FTSE 100: A Tepid Start To The Week, Recovering From Three Month Lows

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British equities began the week with a distinct lack of buoyancy as defence firms faced losses following an unsuccessful mutiny attempt by mercenaries in Russia. The FTSE 100, the UK's main stock index, printed a three-month low. The aerospace and defence sector experienced a decline of 2.1% due to the incident involving fighters from the Wagner group in Russia over the weekend. BAE Systems, the largest defence company in Britain, saw its stock slump 2.1%, placing it second to the bottom of the FTSE 100. The biggest loser on the session is Vodafone whose shares approached a nearly 26-year low, declining by as much as 2.7%. According to The Times, British Members of Parliament (MPs) have expressed concerns regarding the proposed merger between Vodafone and Three. The merger, which was announced by Vodafone and CK Hutchison on June 14, involves a long-awaited £15 billion consolidation of their British mobile operations. The report indicates that the merger is undergoing cross-party scrutiny in Parliament due to its connections with China. MPs from both the Conservative and Labour parties have raised questions to government departments regarding the potential impact on state contracts with Vodafone following the proposed merger with Three, which is owned by CK Hutchison. Both companies have stated that the creation of a new market leader would promote competition and encourage investment. Vodafone's shares have experienced a decline of approximately 14% year-to-date.

On the positive side home builder Taylor Whimpey sits at the top of the index with gains of over 2.3% closely followed by Sainsburys with a gain of 2.29% after announcing a £15 million investment to cut prices of its own brand items like rice, pasta and cornflakes, the retailer also committed to matching chicken breast prices to competitor Aldi for the first time.

FTSE Bias: Intraday Bullish Above Bearish below 7510

  • Below 7510 opens 7435
  • Primary resistanceis 7660
  • Primary objective 7430
  • 20 Day VWAP bearish, 5 Day VWAP bearish

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