FTSE 100 Gains Amid Thin Trading:

Image Source: Krish Capital Pty Ltd

Index Update: The FTSE 100 index, a key benchmark index for the London stock exchange, went up around 0.57% on 24 December 2024. Moreover, Energy, Basic Materials & Financials sector has faced a significant growth.

Macro Update:  The UK's FTSE 100 continued its upward momentum on Tuesday, rising by 0.6%, although trading volumes remained light as investors geared up for the Christmas break. The automobiles and parts sector led the way with a 1.1% increase, contributing to the broad-based market gains. The energy sector followed suit, adding 0.8%, supported by a slight uptick in oil prices driven by a cautiously positive market outlook for the short term. With UK stock markets closing early at 1230 GMT for the Christmas holiday, attention has now shifted to global economic events in 2025, particularly with the potential return of Donald Trump to the White House, which has sparked caution among central banks regarding future monetary policy adjustments.

Top Market Movers: Among top gainers on FTSE 100 index, Airtel Africa PLC (LSE: AAF) witnessed a rise of 3.04% followed by JD Sports Fashion PLC (LSE: JD.) which gained around 2.21%.

Commodity Update: The U.S. dollar remained strong on Tuesday, driven by expectations of prolonged high U.S. interest rates, leaving other currencies near key lows. With the holiday season approaching, trading volumes are expected to thin out, and market activity will likely decrease as the year-end nears. As major economic data releases are sparse, the focus will remain on the interest rate outlook. In commodities, gold rose by 0.13% to $2,631.40, silver climbed 0.28% to $30.37, and copper gained 0.14% to $8,955.50. Brent crude increased 0.40%, reaching $73.20 per barrel, supported by positive U.S. economic data and growing oil demand in India.

Our Stance: The FTSE 100 has shown positive momentum recently, supported by strong gains in sectors like Energy, Basic Materials, and Financials, although trading volumes remain low due to the holiday season. Despite the recent uptick, the index still faces downward pressure, with key technical indicators such as the 50-period Simple Moving Average and RSI suggesting potential short-term weakness. Investors are advised to watch critical support levels around 8,020 and 7,932, while a breakout above 8,400 could signal a shift toward a more bullish outlook.

FTSE 100

The FTSE 100 closed at 8,102.72 on Monday, gaining 0.22%, following a bullish candlestick pattern while holding strong support at 8,002.00. Despite the positive move, the index remains below its 50-period Simple Moving Average (SMA), indicating continued downward pressure in the near term. The Relative Strength Index (RSI) at 36.80 reflects a bearish sentiment with a slight negative bias. On the weekly chart, the FTSE 100 declined 2.60%, closing at 8,041.61, just above the 50-period SMA at 8,092.76, which provides some support. A critical level to watch is 7,932. Immediate resistance is at 8,400, and a breakout above this level could signal a shift toward a bullish trend. However, if the index drops below 8,020, it may indicate further downside risks. Investors should closely monitor these key levels to gain clearer direction in the upcoming sessions.