FTSE – Slide continues as China threat spooks investors

The FTSE index has plunged in the Wednesday session. Currently, the FTSE index is trading at 7,185, down 1.15% on the day. There are no British events on the calendar. On Wednesday, the U.S. releases second estimate GDP for the first quarter.

Reports that China has raised the ante in a bitter trade dispute have rocked global equity markets on Wednesday. Chinese media has reported that China is threatening to curb the supply of rate metals to the U.S. These products are used in the production of items such as cell phones and electric cars, so any interruption in supply could hurt U.S. technology companies. Technology company listings on the FTSE are down sharply – Micro Focus has declined 4.25% and Vodafone has fallen 1.82%. Investors remain jittery over escalating tensions between the U.S. and China, and this latest salvo from China has exacerbated risk apprehension.

The U.S. economy continues to perform well, and first-quarter economic growth is expected to remain above the 3% level. Preliminary GDP will be released on Thursday and is expected to post a healthy gain of 3.1%. In April, the initial release came in at 3.2%, easily beating the estimate of 2.2%. If the revised reading also beats expectations, risk appetite could improve and boost the FTSE.

China’s elements of surprise

Stocks Drop as Recessionary Pressures Build

Economic Calendar

Wednesday (May 29)

  • There are no British events

*All release times are DST

*Key events are in bold

FTSE, Wednesday, May 29 at 11:35 DST

Previous Close: 7,268 Open: 7,219 High: 7,149 Low: 7,226 Close: 7,185

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Kenny Fisher

Kenny Fisher

Market Analyst at OANDA
A highly experienced financial market analyst with a focus on fundamental analysis, Kenneth Fisher’s daily commentary covers a broad range of markets including forex, equities and commodities. His work has been published in several major online financial publications including Investing.com, Seeking Alpha and FXStreet. Based in Israel, Kenny has been a MarketPulse contributor since 2012.