Global Markets rallying on account of Trump elected as the US President:

Image Souce: Krish Capital Pty Ltd

Index Update: The FTSE 100 index, a key benchmark index for the London stock exchange, went up around 1.18% on 06 November 2024. Industrials, Technology & Consumer Cyclicals sector demonstrated a substantial growth. While, Real Estate & HealthCare sector has faced a significant decline. 

Macro Update:  UK think tank reported that the country's economic growth could significantly slow, potentially halving, if Donald Trump wins the U.S. presidential election and enacts broad import tariffs. Even without the tariffs, UK growth is projected to decelerate from 1.2% in 2025 to 1.1% in 2026, with only a modest increase to 1.7% by 2030. Domino's Pizza Group in the UK reported an increase in orders in the fourth quarter, driven by more delivery orders and discounted prices, with a 5.8% rise in total orders for the first five weeks. Additionally, UK government bond yields showed mixed movements following Trump’s election victory, with two-year yields dropping four basis points to 4.475%, while 30-year yields rose slightly to 4.976%, reaching a recent high. 

Top Market Movers: Among top gainers on FTSE 100 index, Marks & Spencer Group PLC (LSE: MKS) witnessed a rise of 7.51% followed by Ashtead Group PLC (LSE: AHT) which gained around 6.37%. 

Commodity Update: The U.S. dollar surged broadly on Wednesday, fueled by early exit polls suggesting a tight lead for Republican Donald Trump in the presidential race. Commodities saw mixed performance: gold increased 0.02% to $2,750.50/oz, silver dropped 0.59% to $32.58, and copper fell 0.83% to $9,655.50/ton. Brent crude slipped 0.46% to $75.18 per barrel after data showed a larger-than-expected U.S. inventory build, while concerns over potential Gulf of Mexico supply disruptions remained. Market focus shifted to the presidential election outcome and the upcoming FOMC rate decision, which could influence broader economic trends. 

Our Stance: Following Donald Trump’s projected U.S. election victory, markets experienced a substantial reaction. U.S. stock futures and the dollar surged as investors anticipated a return to Trump’s tax cuts, trade tariffs, and reduced regulations, which they believe could stimulate economic growth. Bitcoin reached a record high above $75,000, as it is often seen as a hedge against inflation, which may rise due to potential increased government spending. Treasury yields also spiked, with the 10-year yield up by 18 basis points, reflecting expectations of heightened inflationary pressures. In contrast, gold prices dropped as the dollar strengthened, reducing gold’s appeal as a safe haven. Investors now look to the Federal Reserve’s upcoming decisions on interest rates in response to this inflationary outlook. 

FTSE 100 

The FTSE 100 index closed at 8,172.19, recording a slight decline of 0.14%. Despite the loss, a bearish candlestick pattern has emerged, attracting growing attention from investors as trading volumes increase. The index remains below the key 21-period Simple Moving Average (SMA), which is now acting as immediate resistance. However, with the Relative Strength Index (RSI) at 42.92, there is potential for a shift toward bullish momentum as the index shows signs of a possible recovery. Looking at the weekly chart, the 50-period SMA continues to provide solid long-term support, suggesting a positive outlook if the index manages to stay above this level. Key technical levels to monitor include resistance at 8,400 and support at 8,100. A break above the 8,400 resistance could ignite further bullish sentiment, while a move below 8,100 would likely signal deeper declines. The index is trading within a relatively tight range, and any breakout—either upward or downward—could determine the direction of the next major move. Given the approaching political events and market sentiment, careful attention to these critical levels will be vital for gauging the potential for a trend shift in the coming days.