Index Update: The FTSE 100 index, a key benchmark index for the London stock exchange, was trading declined around 0.05% on 16 January 2026. 

Macro Update: The UK economy demonstrated resilience in November with GDP growth of 0.3%, exceeding expectations. While the Bank of England has cut rates to 3.75%, inflation persists at 3.2% and the labor market is softening, with unemployment at 5.1%. Analysts foresee additional rate reductions as inflationary pressures slowly abate. 

Top Market Movers: Among top gainers on FTSE 100 index, Hikma Pharmaceuticals PLC (LSE: HIK) witnessed a rise of 2.50% followed by Intercontinental Hotels Group PLC (LSE: IHG) which gained around 2.01%. 

Commodity Update: The U.S. dollar was set for a third straight weekly gain on Friday, supported by firm U.S. economic data that reduced expectations of near-term Federal Reserve rate cuts. Gold declined 0.59% to USD 4,596.70, silver fell 2.74% to USD 89.81, and copper slipped 1.25% to USD 12,974.00. Brent crude edged down 0.05% to USD 63.73, with both Brent and WTI largely steady as geopolitical risk premiums eased. 

Our Stance: The UK economy contends with persistent structural challenges, evidenced by subdued growth and a softening labour market even as inflation eases. The recent Bank of England rate cut highlights these vulnerabilities, necessitating a cautious investment stance. Attention should focus on policy shifts and the dual risks of increasing public debt and a potential sharper economic contraction.  

FTSE 100: The FTSE 100 slipped 22.52 points to 10,216.42, yet continues to trade comfortably above the key support zone near 9,800, preserving a stable broader structure. The 21-day and 50-day SMAs remain positioned below current levels, providing underlying support and allowing room for near-term consolidation. Momentum remains steady, as reflected by an improving RSI. Immediate support is placed around 8,950, while upside resistance is seen near 10,250 and 10,400.  

Source: Charts by REFENITIVD

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