Markets Poised: Rate Cut Hopes Lift UK Stocks, Oil Slips:

Image Source : Krish Capital Pty Ltd

Index Update: The FTSE 100 index, a key benchmark index for the London stock exchange, went up around 0.27% on 04 August 2025.  

Macro Update: The Bank of England is expected to cut its key interest rate to 4% this week, despite inflation nearing twice the 2% target in June. While policymakers remain divided due to persistent inflation and a weakening labour market, expectations of further rate cuts have lifted investor sentiment. British equities rebounded Monday, led by banks after the Supreme Court overturned a costly motor finance ruling. BP reported its biggest oil and gas discovery in 25 years in Brazil, Spectris accepted a £4.8bn buyout from Advent, and Senior posted a 10% H1 profit rise on robust aerospace demand. Barclays exited the Net Zero Banking Alliance but reaffirmed its 2050 net-zero goal and noted £500mn in green finance revenue. 

Top Market Movers: Among top gainers on FTSE 100 index, Lloyds Banking Group PLC (LSE: LLOY) witnessed a rise of 8.16% followed by Natwest Group PLC (LSE: NWG) which gained around 2.46%. 

Commodity Update: The dollar edged slightly higher on Monday despite a weak U.S. jobs report and President Donald Trump’s dismissal of Bureau of Labor Statistics Commissioner Erika McEntarfer, accusing her of faking data. July job growth fell short of expectations, with the prior month's numbers revised downward by 258,000. Gold rose 0.19% to $3,406.10, silver gained 0.06% to $36.95, copper climbed 0.24% to $9,663.00, while Brent crude fell 0.57% to $69.27 per barrel as OPEC+ planned a production hike. 

Our Stance: Global markets are reacting to a complex set of developments: Tesla’s board granted Elon Musk a new $29 billion share award to retain leadership amid a legal dispute over his prior compensation, as the company pivots more towards AI and robotics than traditional EVs. Meanwhile, a sharply weaker U.S. jobs report and downward payroll revisions have revived expectations of a Federal Reserve rate cut in September, now priced in at over 80% probability, helping stabilize Wall Street after a recent sell-off. Global equities edged higher on the back of this rate optimism, despite lingering concerns over economic data reliability. Separately, oil prices dipped after OPEC+ announced a major output hike, as markets weigh the impact of rising supply against ongoing geopolitical risks. 

FTSE 100 

The FTSE 100 is trading at 9,109.21, up 0.45%, holding firmly above a key breakout zone that now acts as support. The index remains above its 21-day and 50-day Simple Moving Averages, signalling a steady short-term uptrend. The RSI at 63.62 indicates strengthening momentum, though a brief consolidation phase may be underway. While a pullback toward 8,700 is possible, the broader technical setup continues to favour further upside after consolidation. 

FTSE 100 Technical Chart, Source - EODHD/Others