London Market is in Red as Fed hold odds pick-up:

Image Souce: Krish Capital Pty Ltd

Index Update: The FTSE 100 index, a key benchmark index for the London stock exchange, went down around 0.66% on 22 October 2024. Energy & Basic Materials sector demonstrated a substantial growth. Sectors such as Technology, Utilities and Real Estate faced a significant decline.

Macro Update:  HSBC Holdings announced a significant restructuring under its new CEO, Georges Elhedery, combining commercial and investment banking to cut costs and boost returns. This reorganization also included the appointment of Pam Kaur as the bank’s first female CFO. British public borrowing exceeded forecasts, hitting £79.6 billion from April to September, adding pressure on finance minister Rachel Reeves ahead of her upcoming budget. Meanwhile, Hunting Plc reduced its annual profit outlook, citing decreased client activity due to lower oil prices and declining U.S. natural gas pricing.

Top Market Movers: Among top gainers on FTSE 100 index, Fresnillo PLC (LSE: FRES) witnessed a rise of 3.14% followed by Antofagasta PLC (LSE: ANTO) which gained around 1.11%.

Commodity Update: On Tuesday, the U.S. dollar remained strong at a two-and-a-half-month high, driven by expectations of a cautious approach to interest rate cuts by the Federal Reserve. At the same time, uncertainties surrounding the upcoming U.S. election kept investors alert. In the commodities market, gold rose 0.27% to $2,745.15 per ounce, silver climbed 0.42% to $34.42, and copper increased by 0.35% to $9,605.50 per ton. However, Brent crude futures dipped 0.3% to $74.03 amid renewed calls for a ceasefire in the Middle East and ongoing sluggish demand from China, the world's largest oil importer.

Our Stance: Gold prices are near record highs due to uncertainties surrounding the U.S. election, ongoing Middle East tensions, and expectations of central bank interest rate cuts. This reflects gold’s role as a safe-haven asset during geopolitical and economic instability. Meanwhile, European stocks remained flat as investors weighed the strong outlook from companies like SAP and Logitech against global uncertainties and the possibility of rate cuts. Additionally, oil prices dipped as concerns over slowing demand growth in China and Middle East conflict developments affected market sentiment. Globally, the market remains in a cautious state with geopolitical tensions and upcoming U.S. elections shaping the sentiment across multiple asset classes.

FTSE 100

On the daily chart, the FTSE index closed at 8,318.24, down 0.48%, forming a bearish candlestick pattern with increased trading volume, suggesting a slight decline in investor confidence. After opening at 8,291.46, the index displayed initial uncertainty and nervous momentum. It is currently trading above the 21-period Simple Moving Average (SMA), a key support level while remaining above the 50-period SMA on the weekly chart, which indicates a generally positive long-term outlook. The Relative Strength Index (RSI) is at 51.02, suggesting a modest increase in bullish momentum. Following a recent test of the critical resistance level at 8,400, a breakout above this level could generate additional bullish sentiment in the market. On the other hand, the 8,100 level serves as a strong support area, and with the index moving within a narrow range, any breakout in either direction could significantly impact the prevailing trend.