Global Selloff Deepens Amid Trade War Fears and Economic Uncertainty:

Image Source : Krish Capital Pty Ltd

Index Update: The FTSE 100 index, a key benchmark index for the London stock exchange, went down around 1.22% on 31 March 2025.

Macro Update:  British business confidence remained steady at 49% in March, matching February’s six-month high, as per the Lloyds Bank Business Barometer. Optimism among retailers stood out, supported by an unexpected surge in retail sales. Businesses' outlook on their own trading prospects reached the highest level since 2017, with positive momentum echoed by strong S&P Global PMI data, suggesting early signs of economic improvement in 2025. In corporate news, Aston Martin plans to raise over £125 million through funding from Chairman Lawrence Stroll and the sale of its Formula One stake, as it faces persistent losses from supply chain issues and weak China demand. Shares rose 5.7% on the announcement. Meanwhile, Primark CEO Paul Marchant resigned immediately after admitting to an “error of judgment” in a social setting, drawing criticism from parent company AB Foods.

Top Market Movers: Among top gainers on FTSE 100 index, Severn Trent PLC (LSE: SVT) witnessed a rise of 1.12% followed by British American Tobacco PLC (LSE: BATS) which gained around 0.96%.

Commodity Update: The dollar fell, while gold surged above $3,100 per ounce for the first time, driven by concerns over U.S. President Donald Trump’s tariffs and geopolitical tensions, prompting a flight to safe-haven assets. Gold rose 0.83% to $3,140.80, silver gained 0.58% to $35.08, and copper dipped 0.38% to $9,766.55. Brent oil dropped 0.20% to $73.52 per barrel after Chinese media reported major reserves in the South China Sea, easing supply fears. Crude prices fell after three weeks of gains, impacted by worries over potential U.S. sanctions on Russia amid slowing global growth.

Our Stance: Global financial markets are grappling with heightened volatility and investor anxiety amid escalating trade tensions and signs of economic slowdown. The U.S. stock market, already in correction territory with the S&P 500 down over 9% from its February peak, faces further pressure ahead of a critical employment report and President Trump’s looming tariff deadline. His indication that tariffs may target all trading partners has rattled investors, sparking fears of a global trade war and potential recession. This uncertainty triggered sharp sell-offs in Asian and global equity markets. Japan’s Nikkei plunged 4.05% to an eight-month low, while broader Asian indices also suffered steep declines. Safe-haven assets like gold and German bonds surged, and the yen strengthened, reflecting a shift away from risk. Overall, markets are bracing for a pivotal week that could reshape global trade dynamics and test the resilience of an already fragile economic outlook.

FTSE 100

The FTSE 100 is trading at 8,577.84, marking a modest 0.94% decline on Monday and forming a bearish candlestick pattern. The index remains below its 21-period and 50-period Simple Moving Averages (SMAs), which act as strong resistance levels amid ongoing market uncertainty. This technical setup suggests cautious optimism, though more price action is needed to determine the next direction. Holding above a key horizontal support zone hints at a potential sentiment shift after recent lows. The RSI stands at 42.13, indicating moderate bearish momentum with room for further downside. Short-term traders should monitor key support levels closely, as upcoming sessions will be crucial in confirming the market’s next move.

Data Source - Refinitiv