FTSE 100 Steady as Growth Risks Temper Optimism

Index Update: The FTSE 100 index, a key benchmark index for the London stock exchange, was trading rose around 0.11% on 29 December 2025. 

Macro Update: In late 2025, the UK economy faces stagnation, with GDP growth stalling at 0.1% and unemployment rising to 5.1%. While the Bank of England cut interest rates to 3.75% in December to stimulate activity, inflation remains sticky at 3.2%. High public debt and a cooling labor market define a fragile outlook as the nation enters 2026. 

Top Market Movers: Among top gainers on FTSE 100 index, Convatech Group PLC (LSE: CTEC) witnessed a rise of 2.27% followed by Fresnillo PLC (LSE: FRES) which gained around 2.19%. 

Commodity Update: The yen recovered modestly on Monday after last week’s sharp decline, as markets reassessed the timing of further BoJ rate hikes and potential intervention risks amid thin year-end trading. In commodities, gold slipped 0.34% to USD 4,537.20, silver rose 1.30% to USD 78.203, and copper surged 6.32% to USD 12,883.00. Brent crude climbed 0.90% to USD 60.78, supported by renewed Middle East supply concerns and elevated geopolitical risk premiums, although uncertainty around Russia–Ukraine peace negotiations continues to cap upside momentum. 

Our Stance: Our stance is that the UK economy is in a state of "cautious restraint." Policymakers are balancing a slowing labor market against persistent 3.2% inflation to avoid a recession. 

FTSE 100: the FTSE 100 Index edged lower by 2.25 points to close at 9,868.43, forming a small bearish candlestick. Despite this marginal pullback, the broader technical outlook remains constructive. On the daily chart, the index continues to trade above its 21-period Simple Moving Average (SMA), which serves as a key dynamic support and reinforces the prevailing short-term bullish trend. A notable support zone is positioned near 9,800, and maintaining price action above this level will be critical for sustaining the ongoing uptrend. On the upside, a decisive breakout above immediate resistance levels would provide strong bullish confirmation, potentially triggering renewed upward momentum and further improving investor sentiment. From a broader perspective, the index also remains above its 21-period SMA on the weekly chart, underscoring the resilience of its longer-term bullish structure despite recent short-term fluctuations. 

Source - EODHD/Others