FTSE Turnaround Tuesday Turns To Whimper Wednesday

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The FTSE100 is fading into the finish after ceding Tuesday's optimism, the principle catalyst for today's decline came from UK housebuilders seeing a decline in their shares, with the housebuilders' index falling by 1.3%. Among the companies affected, Persimmon -1.8% and Taylor Wimpey -0.85% were top percentage losers behind property investment firm Segro sitting at the bottom of the index shedding 2.4% . The downturn was triggered by a report from mortgage lender Halifax, which revealed that British house prices had dropped on an annual basis in May. This marked the first year-over-year decline in 11 years and could be further exacerbated by the increased mortgage rates, placing pressure on potential buyers. The average property price experienced a 1% decrease compared to the previous year, aligning with the predictions of a Reuters poll. Additionally, prices remained unchanged on a monthly basis compared to April when they had declined by 0.4%. All constituents of the housing index faced a decline ranging from 0.8% to 1.8%. Notably, Despite these setbacks, the housebuilders' index has achieved a year-to-date gain of over 12%.

On the positive side of the ledger, shares of Vodafone Group advanced by over 2% following a report indicating that the merger between its UK mobile operations and Three is nearing finalisation. However, investors have little reason to be optimistic about the deal. The Competition & Markets Authority is unlikely to approve the merger, considering that both companies are among the four largest mobile operators in the UK. The recent history of the antitrust watchdog reinforces this scepticism. It previously blocked Microsoft's acquisition of Activision Blizzard and determined that Broadcom's attempt to acquire VMWare would harm competition. These decisions suggest that the chances of the Vodafone-Three merger gaining regulatory approval are slim. Interestingly, the jump in Vodafone's shares can be attributed to their recent plunge to a 16-year low, for Vodafone, a 2% increase represents a significant development these days, however, the standout winner on the day was BT Group sitting on the top of the index with gains of just under 4% on the session.

FTSE Bias: Intraday Bullish Above Bearish below 7550

  • Below 7467 opens 7388
  • Primary resistance is 7660
  • Primary objective 7388
  • 20 Day VWAP bearish, 5 Day VWAP bullish

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