Image Souce: Krish Capital Pty Ltd

Index Update: The FTSE 100 index, a key benchmark index for the London stock exchange, went down around 0.01% on 07 November 2024. Basic Materials, Energy & Real Estate sector demonstrated a substantial growth. While, Technology, Financials & HealthCare sector has faced a significant decline. 

Macro Update:  The Bank of England (BoE) is expected to lower interest rates on Thursday, marking only the second cut since 2020. However, investors are keen to see if the BoE will hint at further rate moves, particularly following the recent inflation-boosting budget by Finance Minister Rachel Reeves. The Office for Budget Responsibility forecasts inflation at 2.6% by 2025, above the BoE's target of 2%. UK house prices hit a record in October, though growth was the smallest in three months. Meanwhile, Sainsbury's maintained its 10% profit growth forecast, aided by competitive pricing against Aldi and increased dining-at-home trends. However, the UK’s FTSE 100 dipped by 0.1% as homebuilders and miners lost ground despite a global market rally. 

Top Market Movers: Among top gainers on FTSE 100 index, IMI PLC (LSE: IMI) witnessed a rise of 3.62% followed by Antofagasta PLC (LSE: ANTO) which gained around 3.59%. 

Commodity Update: The dollar remained near a four-month high on Thursday as markets reacted to Donald Trump's victory in the 2024 U.S. presidential election. Investors shifted focus to upcoming central bank decisions, including the Federal Reserve's rate meeting. Commodities saw mixed results: gold dropped 0.44% to $2,664.50/oz, silver fell 0.40% to $31.19, and copper rose 0.83% to $9,444.50/ton. Crude oil prices increased 0.5% to $75.28 a barrel, with attention also on potential fiscal stimulus in China. Market participants watched closely for economic signals from the FOMC's upcoming policy decisions. 

Our Stance: European markets are expected to experience heightened economic pressure following Donald Trump's election, as his potential tariff policies could weaken the euro and hurt European stocks. Although European bonds are benefiting from a likely rate cut by the ECB to offset an economic slowdown, investor caution persists. In the U.S., the dollar saw its largest one-day gain in years, potentially impacting both American manufacturers and emerging markets. Treasury yields remained high, reflecting concerns that Trump’s policies could increase U.S. inflation and impact the national debt balance. Investors should closely monitor the impact of Trump’s policy implementation on both U.S. and European markets. While European bonds may provide some refuge, tariffs and a stronger dollar could create challenges for exports and elevate inflation, affecting global investment strategies. 

FTSE 100 

The FTSE 100 closed at 8,166.68, down 0.07%, as a bearish candlestick pattern attracted investor attention amidst rising trading volumes. The index remains below the 21-period Simple Moving Average (SMA), acting as resistance. With the Relative Strength Index (RSI) at 42.42, there’s potential for a bullish reversal if the index recovers, particularly with the upcoming UK rate decision in focus. On the weekly chart, the 50-period SMA continues to provide strong support, suggesting a positive outlook if the index stays above this level. Key levels to monitor include 8,400 (resistance) and 8,100 (support). A break above 8,400 could trigger further upside, while a fall below 8,100 may signal deeper declines. With tight range-bound trading, any breakout could set the direction for the next major move, making these levels crucial for forecasting the near-term trend. 

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