Regency View:

Morning Report – Monday 26th July

FTSE to open at 6,997 (-30 pts)

Chinese stocks have been hit hard overnight as a regulatory clampdown in Beijing spooked investors…

Hong Kong’s Hang Seng index, home to many of China’s largest stocks, tumbled to new lows for the year – it’s biggest daily decline in over eighteen months.

The sell-off was triggered after Beijing barred for-profit tutoring in core school subjects – sending Hong Kong-listed Scholar Education Group shares crashing more than 40% and sparking a strong sell-off across the education and property sectors.

The Asian sell-off overnight has taken the shine off Friday’s strong performance on Wall Street and we’re set for a cautious start to European trading.

?Risk Barometer Explained

We mentioned in Friday’s Morning Report that should the FTSE close above 6,960 the weekly candle chart would form a bullish ‘pin-bar’ or ‘hammer’ candle and that’s exactly what we’ve seen…

Viewing higher timeframes in this way can be a very useful tool for gaining perspective, and with the FTSE’s daily candle chart currently sitting mid-way between key support and key resistance, there’s plenty of value to be had by looking at the bigger picture on the weekly candle chart.

FTSE 100 Daily Rolling Futures – Key Levels (Daily Candle Chart)

Weekly Candle Chart