Index Update: The FTSE 100 index, a key benchmark index for the London stock exchange, was trading declined around 0.32% on 05 February 2026.

Macro Update: In early 2026, UK economic activity shows signs of strength, with the Services PMI reaching a five-month peak at 54.0. Despite this, persistent inflation at 3.4% and increasing labor costs could postpone additional interest rate cuts from the current 3.75%. Although the FTSE 100 has climbed to historic levels, a rise in unemployment is forecasted.

Top Market Movers: Among top gainers on FTSE 100 index, London Stock Exchange Group (LSE: LSEG) witnessed a rise of 6.81% followed by Relx PLC (LSE: REL) which gained around 4.58%.

Commodity Update: The U.S. dollar steadied in early Asian trade as markets awaited interest rate decisions from the European Central Bank and the Bank of England, both widely expected to keep policy unchanged. Commodities weakened, with gold slipping 1.76% to USD 4,864.70, silver tumbling 9.56% to USD 76.33, and copper easing 1.35% to USD 12,885.50. Brent crude fell 1.40% to USD 68.47 after the U.S. and Iran agreed to hold talks in Oman, easing geopolitical supply concerns.   

Our Stance: The UK's vulnerable economic recovery, projected at 0.9% growth, faces dual challenges of high unemployment and stubborn inflation. The Bank of England is holding its key rate at 3.75%, adopting a cautious "wait-and-see" approach to navigate these conflicting risks and avoid economic stagnation.

FTSE 100: The FTSE 100 declined 37.49 points to trade near 10,364.85, yet continued to hold comfortably above the key 9,800 support zone, preserving a stable broader structure. The 21-day and 50-day Simple Moving Averages remain positioned below current levels, providing underlying support and leaving room for near-term consolidation. Momentum has shown improvement, with the RSI turning firmer. On the downside, immediate support is seen near 8,950, while resistance is located around 10,400 and 10,600.

Source: Charts by EODHD/Others

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