FTSE 100 Pushes Higher on Rate-Cut Support

Index Update: The FTSE 100 index, a key benchmark index for the London stock exchange, was trading rose around 0.63% on 06 January 2026.

Macro Update: In January 2026, the UK economy faces weak growth and a softening labor market, with unemployment recently hitting a four-year high of 5.1%. To counter slowing momentum, the Bank of England cut interest rates to 3.75% in December 2025 as inflation eased to 3.2%.

Top Market Movers: Among top gainers on FTSE 100 index, Rentokil Initial PLC (LSE: RTO) witnessed a rise of 3.35% followed by Next PLC (LSE: NXT) which gained around 3.31%.

Commodity Update: The U.S. dollar held firm near a two-week high in early Asian trade on Tuesday as market anxiety over U.S. military action in Venezuela eased and dovish Federal Reserve remarks supported risk appetite on Wall Street. Gold rose 0.49% to USD 4,474.20, silver surged 2.31% to USD 78.51, and copper advanced 1.39% to USD 13,225.00. Meanwhile, Brent crude slipped 0.20% to USD 61.61 on expectations of higher Venezuelan output and ample global supply amid weak demand.

Our Stance: The UK economy remains stagnant in 2026, with GDP growth negligible. Despite Bank of England rate cuts to 3.75% aimed at stimulating the economy, a challenging backdrop persists. This "higher-for-longer" fiscal climate is defined by elevated unemployment at 5.1% and ongoing inflation of 3.2%.

FTSE 100: The FTSE advanced 44.55 points to trade at 10,049.12, staying comfortably above the key support zone near 9,500 and preserving a stable broader structure. The 21-day SMA at 9,808.93 and the 50-day SMA at 9,741.65 reflect a positive bias, suggesting scope for short-term consolidation. The RSI remains elevated and continues to strengthen, indicating firm underlying momentum. Immediate support is located near 8,950, while resistance levels are positioned around 10,200 and 10,350.

Source: Charts by TradingView

Source - EODHD/Others