FTSE 100 Trading at 3-week high boosted by Miners:

Image Souce: Krish Capital Pty Ltd

Index Update: The FTSE 100 index, a key benchmark index for the London stock exchange, went up around 0.23% on 25 November 2024. Basic Materials, Financials & Technology sector demonstrated a substantial growth. Moreover, sectors such as Utilities, Consumer Cyclicals & Energy faced a significant decline. 

Macro Update:  Bank of England Deputy Governor Clare Lombardelli emphasized concerns about the risk of inflation exceeding forecasts and advocated for gradual interest rate reductions, stating risks to inflation were balanced. Meanwhile, a survey by the Confederation of British Industry revealed that British employers are responding to a £25 billion tax hike with plans to cut jobs, investment, and training, viewing Britain as a less attractive investment destination. In the financial sector, the FCA fined Barclays £40 million for failing to disclose arrangements with Qatari entities during the 2008 financial crisis. Additionally, Anglo American announced the sale of its Australian steelmaking coal mines to Peabody Energy for up to $3.78 billion, marking a strategic shift toward copper to enhance value and fend off potential takeovers. 

Top Market Movers: Among top gainers on FTSE 100 index, JD Sports Fashion PLC (LSE: JD.) witnessed a rise of 5.89% followed by EasyJet PLC (LSE: EZJ) which gained around 1.97%. 

Commodity Update: The dollar lost some of its recent strength on Monday as investors anticipated that the U.S. Treasury secretary pick would calm concerns in the bond market, leading to a drop in yields and reducing the dollar's rate advantage. In the commodities market, gold fell by 0.60% to $2,720.70 per ounce, while silver dropped 1.06% to $31.43 per ounce. Copper, however, rose by 0.98% to $9,073.50 per ton. Brent crude increased by 0.20% to $73.50 per barrel amid rising geopolitical tensions between Western powers and major oil producers Russia and Iran, raising supply disruption fears. 

Our Stance: European and U.S. markets started the week on a positive note, reflecting optimism driven by key political and economic developments. The pan-European STOXX 600 rose by 0.5% to hit a two-week high, buoyed by strong performances in basic resources and personal household goods sectors. In the U.S., Treasury yields fell sharply as markets responded positively to President-elect Donald Trump's nomination of Scott Bessent as Treasury Secretary. Bessent, viewed as a market-savvy Wall Street veteran and a fiscal conservative, is expected to focus on controlling deficits and taking a measured approach to tariffs, which reassured bond markets. Benchmark 10-year Treasury yields dropped to 4.35%, their lowest since mid-November, indicating investor confidence in a more disciplined fiscal outlook under his stewardship. The dollar retreated after a period of strength, as lower Treasury yields reduced its rate advantage, suggesting a shift in investor focus toward stability and fiscal prudence. The collective market movements highlight an environment of cautious optimism, driven by expectations of balanced economic policies and sustained support for growth in both Europe and the U.S. 

FTSE 100 

The FTSE 100 closed at 8,149.27, gaining 1.38% and forming a bullish candlestick pattern, which, along with increased trading volume, signals strong investor sentiment. The index has moved above both its 21-period and 50-period Simple Moving Averages (SMA), now acting as key support levels, indicating the potential for further gains. The Relative Strength Index (RSI) at 59.04 has entered bullish territory, suggesting the continuation of an upward trend. On the weekly chart, the index closed at 8,262.08, up 2.62%, reversing from the 50-period SMA at 8,047.08, which remains a strong support level, with additional support at 7,932. Immediate resistance is at 8,400, and a breakout above this level could confirm a bullish reversal. However, a drop below 8,020 may signal further declines. Investors should closely monitor these levels to assess whether the market will consolidate or maintain its upward momentum.