- FTSE 100 trades in red taking cues from fall in the Asian market, which witnessed sell-off after the China’s crackdown on the tech companies.
- UK domestic businesses will face a temporary rise in water bills as water suppliers can increase prices to offset the higher bad debt.
FTSE 100 trades in the negative zone, down by 0.82% at 6,968, tracking the Asian markets which witnessed sell-off for the second day in a row after the Chinese government’s policy change and the crackdown on the education technology sector, which convert the companies as not for profit entities and forbid them from raising capital or bringing new IPO. The latest policy change in china has increased fear amongst investors as they anticipate the same regulations might be implemented by other countries as well.
Meanwhile, the Mid-cap focused FTSE250 was down by 0.24% at 22,878 level, and FTSE All-Share was down by 0.23% at 4,016.67.
UK domestic businesses are going to face a temporary rise in water bills as the regulator, Water Services Regulation Authority (Ofwat), gave the go-ahead to water suppliers to increase prices for businesses entities in England and Wales. The water utility companies are facing higher bad debt because many companies across Britain failed to pay their bills as the pandemic took a toll on business operations.
Major European markets also trade in negative territory. German blue-chip DAX index was down by 0.62% at 15520, while the CAC40, benchmark index of France was at 6551, down by 0.41%. European investors will be closely following the outcome of the two-day US Federal Reserve meeting, which will be concluded on Wednesday, that could provide clues of future policy actions and decide the direction of the markets.
The pound declined by 0.25% at 1.3782 against the US dollar, while the EUR/ GBP currency pair traded at 0.8548, up by 0.12%. The currency market is expected to remain range bound ahead of the US Federal Reserve meeting.
Brent crude oil contract trades at USD 73.82, up by 0.16%. Meanwhile, WTI crude oil in the August future traded at USD 71.92, marginally down by 0.03%. The crude oil prices moved higher despite United States issuing travel warnings to Spain and Portugal due to rising COVID-19 cases. Investors are anticipating the global oil market to remain in deficit despite last week’s decision of OPEC+ to raise production through the rest of the year.
Gold August futures contract continues to trade downward and remain below the USD 1800 mark, down by 0.13% at USD 1796 per ounce.
Most of the Asia Pacific indexes finished the day in red, with Hong Kong’s Hang Seng index slumping 4.42% at 25,060. Shanghai Composite of China was down by 2.49% at 3,381, while India’s Nifty 50 closed at 15,746, down by 0.49%. On the other hand, Nikkei 225 of Japan closed in green, up by 0.49% at 27970, while Australia’s ASX200 closed at 7431, up by 0.50%.