The UK100 Price Plummeted After the Publication of Inflation Data

FXOpen

Yesterday, the stock market in the United Kingdom experienced a sharp decline following the release of new inflation data. The UK100 price, reflecting the leading British stock index FTSE, dropped approximately 1.5%. Moreover, the RSI indicator on the 4-hour chart fell below the value of 18 for the first time since July 2023.

Analysts attribute this decline to the published inflation data, which not only failed to meet economists' expectations but also indicated a possible strengthening of inflationary pressure in the country. CPI values: actual = 4.0%, expected = 3.8%, previous value = 3.9%.

This raised concerns among investors regarding the Bank of England's future steps in managing interest rates and the potential slowdown in the country's economic growth.

Sectors most sensitive to changes in interest rates, such as real estate and finance, showed the greatest decline. Significant decreases were also observed in the stocks of companies in the retail and consumer goods sectors, reflecting growing concerns about consumer confidence and spending.

The UK100 chart shows that:

→ the price dropped to the lower boundary of the channel, indicated in blue;

→ market weakness could be inferred from the inability of the UK100 price to stay above the September maximum in December, as well as price action around the 7665 level, which switched roles from support to resistance.

If new negative news emerges for the stock market, support from the lower boundary of the channel may be breached. In that case, it is not excluded that the UK100 stock index will decline to the level of 7300, which served as strong support throughout 2023.

Trade global index CFDs with zero commission and tight spreads. Open your FXOpen account now or learn more about trading index CFDs with FXOpen.

This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.

Latest from Indices

S&P 500 Index Hits Record After Major News FTSE 100 Index Declines After Labour Market News S&P 500 Index: Latest Analysts’ Forecasts Nasdaq Index Shows Uncertainty Ahead of PCE Release S&P 500 Analysis: Good News is Bad News

Latest articles

Cryptocurrencies

Bitcoin Price Losing Correlation with Stock Market

On May 17, Bloomberg reported that Bitcoin's price was highly correlated with tech stocks.

At that time, it was suggested that the leading cryptocurrency was perceived as a growth asset, influenced by:
→ the launch of Bitcoin ETFs;
→ expectations of Fed

Indices

S&P 500 Index Hits Record After Major News

Yesterday, significant news regarding US inflation was released. According to ForexFactory:
→ Year-on-year Consumer Price Index (CPI): actual = 3.3%, forecast = 3.4%, previous = 3.4%;
→ Month-on-month CPI: actual = 0.0%, forecast = 0.1%, previous = 0.3%;
→ Month-on-month Core CPI (excluding

What Are Upside and Downside Tasuki Gap Patterns?
Trader’s Tools

What Are Upside and Downside Tasuki Gap Patterns?

In the dynamic world of forex and CFD trading, the ability to recognise crucial chart patterns is essential for making informed decisions. Among the patterns frequently sought after by traders is the Tasuki Gap setup. This article delves into understanding

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 60% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.