FTSE 100 watch: Footsie finds technical support after recent sell-off

on Dec 16, 2013
Updated: Oct 21, 2019

iNVEZZ.com, Monday, December 16: The Footsie has bounced back from last week’s lows, with the market finding some technical support following the recent sell-off. Aggreko (LON:AGK) lent further support to the FTSE 100 after the temporary power provider posted an upbeat trading update.

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**Footsie propped up by technicals, Aggreko**
As of 12:11 UTC, Britain’s blue-chip index had gained 45.55 points to be 0.71 percent up at 6,485.51 after having closed 0.08 percent lower on Friday, posting its sixth consecutive week of losses. The Footsie has been under pressure in recent sessions due to speculation that the US Federal Open Market Committee (FOMC) may decide to start scaling back its stock market-friendly bond purchases during its last policy meeting for 2013 which starts tomorrow.

Reuters quoted Brewin Dolphin technical analyst Julian McCormack as explaining that since November, the Footsie has retreated five percent and the price is now back down to its trend line support with the event coinciding with the relative strength index (RSI) moving out of oversold territory.
“The combination of these events suggests that the sell-off is now overdone and we expect the FTSE 100 to rally in due course, continuing its uptrend,” McCormack added.

The FTSE 100 has also benefitted from a rally in Aggreko shares which surged 8.64 percent to 1,647.00p after the company forecast that its full-year results would be “slightly ahead of expectations”. (Aggreko share price powers ahead on upbeat full year outlook)

Lending further support to the Footsie was Markit Economics’ flash Eurozone PMI composite output index which came in at 52.1 in December, up from 51.7 last month.
“The euro zone PMI is relevant for the FTSE, given that the index is an international index with about 70 percent of sales sourced overseas,” HSBC strategist Robert Parkes told Reuters. “The key event this week, however, remains the FOMC decision on tapering and this is likely to set the tone for last few trading days of the year.”

**RSA share price stays in the red**
Among the top blue-chip fallers today has been RSA Insurance (LON:RSA) with investors fearing the consequences of a potential credit rating downgrade after the insurer issued another profit warning at the end of last week. As of 13:16 UTC, RSA’s share price had given up 2.70 percent to 90.00p.
Aberdeen Asset Management (LON:ADN) has been another standout FTSE 100 faller dragged down by concerns related to the purchase of Scottish Widows last month. (Aberdeen share price: Doubts creeping in about Scottish Widows deal) The Aberdeen share price is currently 0.98 percent down at 451.62p.
**The FTSE 100 was 0.89 percent up at 6,497.54 points as of 13:12 UTC on 16 December 2013.**

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