U.K. Stocks Drop 1st Time in 9 Days as RSI Exits Overbought Zoneby
The eight-day rally for British equities came to a halt, with the FTSE 100 Index dropping the most in two weeks, as data signaled consumer price pressures.
The gauge of megacaps fell 0.7 percent, retreating from its highest level in more than a year as 83 of its companies slipped. It extended its decline as the pound strengthened after a report showed that U.K. inflation accelerated in July, with the currency’s weakness in recent weeks leading to the biggest jump in import costs in more than four years.
The move sent the FTSE 100’s resistance strength index, a measure of market momentum, down and out of so-called overbought territory, a pullback that could trigger more declines. Its RSI fell to 67 after climbing to 73 yesterday, the highest level since May 22, 2013, when the equity measure hit a peak before tumbling 12 percent in about a month. The overbought zone is reached when the RSI surpasses 70.
Marks & Spencer Group Plc, EasyJet Plc and IAG SA fell more than 2 percent, posting some of the biggest slides on the FTSE 100. Miners rose: Antofagasta Plc rallied 8.7 percent after reporting an increase in earnings and in copper production. Rio Tinto Group and Glencore Plc rose 2 percent.
The FTSE 250 Index of mid-cap shares declined 0.7 percent, while the FTSE Small Capitalisation Index Ex Investment Trusts slipped 0.4 percent after closing at a record. The regional Stoxx Europe 600 Index fell 0.8 percent.