Where we are: The FTSE 100 is trading at 10508, down 0.21% on the day, struggling to hold ground as global tech weakness permeates European markets. Overnight, futures pointed lower, and the London close yesterday saw a similar sentiment, with the index ending down 0.17%. We’re currently trading just above the 10500 psychological level, a key area to watch for any sustained break lower.
What’s driving it: Domestically, the UK landscape remains relatively stable, with inflation figures for May holding steady at 2.8% YoY for CPI and 3% for CPIH. The Bank of England’s Retail Payments Infrastructure Board consultation on next-gen payments is a long-term structural development, offering little immediate price action. However, the broader market sentiment is clearly being dictated by external factors. A significant tech sell-off, particularly impacting AI-related stocks and major US tech names like Apple, is weighing heavily on global risk appetite, dragging down sectors like banks and energy here in London.
- UK CPI holding at 2.8% YoY provides a stable domestic inflation backdrop, but offers no immediate catalyst.
- A sharp sell-off in global tech stocks, amplified by reports of an OpenAI IPO delay, is the primary driver of risk aversion.
- The VIX is ticking higher to 18.86, signaling increased choppiness and a potential headwind for equity markets.
NY session focus: The New York session opens with a clear risk-off bias, driven by the ongoing tech rout and concerns over the global economic outlook. US 08:30 ET data will be crucial for sentiment, particularly any signs of inflation persistence or weakness in employment. Watch the S&P 500 futures closely; a sustained break below 7400 would confirm the negative sentiment and likely pressure the FTSE 100 further. The pain trade here is a sustained break below 10500, which could open up a move towards the 10400 level as global risk sentiment continues to sour.