Global Markets Waver Amid Trade Tensions, Rate Uncertainty, and Geopolitical Risks:

Index Update: The FTSE 100 index, a key benchmark index for the London stock exchange, went down around 0.48% on 21 March 2025.  

Macro Update:  A major fire at an electrical substation near Heathrow Airport led to a power outage and global flight disruptions, as 70 firefighters battled the blaze. Simultaneously, concerns are rising over hedge funds’ leveraged positions in UK gilts, potentially destabilizing the bond market, as flagged by the Bank of England. Meanwhile, Britain reported a higher-than-expected public sector borrowing of £10.7 billion in February, prompting expectations of spending cuts. The Bank of England maintained interest rates at 4.5%, signaling no immediate cuts amid global economic uncertainty. On the energy front, Shell aims to begin gas exports from Venezuela a year earlier than planned, while the UK is exploring linking its carbon market with the EU's ETS as part of broader UK-EU cooperation talks. 

Top Market Movers: Among top gainers on FTSE 100 index, Vodafone Group PLC (LSE: VOD) witnessed a rise of 1.56% followed by 3I Group PLC (LSE: III) which gained around 1.06%. 

Commodity Update: The U.S. dollar strengthened on Friday, marking its best performance in three weeks, supported by the Federal Reserve's stance on not rushing to cut interest rates. Meanwhile, the Australian and New Zealand dollars remained weak after significant losses on Thursday, impacted by concerns over the economic toll from U.S. President Donald Trump’s aggressive global trade tariffs. In commodities, gold fell 0.17% to $3,038.70, silver dropped 0.64% to $33.77, and copper declined 0.17% to $9,914.20. However, Brent crude rose 0.60% to $72.46, driven by new U.S. sanctions on Iran and OPEC+ production cuts signalling tighter future supplies. 

Our Stance: Global markets are showing heightened caution amid growing economic and geopolitical uncertainty. U.S. stocks ended slightly lower as investors weighed mixed economic data and the Fed’s steady policy stance against escalating tariff tensions under the Trump administration. In the UK, hedge funds' leveraged bets on government bonds have raised concerns of potential instability in the gilt market, highlighted by the Bank of England. Asian and European markets followed a risk-off trend, pressured by tariff fears and global growth concerns, while gold prices remained near record highs as a safe-haven asset. Eurozone bond yields dropped sharply amid fears of U.S. economic slowdown and trade uncertainty, despite Germany’s plans to ramp up fiscal spending. Overall, market sentiment is clouded by trade tensions, cautious central bank outlooks, and signs of weakening economic momentum. 

FTSE 100 

The FTSE 100 trades at 8,669.94, showing a slight decline of 0.37% on Friday, forming a bearish candlestick pattern. Despite this, the index remains above the 50-period Simple Moving Averages (SMAs), indicating strong support. However, the price is retreating from the 21-period SMA, signalling the potential for a short-term correction. This technical setup suggests caution, with a need for further clarity in the coming sessions. The index is holding above a crucial horizontal support level, suggesting a shift towards a more bullish sentiment following recent lows. The Relative Strength Index (RSI) is at 51.03, indicating moderate bullishness with potential for further upside. While market uncertainty persists, short-term traders may look for opportunities near key support levels, with momentum shifts likely determining whether the recovery persists or a downward trend takes hold. The next few trading sessions will be pivotal in confirming whether the bullish outlook prevails or a decline resumes. 

Data Source - EODHD/Others