Markets Juggle Policy Shifts and Trade Optimism Amid Political and Economic Uncertainty:

Image Source : Krish Capital Pty Ltd

Index Update: The FTSE 100 index, a key benchmark index for the London stock exchange, went up around 0.59% on 03 July 2025.  

Macro Update: British markets were unsettled after Finance Minister Rachel Reeves appeared emotional in Parliament amid backlash over welfare U-turns that disrupted her budget, raising fears of instability and causing gilt yields to spike and the pound to fall. Meanwhile, UK services activity expanded at its fastest pace in nearly a year, with prices rising at the slowest rate since early 2021—encouraging signs for the Bank of England ahead of a likely August rate cut. Long-dated bonds recovered some ground, and the FCA said it would extend misconduct rules beyond banking, responding to a 60% rise in reported non-financial misconduct cases. 

Top Market Movers: Among top gainers on FTSE 100 index, Coca Cola HBC AG PLC (LSE: CCH) witnessed a rise of 4.21% followed by Natwest Group PLC (LSE: NWG) which gained around 2.81%. 

Commodity Update: On Wednesday, the U.S. dollar hovered near its lowest level since February 2022, weighed down by dovish signals from Federal Reserve Chair Jerome Powell and concerns about former President Donald Trump’s spending bill. Gold fell 0.15% to $3,344.70, silver edged down 0.06% to $36.02, copper rose 0.30% to $9,963.35, and Brent crude increased 0.08% to $67.18 ahead of a key producers' meeting on August output. 

Our Stance: Global markets reflected cautious optimism as the U.S. House moved closer to passing President Trump's tax-cut and spending bill despite internal Republican tensions over its fiscal impact. Meanwhile, the U.S. labour market showed signs of slowing, with expectations of a higher unemployment rate potentially limiting near-term Fed rate cuts. On a positive note, Wall Street hit record highs, driven by tech gains and a trade deal with Vietnam that calmed tariff fears. European and emerging markets responded positively to easing trade tensions, while oil prices slipped amid concerns over renewed tariffs and expected supply increases. 

FTSE 100 

The FTSE 100 edged up 0.32% to trade at 8,810.03, approaching a key resistance area while hovering around its 21-day Simple Moving Average, indicating an indecisive short-term trend. However, the index continues to hold above its 50-day SMA, reinforcing the broader bullish structure. The Relative Strength Index at 56.02 signals moderate momentum, pointing to potential consolidation in the near term. Strong support at 8,600 remains intact, which may encourage renewed buying interest if stability persists. Market sentiment stays cautiously optimistic, influenced by ongoing sector rotation and evolving macroeconomic developments shaping investor strategies. 

FTSE 100 Technical Chart, Source - EODHD/Others