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FTSE 100, DAX and S&P 500: spiralling lower as Russia invades Ukraine


ArvinIG

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The FTSE 100, DAX and S&P 500 have dropped out of bed in light of Russia mounting a full-scale invasion of Ukraine.

Indices
Source: Bloomberg
 
 

FTSE 100 falls to 200-day SMA as Russia invades Ukraine

As Russia invades Ukraine and president Putin declares war on his Russian neighbour, the FTSE 100 took a beating but less so than other European indices such as the DAX, for example.

This has to do with the fact that the FTSE 100 is commodity, and especially oil, heavy with the likes of BP and Shell outperforming. The index is thus benefitting from the rise in commodity prices on the back of the Russian invasion.

The FTSE 100 nonetheless dropped sharply to the 200-day simple moving average (SMA) at 7223 which so far offers support, just as it did in September, November and December. Were it to be slipped through, however, the late December low at 7100 would be targeted next.

Minor resistance seen at the 22 February low at 7360 is expected to cap any potential short-term bounce today, together with the breached three-month uptrend line at 7375.

FTSE 100 chart
Source: IT-Finance.com

DAX drops like a stone on full-scale Russian invasion of Ukraine

The DAX 40 fell out of bed as Russia mounts a full-scale invasion of Ukraine, earlier dropping by as much as -5% to the pre-Covid-19 pandemic February 2020 high and 50% retracement of the October 2020 to November 2021 advance at 13,831 to 13,810 which offered interim support.

Slightly further down the January 2020 high and February 2021 low can be found at 13,644 to 13,641. Minor resistance sits at the 22 February low at 14,305 and major resistance at 14,840 to 14,917. This resistance area is made up of several monthly lows going back to May 2021.

DAX 40 chart
Source: IT-Finance.com

S&P 500 spirals towards May 2021 low at 4030 on Russian invasion of Ukraine

The S&P 500 is on track to tumble to the June 2021 low at 4130 and may continue its slide to the 4030 May 2021 low as Russia declares war on Ukraine.

Around the minor psychological 4000 mark the index may stabilise, however, since the February and mid-March 2021 highs were also made in this vicinity.

A potential short-term bounce is likely to encounter resistance at the 4214 January low. Together with the July 2021 trough at 4224 it is likely to cap the upside today.

S&P 500 chart
Source: IT-Finance.com

Axel Rudolph | Market Analyst, London
25 February 2022

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