Markets lift on AI optimism and easing trade tensions, but economic risks linger:

Image Source : Krish Capital Pty Ltd

Index Update: The FTSE 100 index, a key benchmark index for the London stock exchange, went up around 0.29% on 04 June 2025.  

Macro Update: Britain unveiled a £15.6 billion transport investment plan aimed at revitalizing underfunded cities outside London, as the Labour government faces pressure to improve infrastructure and public services. Meanwhile, the services sector returned to modest growth in May after a tariff-related dip in April. In trade, the U.S. announced an exemption for British steel and aluminum from a planned tariff hike, easing some tensions. Retailer B&M reported weak profit growth amid consumer spending cutbacks, while WH Smith remained optimistic about summer travel demand. Bank of England Governor Andrew Bailey reaffirmed a cautious stance on rate cuts amid global trade volatility. London markets edged higher following the tariff relief news, and Tesla’s UK sales dropped over 45% YoY in May, though it retained its top spot in battery electric vehicle sales. 

Top Market Movers: Among top gainers on FTSE 100 index, Babcock International Group PLC (LSE: BAB) witnessed a rise of 4.01% followed by Games Workshop Group PLC (LSE: GAW) which gained around 3.11%. 

Commodity Update: The dollar edged lower on Wednesday ahead of key U.S. employment data and trade negotiations led by President Trump. A Wednesday deadline loomed for countries to present trade offers, coinciding with a tariff hike on steel and aluminium. Meanwhile, gold rose 0.34% to $3,380.50, silver gained 0.30%, and copper climbed 0.17%. Brent crude inched up 0.10% to $65.58 amid rising OPEC+ output and global economic concerns. 

Our Stance: Global market sentiment remained cautiously optimistic, with U.S. futures edging higher on strong AI-driven results from Hewlett Packard Enterprise and gains in tech stocks like Nvidia and AMD, despite lingering trade policy uncertainty. European markets also advanced, led by Germany's record-high index after the approval of a €46 billion tax relief package, though economic data reflected stagnant growth and sharp contraction in Germany's services sector. Barclays and other major banks raised S&P 500 targets, citing easing trade risks and earnings growth expectations. Meanwhile, euro zone bond yields ticked up on expectations of further ECB rate cuts, Japan's equities rebounded amid optimism on China trade ties, and oil prices held steady as OPEC+ output increases were balanced by Canadian supply disruptions. 

FTSE 100: The FTSE 100 rose 0.25% on Wednesday to trade at 8,808.55, extending its bullish momentum amid strong investor confidence. The index continues to hold above its 50-period Simple Moving Average, reinforcing the strength of the ongoing uptrend. A recent bullish candlestick formation and a stable 14-period RSI at 65.59 reflect growing positive momentum. The overall trend remains constructive as long as key support levels are respected. A decisive move above immediate resistance could unlock further upside potential. However, traders should remain watchful for any consolidation or early signs of weakness that may signal a short-term pause in the rally.​ 

FTSE 100 Technical Chart, Source - EODHD/Others