Markets volatile amid U.S. selloff, European tariff jitters, and selective Asian gains:

Image Source : Krish Capital Pty Ltd

Index Update: The FTSE 100 index, a key benchmark index for the London stock exchange, went up around 0.10% on 21 February 2025.  

Macro Update:  Standard Chartered announced a $1.5 billion share buyback after reporting an 18% rise in annual profit, driven by record growth in its wealth business and strong performance in its markets division, pushing its shares to a near-decade high. The bank's solid earnings reflect robust client activity and effective cost management. Meanwhile, UK retail sales rose 1.7% in January, exceeding all forecasts and marking the first increase since August, suggesting resilient consumer spending despite a weak economic outlook and persistent inflationary pressures. Anglo American posted a $3.1 billion loss following a write down of its De Beers diamond business, as it shifts focus to copper and iron ore assets. UK stock indexes fell for a third consecutive session, with the FTSE 100 dropping 0.6%, pressured by declines in BP, AstraZeneca, EasyJet, Imperial Brands, and GSK, which traded ex-dividend. Investor sentiment remained weak as domestic wage growth and rising inflation tempered expectations of multiple interest rate cuts by the Bank of England, despite sluggish economic growth indicators. 

Top Market Movers: Among top gainers on FTSE 100 index, NatWest Group PLC (LSE: NWG) witnessed a rise of 3.76% followed by Airtel Africa PLC (LSE: AAF) which gained around 2.66%. 

Commodity Update: The U.S. dollar dropped on Friday after a report showed a decline in monthly retail sales and a surprise drop in consumer sentiment for February. These figures, coupled with a higher-than-expected inflation rate for January, signalled that consumers might be cautious about U.S. President Donald Trump's policies, especially his proposed tariffs, affecting their purchasing power. In the commodities market, gold remained steady at $2,956.10, while silver fell 0.11% to $33.43. Copper rose 0.15% to $9,565.20. Brent oil gained 0.20% to $76.64, driven by lower U.S. gasoline inventories and concerns over Russian supply disruptions. 

Our Stance: Global stock markets are currently navigating a complex landscape marked by mixed performances and investor sentiment influenced by corporate earnings, geopolitical tensions, and economic indicators. U.S. markets declined on February 20, 2025, with the S&P 500 down 0.4%, the Dow Jones falling 1%, and the Nasdaq dropping 0.5%, driven by Walmart’s 6.5% decline on weak forecasts and Palantir’s 5.2% loss amid Pentagon budget concerns. European markets showed resilience, with the STOXX 600 rising 0.2% on February 21, though set to break an eight-week winning streak due to high bond yields and tariff threats. Standard Chartered gained 4.7% on a $1.5 billion buyback and strong profits. In Asia, the Hang Seng surged 4% on Alibaba’s AI and cloud expansion, while Japan’s Nikkei rose 0.3%, though trade conflict fears persist. Investors remain cautious, balancing strong earnings with economic uncertainties. 

FTSE 100 

The FTSE 100 finished at 8,662.97 on Thursday, a loss of 0.57%, despite a bearish candlestick pattern, the index remains in positive market sentiment. The index remains below its 21-period Simple Moving Average (SMA). Furthermore, the 50-period SMA provides solid support, reinforcing the potential for continued upward momentum. With the Relative Strength Index (RSI) at 54.55, the index shows healthy bullish strength without reaching overbought levels, indicating there is still room for further gains. These technical indicators indicate a positive trend, suggesting that the FTSE 100 is poised for further growth. As such, the index remains an appealing option for short-term investors seeking potential opportunities. On the weekly chart, the FTSE 100 gained 0.37%, closing at 8,732.46. The index remains well above the 50-period SMA at 8,227.28, with support at 8,206.78. Resistance is at 8,850, and a breakout above this level could push the index toward 8,900. However, a drop below 8,020 could signal downside risk. Investors should monitor these levels for insight into future price movements. 

Data Source - Refinitiv