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Rising covid cases unnerve investors


 Rising covis cases and tighter measures to stem the spread of the virus are raising fears that the delicate economic recovery will quickly be derailed.

European bourses start the trading steeply lower because the new week kicks off. Rising covis cases and tighter measures to stem the spread of the virus are raising fears that the delicate economic recovery will quickly be derailed. Fears of a double dip recession are overshadowing upbeat vaccine. Although reports that the united kingdom government is considering reducing quarantine period for covid contacts helps the FTSE, which hasn’t fallen as steeply as its European peers on the open.


The US and France recorded a record number of coronavirus cases, Spain announced a national curfew and Italy a partial lockdown. Meanwhile within the UK covid cases topped 23,000 with the North East and West seeing the most important increase in cases. 


Still, risk off is dominating as investors fret over the impact that tighter restrictive measures will wear economic process . Riskier assets like stocks are out of favour, whilst flows into safer havens like the US Dollar are on the increase . 


Not all bad news

News that British government is considering a shorter isolation period, reduced from 14 days to 7 days for those that are in touch with someone who tested positive is offering some support to the united kingdom index, which hasn’t sold off as deeply on the open as its European counterparts

News that the Oxford University / AstraZeneca vaccine produces a strong immune reaction in elderly people, the group at highest risk is broadly being shrugged off by investors. As is news that the vaccine is probably going to be distributed to NHS frontline workers and therefore the most vulnerable in December.


A slow start to a busy week

Whilst covid is about to stay a key driver within the market in the week , additionally to US elections and US stimulus negotiations, in the week is additionally a key week for corporate releases with UK banks and 4 of the FAANGs reporting, additionally to other big names like BP, Next, GSK just to say a couple of .

Looking ahead it's a comparatively slow start to the week with just IFO Business sentiment focused . 

FTSE Charts

The FTSE trades -0.6%. It trades below its 50, 100 & 200 SMA on the 4 hour chart and below a descending trendline which has been in situ since early June – a bearish chart.

Immediate support are often seen at 5760, today’s low before 5715, last week’s low. 

Immediate resistance is at 5855 50 SMA before 5910/20 region where the 100 & 200 SMA sit. A move above 5970 is required to negate the present bearish trend.


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