Markets Lifted by Tariff Delay and Retail Gains, Though Inflation 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 0.72% on 27 May 2025.  

Macro Update: British economic indicators showed mixed signals as retail sales surged 1.2% month-on-month in April, buoyed by sunny weather and improved consumer sentiment, suggesting resilience despite broader economic challenges. However, overall shop prices declined 0.1% YoY for the second month, even as food price inflation rose to 2.8%, with retailers facing higher payroll taxes and minimum wage pressures. Meanwhile, the government announced a record £3bn investment in skills training, Ofgem cut energy price caps by 7% from July, and the sector braced for potential insurance rate hikes following cyberattacks, including a major incident at M&S. 

Top Market Movers: Among top gainers on FTSE 100 index, Melrose Industries PLC (LSE: MRO) witnessed a rise of 4.21% followed by Bae Systems PLC (LSE: BA.) which gained around 3.89%. 

Commodity Update: The dollar remained weak Tuesday amid investor worries over a major U.S. tax and spending bill that could worsen the national debt. Global stocks and the euro rose Monday while U.S. markets were closed. Focus shifts to Senate debates on Trump’s tax-cut plan. Gold fell 0.68% to $3,370.90, silver 0.28% to 33.54, and copper 0.24% to 9599.20. Brent crude dipped 0.12% to $64.62 ahead of an OPEC+ meeting. 

Our Stance: Global markets found temporary relief after U.S. President Trump postponed steep tariffs on EU goods, boosting Canadian and global equities while easing immediate trade concerns. However, underlying investor caution persists amid ongoing unpredictability in U.S. economic policy, leading to reduced dollar exposure and increased interest in gold. Despite this shift, the euro has not emerged as a true alternative, with ECB President Lagarde attributing its stagnant global role to the EU's incomplete financial and security integration and a lack of political will for deeper unification. 

FTSE 100: The FTSE 100 rose 1.06% to around 8,810.59, sustaining its bullish bias amid solid market sentiment. The index continues to trade above its 50-period Simple Moving Average, reinforcing the underlying strength. However, a recent bearish candlestick hints at weakening momentum, and the 14-period RSI has pulled back to 67.40 from overbought levels, signalling possible fatigue. While the rally may be slowing, the broader trend remains intact as long as key support levels are respected. A breakout above nearby resistance could renew bullish momentum, though traders should remain cautious if signs of short-term weakness continue to build.​ 

FTSE 100 Technical Chart, Source - EODHD/Others