The FTSE 100 received a boost from a lower British pound amid Brexit concerns
As solid initial results of the third-quarter earnings season failed to impress investors, US stocks slipped on Tuesday, snapping a four-day winning streak. JPMorgan Chase and Citigroup reported better-than-expected results for the third quarter. Johnson & Johnson posted earnings that beat analyst expectations and raised its full-year profit guidance. On the negative side, a further stalemate in fiscal stimulus negotiations pushed stocks lower along with the ongoing pandemic. As a result, the Dow Jones Industrial Average dropped 0.6%, the S&P 500 slid 0.6%, and the Nasdaq Composite dipped 0.1%.
Asian stock markets slipped on Wednesday as halted vaccine trials and an impasse on US stimulus negotiations dented investor sentiment. Citing a safety concern, Eli Lilly and Co joined Johnson & Johnson in pausing the clinical trial of its Covid-19 antibody treatment. The Shanghai Composite was up down 0.56%, Japan’s Nikkei 225 inched up 0.11%, South Korea’s Kospi fell 0.94% after the Bank of Korea kept its key interest rate steady at 0.50%.
In Europe, equities opened mostly lower, while U.S. stock futures stabilized. The Stoxx Europe 600 index fell 0.2%. The FTSE 100 rose 0.58%, getting a boost from a lower British pound amid Brexit worries ahead of tomorrow’s deadline set by the EU and the U.K. for Brexit negotiations.
GBPUSD slipped to one-week lows around 1.2860 earlier in the day but managed to trim losses in recent trading. As of writing, the pair was changing hands around 1.29, struggling to regain this level as dollar demand persists amid the prevailing risk-off tone. However, if the pound manages to turn 1.29 into support, the pair could reenter positive territory. In a wider picture, downside risks are limited as long as the cable holds above the 100-DMA.
Elsewhere, gold prices are marginally higher on the day but remain below the $1,900 handle after an aggressive local sell-off seen on Tuesday as dollar demand reemerged. In the short term, the precious metal needs to regain the 20-DMA in order to extend the recovery. On the downside, the 100-DMA continues to act as the key support since late-March.