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FTSE 100 Drops Below June Low

Earlier we wrote about the reasons for the weak behavior of the UK stock market.

Firstly, it is the highest inflation among the G7 countries.

Yesterday JP Morgan analysts suggested that the base rate in the UK could be raised to 7% under certain scenarios. And the likelihood of a hard landing for the British economy next year is rising due to the impact of rising borrowing costs on business confidence and rising unemployment.

Secondly, this is a decline in commodity prices, which is important for the FTSE 100 index, where the share of oil and mining companies is relatively large. Commodity prices reflect expectations of a global economic growth outlook that has been overshadowed by news from China. There, according to the latest data, activity in the services sector in June grew at the slowest pace in 5 months.

At the same time, the FTSE 100 chart gives hope to the bulls, as the price of the index is at the level of the lower line of the descending channel (shown in red), which, it is possible, will show support properties for the FTSE 100, which may lead to a slowdown in the fall or even a short-term rebound.

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