slightly lower, suggesting that UK stocks recent recovery is running out of steam amid a myriad of macroeconomic headwinds.
FTSE 100 futures are trading marginally lower on Wednesday, with UK stocks recent recovery showing signs of losing momentum.
The blue-chip index closed 0.17% higher on Wednesday at 6253, with its rally slowing amid fears of a second wave of Covid-19 cases that could see the UK forced to reintroduce strict lockdown measures.
Earlier this week, the FTSE 100 fell below the 6000 points benchmark, with investors pulling out of riskier assets after news emerged that China shutdown a food market in Beijing after a spike of Covid-19 cases.
The news gave exacerbated fears of a second wave of coronavirus cases emerging globally, which would force governments to reintroduce stricter lockdown measures, plunging the global economy into an even deeper recession.
IG offers extended hours trading options for the FTSE 100 index and other major indices. Buy long or sell short on the FTSE 100 via CFDs and other instruments provided by IG's market-leading trading solution. Start today by opening an IG account.
FTSE 100 moves upwards after pause
Having rallied sharply on Monday, breaking through short-term trendline resistance, the FTSE 100 then calmed on Tuesday, consolidating around 6200 after a push to 6300 that created a new higher high, according to Chris Beauchamp, chief market analyst at IG.
‘Further gains may see this level broken, which would bring 6400 and then 6500 into view,’ he added. ‘The rebound from Monday’s low reasserted the bullish view here, which remains in place unless we see a drop below 6100 that might suggest a move back to 5950.’
Investors believe stock market is ‘overvalued’
According to a recent survey carried out by Bank of America (BofA), 98% investors said that they think the financial markets are ‘overvalued’ after rebounding from March lows due to global governments stimulus packages to offset the economic impact of the Covid-19 pandemic.
Cash levels at fund managers fell in June to 4.7%, down from 5.7% the month prior, with 93% of investors surveyed admitting they were growing increasingly concerned about the prospect of a prolonged recession.
BofA said in the report that the recent rise in investor optimism remains ‘fragile’ and unlikely to be maintained amid the myriad of macroeconomic headwinds.
How to trade the FTSE 100 this weekend
Did you know? You can trade forex and indices like the FTSE 100 during Saturday and Sunday with IG. Our world-leading trading platform is the only solution to offer weekend trading on indices.
Whether you want to go long (buy) or short (sell) the FTSE 100 based on the above outlook, you don’t have to wait until the markets reopen on Monday to trade.
The weekend prices for indices and forex are quoted separately to their weekday counterparts, based on our view of the prospects for that market given client business and news flow. As a result, you can use these markets to hedge against risk on your weekday positions.
Ready to start trading indices? Open a live account or practise using a demo version today.
This information has been prepared by IG, a trading name of IG Markets Ltd and IG Markets South Africa Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.
Take a position on indices
Deal on the world’s major stock indices today.
- 1-point spread on the FTSE 100 and Germany 40
- The only provider to offer 24-hour pricing
Live prices on most popular markets
- Forex
- Shares
- Indices
Prices above are subject to our website terms and agreements. Prices are indicative only
