FTSE 100 index retreats from 3-week high; Fed, BoE minutes eyed

Britains blue-chip index fell on Wednesday after settling at a three-week high on Tuesday as investors awaited cues from central banks. Receding, but persisting geopolitical tensions in several hot regions kept equity gains in check.

The FTSE 100 index was down 0.31%, or 21.01 points, at 6 758.30 points at 8:16 GMT, having shifted in a daily range between 6 773.80 and 6 757.80 points. The index rose for a fifth straight session on Tuesday, having gained 0.56% to settle at 6 779.31 points, the highest close in three weeks.

Investors awaited the release of Bank of Englands August policy meeting minutes at 8:30 GMT, while Feds July meeting minutes are due at 18:00 GMT. Both central banks are considering when to start hiking interest rates in their respective countries.

On the geopolitical scene, Iraqi forces and Kurdish fighters managed to retake the Mosul dam with the help of US air support and are seeking to reverse Islamic State militants’ advance through norther Iraq.

Faleh al-Issawi, the deputy head of Anbar provincial council in the west, said, cited by Bloomberg, that around 100 rebels were killed and 50 vehicles destroyed in the three days of air strikes conducted by US air forces.

President Barack Obama said on Monday that the US will continue limited air strikes against the rebels.

However, despite the current success of the military campaign in Iraq, continuing unrest in OPEC’s second-largest oil producer, as well as persisting tensions in Ukraine and the Gaza Strip will keep the market supported to some extent. Islamic State insurgents released a video on Tuesday showing the beheading of US journalist James Foley and threatening to kill another US journalist, saying his life depends on how the US acts in Iraq.

In the Gaza Strip, an extended truce was broken on Tuesday as Israel responded to rocket fire. Israel said that around 50 rockets were fired from Gaza yesterday and 20 more were launched on Wednesday but no injuries have been reported. A Hamas official in Cairo said Israel in turn had been targeting Mohammed Deif, the head of its armed wing.

Local medics said that eight people, allegedly from the same family, were killed by an Israeli strike in central Gaza on Wednesday morning and, according to officials, around 100 Palestinians have been wounded since the truce ended. In all, more than 2 000 Palestinians and almost 70 Israelis have been killed since Israel began its attacks on Gaza on July 8th.

In Ukraine, Heavy fighting and street-to-street battles were reported from Luhansk, one of two remaining pro-Russian separatist bastions. The Ukrainian military said advances have been made in Luhansk, and Kiev now controls one of the districts. Several smaller towns were also captured.

Civilians are reported fleeing by the thousands daily, with several hundred thousand already displaced by the conflict, while the death toll has climbed to over 2 000, the United Nations said.

Top movers

The FTSE 100s top three gainers for the day were Kingfisher Plc, Wolseley Plc and Centrica Plc.

Wolseley added 1.13%, or 36.00 pence, to trade at 3 217.00 pence at 7:59 GMT, while Kingfisher rose by 1.01%, or 3.15 pence, to 313.75 pence. Centrica gained 0.81%, or 2.55 pence, to trade at 317.45 pence.

Standard Chartered added 0.60%, or 7.25 pence, by 8:00 GMT to stand at 1 224.75 pence. The British lender will pay a $300 million fine and suspend or exit important businesses after failing to eliminate transactions possibly linked to money laundering.

Glencore Plc rose by 0.58%, or 2.08 pence, to 361.03 pence. The global commodity trader and metals producer said it will hold a share buyback program of up to $1 billion after posting better-than-expected first-half profit.

The FTSE 100s top three losers for the day were Mondi Plc, British American Tobacco Plc and Barratt Developments Plc. Mondi lost 2.10%, or 21.50 pence, to trade at 1 001.50 pence at 8:06 GMT, while British American Tobacco was down 1.86% at 3 515.00 pence. Barratt lost 1.95%, or 7.20 pence, to stand at 361.40 pence.

Technical support and resistance

According to Binary Tribunes daily pivot point analysis, the FTSE 100 indexs central pivot point stands at 6 773.14 points. In case the index breaks the first resistance level at 6 789.47 points, it will encounter next resistance at 6 799.64. If the second key resistance is breached, upside movement may extend to 6 815.97.

If Britains headline index declines past the first support level at 6 762.97, it will see next support at 6 746.64 points. If the second support gives way, downward movement may extend to 6 736.47.