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Morning Markets Report – Friday 22nd October 2021

Major UK stocks were pulled lower by weakness in the mining and energy sectors.

Risk appetite was slightly less confident on Thursday due to underlying inflation concerns. US bond yields strengthened to near 5-month highs.

Overall Wall Street sentiment held firm with the S&P 500 index at a record high.

There was some relief that China’s Evergrande made a debt repayment before the grace period ended. Global equities managed to eke out small gains, but caution prevailed.

Sterling retreated from intraday highs as weaker than expected data offset further speculation over a BoE rate hike.

Commodity currencies were subjected to a significant correction after a strong run. Oil prices continued to find underlying support, but the tone was more defensive and WTI traded below 7-year highs. Precious metals were held in tight ranges with solid support on dips. Bitcoin corrected lower from record highs.

Euro-zone equities drifted lower on Thursday with overall risk conditions slightly less buoyant. There were also reservations over the Chinese outlook, although expectations of sustained monetary support curbed selling pressure.

Major UK stocks were pulled lower by weakness in the mining and energy sectors. There were also reservations over coronavirus developments and the threat of higher interest rates with the FTSE 100 index declining 0.45%.

Wall Street equities were held in tight ranges amid contradictory influences. The labour-market data provided support, but there was still unease over inflation risks while bond yields moved higher. The S&P 500 index posted a 0.25% gain to a fresh record high.

US futures edged lower on Friday while Asian markets were mixed with some relief over the Evergrande situation offset by underlying reservations.

Japan’s Nikkei 225 index gained 0.25% while the Australian ASX index was unchanged on the day.

China’s Shanghai index traded 0.25% lower in late trading with Hong Kong’s Hang Seng index marginally higher.

 

 

Stock to watch today

 

Admiral Group has corrected lower in recent weeks towards an important 61.8% Fibonacci retracement level. These types of corrections have been few and far between in recent years for Admiral. A number of indecision candles have formed in recent sessions, which suggests the bearish momentum is beginning to stall. The strong move to the upside suggests that the buyers are ready to make a return. Higher prices are expected from here.

 

CCM Opinion: BUY

Buy between 3020 – 3060p

Stop: 2945p

Target: 3375p

 

 

The value of shares can fall as well as rise; you may not get back the amount you invested. Past performance is no guarantee of future performance. Capital is invested at risk This document is published by Clear Capital Markets and does not constitute a solicitation or personal recommendation for the purchase or sale of investment. The investments referred to may not be suitable for all investors. Any data or views given should not be construed as investment advice. Every effort is made to ensure the accuracy of the information, but no assurance or warranties are given. Clear Capital Markets Limited is authorised and regulated by the Financial Conduct Authority FRN 706689.

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