Markets Rebound on Softer U.S. Tone, but Economic Caution Persists:

Image Source : Krish Capital Pty Ltd

Index Update: The FTSE 100 index, a key benchmark index for the London stock exchange, went up around 1.38% on 23 April 2025.  

Macro Update:  Britain’s public finances came under fresh strain as government borrowing for the 2024/25 fiscal year surged to £151.9 billion—nearly £15 billion above forecast—while economic concerns deepened with the S&P Global Composite PMI dropping to 48.2 in April, signalling contraction in private sector activity amid rising global trade tensions. BP may be forced to scale back or cancel its share buyback plans if oil prices fail to recover, further weighing on its struggling stock. On the trade front, the U.S. is reportedly pushing for Britain to cut its automotive tariffs from 10% to 2.5%, ahead of discussions between UK and U.S. officials. Meanwhile, Britain is considering legislative changes to prevent its new state-owned energy firm, Great British Energy, from sourcing solar panels tied to suspected Chinese forced labour. In markets, the FTSE 100 extended gains, rising 0.6% on strength in consumer staples and financials, and Babcock projected a 17% jump in FY25 operating profit to £363 million, surpassing expectations. 

Top Market Movers: Among top gainers on FTSE 100 index, Croda International PLC (LSE: CRDA) witnessed a rise of 8.77% followed by Anglo American PLC (LSE: AAL) which gained around 6.67%. 

Commodity Update: The U.S. dollar surged then stabilized Wednesday as President Trump eased investor fears by backing away from firing Fed Chair Jerome Powell. This reassurance, along with optimism over trade deals, lifted market sentiment. Gold dropped 1.68% to $3,362.25, silver slipped 0.74% to $32.65, and copper dipped 0.08% to 9,384.15. Brent crude rose 1% to $68.12 amid U.S. sanctions on Iran and a sharp decline in U.S. crude stockpiles. 

Our Stance: Global markets showed a cautious rebound as easing rhetoric from U.S. President Donald Trump—particularly his assurance that Federal Reserve Chair Jerome Powell will not be dismissed and his hints at potential tariff reductions for China—helped restore some investor confidence. U.S. and European equities advanced on these developments, while gold prices dipped and oil prices rose over renewed U.S. sanctions on Iran and falling crude stockpiles. Despite these short-term gains, underlying concerns remain as eurozone growth continues to stagnate, particularly in Germany and France, and hedge funds heavily sold off consumer discretionary stocks, signaling expectations of a possible economic downturn. Overall, markets are reacting positively to reduced policy uncertainty, but sentiment remains fragile amid persistent macroeconomic headwinds. 

FTSE 100 

The FTSE 100 rose 1.22% on Wednesday, trading at 8,430.29 and forming a bullish candlestick pattern. This move positions the index above a key horizontal support zone, suggesting that bullish momentum may be returning. Despite the gain, the index continues to trade below its 50-period Simple Moving Average, indicating that broader downward pressure remains intact. The Relative Strength Index (RSI) has improved to 53.60, rebounding from the bearish territory and signalling a potential shift toward positive sentiment. A confirmed breakout above nearby resistance could pave the way for a short-term rally, placing key resistance levels in sharp focus. Until then, technical conditions remain mixed. 

FTSE 100 Technical Chart, Source - EODHD/Others