Britain Seeks Economic Stability Amid Global Uncertainty:

Image Source : Krish Capital Pty Ltd

Index Update: The FTSE 100 index, a key benchmark index for the London stock exchange, went up around 0.35% on 28 February 2025.  

Macro Update:  British Energy Secretary Ed Miliband will visit China in March to revive energy cooperation talks and engage Chinese investors, signaling the Labour government’s intent to strengthen ties despite strained U.S. and EU-China relations. Meanwhile, Bank of England Deputy Governor Dave Ramsden highlighted a balanced inflation outlook, suggesting future rate cuts may not be as slow as previously expected. In corporate news, British Airways owner IAG announced a €1 billion share buyback after posting a 27% rise in annual operating profit, exceeding market expectations. The UK housing market showed resilience, with house prices rising 0.4% in February, outpacing forecasts amid buyers rushing to capitalize on an expiring tax break. Additionally, business optimism improved for the first time in seven months, as the Lloyds Bank Business Barometer surged to 49%, reflecting renewed confidence and increased hiring plans. 

Top Market Movers: Among top gainers on FTSE 100 index, Weir Group PLC (LSE: WEIR) witnessed a rise of 5.61% followed by Haleon PLC (LSE: HLN) which gained around 4.73%. 

Commodity Update: The U.S. dollar gained safe-haven support on Friday amid looming tariffs from President Donald Trump. However, it was still on track for a monthly loss as investors balanced these threats with concerns over a weakening U.S. economy. In commodity markets, gold slipped 0.38% to $2,884.80, silver fell 2.18% to $31.56, and copper dropped 0.27% to $9,389.50. Brent crude oil also declined 0.40% to $73.26, heading for its first monthly loss since November. The drop in oil prices reflected concerns about global economic growth and fuel demand amid U.S. tariff threats and signs of a slowing economy.. 

Our Stance: The recent downturn in the S&P 500 and Nasdaq indices can be attributed to a significant decline in Nvidia's stock, which fell 8.5% after its quarterly report revealed concerns over gross margins and potential impacts from U.S. tariffs on semiconductor exports to China. This decline in Nvidia's stock, a major player in the AI sector, has dampened the broader AI-driven rally in the market. Additionally, investors are reacting to data indicating a cooling U.S. economy, further influencing market sentiment. In parallel, the Bank of Japan has announced its intention to continue tapering government bond purchases despite recent yield increases, emphasizing that its substantial bond holdings still provide significant economic stimulus. Deputy Governor Shinichi Uchida also indicated the central bank's readiness to raise short-term interest rates if economic conditions align with projections. 

FTSE 100 

The FTSE 100 opened at 8,756.21 on Friday and showed a slight loss of 0.34%, dropping to 8,726.49. Despite forming a bearish candlestick pattern, the index continues to maintain a positive market sentiment. It closed near the 21-period Simple Moving Average (SMA), indicating a favourable short-term outlook. The 50-period SMA serves as a strong support level, suggesting the potential for continued upward momentum. The Relative Strength Index (RSI) stands at 58.87, reflecting healthy bullish strength without entering overbought territory, which suggests room for further gains. These technical signals indicate a positive trend, making the FTSE 100 an attractive option for short-term investors. On the weekly chart, the FTSE 100 rose 0.84%, closing at 8,659.37. The index remains well above the 50-period SMA at 8,247.27, with support at 8,206.78. Resistance is at 8,850, and a breakout above this level could drive the index towards 8,900. A drop below 8,020, however, would signal downside risk. Investors should monitor these key levels for insights into upcoming price movements. 

 Data Source - Refinitiv