FTSE 100 watch: Footsie extends fall as global economy worries persist

FTSE 100 watch: Footsie extends fall as global economy worries persist
Written by:
Alice Young
23rd January 2019

The UK benchmark index has fallen into the red this Wednesday, with worries over the global economy continuing to weigh on investor sentiment. In individual FTSE 100 movers, Burberry (LON:BRBY) has jumped in early afternoon trade after a downbeat morning, with investors digesting the retailer’s quarterly update.

FTSE 100 drifts lower

As of 12:11 GMT, the Footsie had lost 14.11 points to stand 0.20 percent lower at 6,887.28. Sentiment remains subdued today amid worries over the US-China trade relations following a report in the Financial Times which suggested that Washington had rejected an offer for talks from Beijing. While White House adviser Larry Ludlow subsequently denied the report, the move did little to cheer up investors which have been concerned over the global economy after the International Monetary Fund trimmed its growth forecasts earlier in the week. At home, uncertainty around Brexit is further weighing on sentiment.

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“The FTSE 100 suffered a sharp reverse, dropping back towards the 6,840 support area,” Chris Beauchamp, market analyst at IG, commented in a note, adding that the index’s repeated failure to break the 7,000-point level suggested that a deeper pullback was at hand, with 6,800 points the first target before 6,640.

“Alternatively, if the index holds 6,800 then it is in a range between 6,800 and 7,000,” the analyst pointed out.

Burberry shares volatile

Burberry has been one of today’s most notable FTSE 100 movers, starting the session on the back foot after reporting a drop in third-quarter revenue. The retailer’s shares, however, are now up 1.49 percent at 1,802.50 points.

“The rejuvenation of the iconic Burberry brand is still in its early stages, but there are clear signs that the new management team is taking the bull by the horns,” said Richard Hunter, head of markets at Interactive Investor, as quoted by Reuters.

The FTSE 100 was 0.22 percent down at 6,886.21 points as of 12:22 GMT on Wednesday, 23 January 2019.

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