Image Souce: Krish Capital Pty Ltd

Index Update: The FTSE 100 index, a key benchmark index for the London stock exchange, went up around 0.62% on 04 November 2024. Energy, Financials & Basic Materials sector demonstrated a substantial growth. 

Macro Update:  British Prime Minister Keir Starmer pledged economic reforms following the Labour government’s first budget, which failed to enhance growth forecasts and led to a decline in government bond prices. Finance minister Rachel Reeves announced higher taxes, borrowing, and spending, yet the budget watchdog projected weaker growth beyond 2024. Bond prices dropped after her speech, raising borrowing costs, though they later stabilized. In other news, Sainsbury’s expanded its Aldi Price Match initiative to over 800 convenience stores, boosting competitiveness before Christmas. Additionally, M&G acquired a 65% stake in European real estate investor BauMont, positioning itself to capitalize on a future commercial property market recovery. 

Top Market Movers: Among top gainers on FTSE 100 index, Frasers Group PLC (LSE: FRAS) witnessed a rise of 2.67% followed by NatWest Group PLC (LSE: NWG) which gained around 2.23%. 

Commodity Update: The dollar weakened in Asia on Monday as investors prepared for potential shifts in the global economy with the upcoming U.S. elections and anticipated interest rate cuts. This could significantly impact bond yields. In commodities, gold dipped 0.02% to $2,748.50 per ounce, while silver fell 0.06% to $32.65. Conversely, copper rose 0.54% to $9,601.50 per ton. Brent crude futures increased by 1.5% to $74.23 a barrel after OPEC+ announced a delay in a planned output hike, citing weak demand pressures. Investors are now focused on the election for further insights this week. 

Our Stance: Chinese stocks rose on Monday, with the Shanghai Composite and CSI300 indices climbing over 1% as markets geared up for a significant week, anticipating a U.S. rate cut, presidential election, and a major policy meeting in China. In the U.S., a new Iowa poll showed Kamala Harris narrowly leading Donald Trump, marking a potential shift in a traditionally Republican-leaning state, which could impact campaign strategies. The market momentum in China indicates optimism about both domestic and U.S. policy developments, suggesting that traders are betting on supportive economic measures. The stability in European markets may reflect a cautious wait-and-see approach as the U.S. election could influence global markets and trade policies. The Iowa poll showing Harris ahead hints at changing voter dynamics in key states, which could sway market expectations depending on election outcomes and policy implications in both domestic and international arenas. 

FTSE 100 

The FTSE index closed at 8,177.15, reflecting a modest increase of 0.83%. A bullish candlestick pattern has emerged, raising investor interest, particularly as trading volume rises. The index is trading below the 21-period Simple Moving Average (SMA), which now serves as a resistance level. The Relative Strength Index (RSI) is at 43.18, indicating some recovery and a potential shift from bearish to bullish momentum. On the weekly chart, the 50-period SMA provides a more favourable long-term outlook, with the index remaining above this crucial support level. Key levels to monitor include resistance at 8,400 and support at 8,100. A breakout above 8,400 could bolster market sentiment, while a drop below 8,100 may signal further declines. With the index trapped within a tight range, any breakout—either upward or downward—could significantly influence the market trend. Keeping an eye on these critical levels will be vital for anticipating potential shifts in the market. 

 

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