FTSE 100 Flat Amid JD Sports Slides on Profit Warning:

Image Souce: Krish Capital Pty Ltd

Index Update: The FTSE 100 index, a key benchmark index for the London stock exchange, went up around 0.12% on 21 November 2024. Technology, Energy & HealthCare sector demonstrated a substantial growth. Moreover, sectors such as Real Estate, Consumer Cyclicals & Utility faced a significant decline. 

Macro Update:  In October, Britain’s public sector borrowing rose to £17.4 billion, surpassing forecasts and highlighting challenges for finance minister Rachel Reeves as she balances fiscal discipline with increased spending. Meanwhile, former deputy prime minister John Prescott, known for bridging Labour’s traditional and modern wings, passed away at 86. JD Sports Fashion saw its shares drop 9% after warning profits would hit the lower end of forecasts due to October’s weak consumer spending and weather challenges. Additionally, the FCA is assessing timelines for motor finance complaints following a ruling on undisclosed commissions, potentially leading to substantial compensation claims. 

Top Market Movers: Among top gainers on FTSE 100 index, Halma PLC (LSE: HLMA) witnessed a rise of 7.75% followed by Endeavour Mining PLC (LSE: EDV) which gained around 2.03%. 

Commodity Update: The U.S. dollar held steady on Thursday as traders awaited more details on President-elect Donald Trump's policies and speculated on the possibility of less aggressive interest rate cuts from the Federal Reserve. In commodities, gold rose by 0.10% to $2,654.40 per ounce, silver gained 0.24% to $31.07, and copper increased 0.26% to $9,113.50 per ton. Brent crude climbed 0.40% to $73.09 per barrel amid supply concerns fueled by escalating geopolitical tensions between Russia and Ukraine. OPEC+ is expected to delay output increases when it meets Dec. 1 due to weak global oil demand. 

Our Stance: Global markets reflected mixed sentiment on Thursday, with geopolitical tensions and disappointing tech sector performance weighing on investor confidence. European equities dipped, led by a decline in chip stocks after Nvidia's slower revenue growth expectations disappointed investors. Kyiv's intensified use of Western weapons, including British Storm Shadow and U.S. ATACMS missiles, has heightened conflict fears, with Russia warning of significant escalation. Meanwhile, the Nasdaq closed lower, reflecting caution ahead of Nvidia's earnings and concerns over Target's weak results. Nvidia's post-bell drop further underscores the market's sensitivity to high-growth tech disappointments and geopolitical uncertainties, which continue to dominate sentiment. Markets appear cautious amid geopolitical tensions and mixed corporate earnings, suggesting a preference for safe-haven assets and a focus on energy and defense sectors for resilience in the near term. However, volatility may persist as investors navigate inflation pressures, central bank policies, and the evolving conflict in Eastern Europe. 

FTSE 100 

The FTSE 100 closed at 8,085.07, posting a modest decline of 0.17%, forming a bearish candlestick pattern. This pattern, coupled with increased trading volume, suggests weakening investor sentiment. The index remains below its 21-period Simple Moving Average (SMA), which continues to serve as immediate resistance, capping any potential upward movement. The Relative Strength Index (RSI) is at 42.18, approaching oversold territory, which could signal that the market is either stabilizing or forming a divergence, with higher highs and lower lows depending on how market conditions unfold. On the weekly chart, the 50-period SMA is a key support level of around 8,032, with the next critical support at 7,932. Immediate resistance is situated at 8,400, and a breakout above this level could indicate the start of a bullish reversal. Conversely, if the FTSE 100 falls below the 8,020 mark, it could pave the way for further declines. Investors should closely monitor these key levels, as they will dictate the direction of the market, determining whether the FTSE 100 enters a period of consolidation or continues its downward trajectory.