FTSE 100 Eyes Decent Monthly Gains:

Image Souce: Krish Capital Pty Ltd

Index Update: The FTSE 100 index, a key benchmark index for the London stock exchange, went up around 0.02% on 29 November 2024. Industrials, Utilities & Consumer Non-Cyclicals sector demonstrated a substantial decline. Moreover, sectors such as Consumer Cyclicals, Real Estate & Basic Materials faced a significant growth. 

Macro Update:  Britain's Transport Minister Louise Haigh resigned after admitting to misleading police about a stolen phone in 2013, adding pressure on Prime Minister Keir Starmer's administration. Haigh had claimed the phone was stolen during a mugging but later found it at home. Finance Minister Rachel Reeves postponed the government’s multi-year spending review to June 2025, reflecting challenges in balancing healthcare investment with fiscal constraints. In response to record net migration of over 900,000 by June 2023, Starmer pledged reforms to reduce reliance on foreign labor and require businesses to train British workers. The FTSE 250 rose 0.8%, boosted by Direct Line's rejection of Aviva’s £4.16 billion takeover bid, while the FTSE 100 remained steady amid lighter trading due to the U.S. Thanksgiving holiday. 

Top Market Movers: Among top gainers on FTSE 100 index, Anglo American PLC (LSE: AAL) witnessed a rise of 3.05% followed by IMI PLC (LSE: IMI) which gained around 2.89%. 

Commodity Update: The U.S. dollar weakened against most major currencies on Friday, with trading volumes light due to the Thanksgiving holiday. The British pound reached its highest level since November 20. In the commodities market, gold rose 0.74% to $2,681 per ounce, silver surged 1.30% to $31.08, and copper climbed 0.54% to $9,046.50 per ton. Brent crude saw a slight dip of 0.10%, settling at $73.21 per barrel, amid renewed concerns over supply risks as tensions between Israel and Hezbollah escalated. Investors also awaited an OPEC+ meeting for updates on production policies. 

Our Stance: The yen surged to a six-week high, gaining as much as 1.2% against the U.S. dollar, driven by unexpectedly strong Tokyo inflation data, which fueled expectations of a Bank of Japan rate hike next month. Thin trading due to the U.S. Thanksgiving holiday amplified momentum, with the yen poised for its best week in four months. Other major currencies like the sterling, New Zealand dollar, and Chinese yuan also strengthened. Asian shares rose modestly, with MSCI’s Asia-Pacific index up 0.4% and Chinese blue-chip stocks jumping 2%, though weekly performance for Asian stocks was flat. Market sentiment was bolstered by the possibility of the Bank of Japan raising rates, with swaps indicating a 60% probability of a hike to 0.5%, the highest level since 2008. 

FTSE 100 

The FTSE 100 closed at 8,281.22 on the day, up 0.08%, forming a bullish candlestick pattern that reflects strong investor confidence and positive sentiment. The index is trading above both its 21-period and 50-period Simple Moving Averages (SMAs), which now act as key support levels. This positioning suggests the potential for further upside movement, especially if the index remains above these critical support zones. The Relative Strength Index (RSI) is at 59.36, signaling that bullish momentum is intact, though it is not yet in overbought territory, allowing room for further gains. On the weekly chart, the FTSE 100 closed at 8,262.08, up 2.62%, following a bounce from the 50-period SMA at 8,047.08. This bounce reinforces the positive outlook for the index, indicating strength in the ongoing trend. Immediate resistance is at 8,400, and a breakout above this level could signal a bullish reversal, opening the door for further gains. However, a drop below the 8,020 mark would suggest downside risks and potential market consolidation. Investors should keep a close eye on these key levels for signs of either continued strength or potential weakness. The market sentiment remains cautiously optimistic, with investors closely watching for any changes in trend direction.