Markets Strained by Geopolitical Tensions and Central Bank Uncertainty:

Image Source : Krish Capital Pty Ltd

Index Update: The FTSE 100 index, a key benchmark index for the London stock exchange, went down around 0.17% on 19 June 2025.

Macro Update: The Bank of England is expected to hold interest rates steady as it monitors easing inflation, softening wage growth, and a sharp April GDP contraction—the steepest since 2023—amid concerns over potential energy price shocks from the Israel-Iran conflict. Whitbread reported a 2% drop in UK accommodation sales due to weak demand and rising costs, while Shell is cautiously managing Middle East shipping routes. Lockheed Martin plans to help the UK build a new missile defence system, a northeast dairy farm has shifted to agri-tourism after flooding and low milk prices, and Equinor and Gwynt Glas secured leases for floating wind farms in the Celtic Sea.

Top Market Movers: Among top gainers on FTSE 100 index, Melrose Industries PLC (LSE: MRO) witnessed a rise of 3.70% followed by Pearson PLC (LSE: PSON) which gained around 1.49%.

Commodity Update: The dollar held firm Thursday amid Fed Chair Powell’s cautious inflation stance and rising Middle East tensions, keeping market sentiment fragile. The Fed kept rates unchanged, signalling possible cuts later this year, though consensus was mixed. Gold slipped 0.42% to $3,393.75, silver fell 0.36%, and copper edged down 0.10%. Brent crude declined 0.48% to $76.33 as uncertainty over U.S. action in the Israel-Iran conflict weighed on investors.

Our Stance: Escalating tensions between Israel and Iran, including Israeli strikes on nuclear sites and Iranian missile retaliation, have raised fears of broader conflict, with President Trump keeping markets on edge about possible U.S. involvement. This geopolitical uncertainty has driven investors toward safe-haven assets, causing global stocks to fall and the dollar to rise, while oil prices surged amid fears of supply disruption. Meanwhile, the Fed kept rates unchanged but signaled a slower pace of easing due to tariff-related inflation risks, though market expectations for a September rate cut have increased. Overall, markets are bracing for heightened volatility driven by both geopolitical and monetary policy uncertainty.

FTSE 100: The FTSE 100 is trading at 8,824.30, down 0.22%, as it faces resistance from recent momentum. The index continues to trade above its 50-day Simple Moving Average, maintaining its broader bullish trend. The RSI at 58.60 suggests waning momentum, indicating potential short-term consolidation. Immediate support lies at 8,750 a crucial level to watch. If this support holds, the index may resume its upward movement. However, a breakdown could lead to a modest pullback. Sector rotation and global macroeconomic cues remain key drivers of near-term action. Overall, the trend remains positive as long as support levels are respected.​

FTSE 100 Technical Chart, Source - EODHD/Others