Markets hit by U.S. shutdown, steadied by AI optimism:

Image Source : Krish Capital Pty Ltd

Index Update: The FTSE 100 index, a key benchmark index for the London stock exchange, was trading around 0.15% up on 06 October 2025.  

Macro Update: The U.S. government shutdown entered its sixth day with no breakthrough between Republicans and Democrats, as President Trump threatened mass federal layoffs to pressure Congress. A federal judge meanwhile blocked Trump’s plan to deploy National Guard troops to Portland, adding to the administration’s political setbacks. In Europe, markets slumped as French Prime Minister Sebastien Lecornu’s abrupt resignation triggered sharp declines in the CAC 40 and bank stocks, fueling concerns over political instability and eurozone growth. In Asia, the yen weakened sharply after Sanae Takaichi’s victory in Japan’s leadership race reinforced expectations of continued fiscal expansion and delayed rate hikes, while gold benefited from global political and economic uncertainty. 

Top Market Movers: Among top gainers on FTSE 100 index, Prudential PLC (LSE: PRU) witnessed a rise of 2.38% followed by Glencore PLC (LSE: GLEN) which gained around 2.14%. 

Commodity Update: The yen slumped sharply against the U.S. dollar, marking its biggest drop in five months after Sanae Takaichi’s LDP leadership victory signalled a tilt toward expansionary fiscal policy, challenging the Bank of Japan. Gold rose 0.95% to $3,946.10, silver gained 0.42% to $48.16, and copper edged up 0.26% to $10,740.90. Brent crude climbed 1.01% to $65.16 as OPEC+ opted for a smaller-than-expected output increase. 

Our Stance: British construction activity contracted for the ninth straight month in September, though at a slower pace, with the PMI rising to 46.2 from 45.5 but still below the 50 mark, while the composite PMI slipped to 49.7, signaling the first private-sector decline since April. Firms delayed major investments ahead of Finance Minister Rachel Reeves’ budget, keeping sentiment among the weakest since late 2022. Jaguar Land Rover’s output was hit by a cyberattack, costing up to £500 million weekly, though parent Tata Motors’ solid balance sheet provides support. The UK government announced plans to simplify home-buying and reduce costs for buyers, while AstraZeneca and Daiichi Sankyo reported a breakthrough breast cancer drug that improved survival. The FTSE 100 hit record highs, led by financials and gold miners, as Fed rate-cut hopes lifted sentiment. 

FTSE 100 

The FTSE 100 is trading at 9,473.40, down 0.19%, yet continues to hold above key support at 8,900 and the 50-day SMA at 9,222.77. It also remains above the 21-day SMA at 9,289.73, suggesting limited upside momentum and a possible phase of consolidation. The RSI, positioned in the overbought zone, indicates a mildly positive bias. Immediate support lies at 8,950, with resistance levels at 9,500 and 9,800. 

Source - EODHD/Others