Markets Watch U.S.-China Trade Talks as UK Tackles Inflation and Strategic Spending:

Image Source : Krish Capital Pty Ltd

Index Update: The FTSE 100 index, a key benchmark index for the London stock exchange, went down around 0.22% on 09 June 2025.  

Macro Update: British finance minister Rachel Reeves is set to meet Chinese vice premier He Lifeng during his London visit, coinciding with key U.S.-China trade talks aimed at easing global economic tensions. Meanwhile, Qualcomm agreed to acquire British semiconductor firm Alphawave for $2.4 billion, lifting its shares by over 23%. In a separate development, NATO Secretary General Mark Rutte called for a 400% increase in air and missile defence ahead of the June summit, urging members to boost defence-related spending. At home, the Bank of England remains cautious about persistent UK inflation, with policymaker Megan Greene highlighting risks despite expectations of easing. Additionally, Reeves will allocate over £2 trillion in public funds, balancing healthcare, defence, and infrastructure priorities. 

Top Market Movers: Among top gainers on FTSE 100 index, M&G PLC (LSE: MNG) witnessed a rise of 2.49% followed by JD Sports Fashion PLC (LSE: JD.) which gained around 2.28%. 

Commodity Update: The dollar held firm on Monday as optimism from a strong U.S. jobs report gave way to caution ahead of key U.S.-China trade talks in London. With China battling deflation and U.S. sentiment under pressure, investors reassessed the dollar’s safe-haven appeal. Gold dipped 0.66% to $3,325.55, silver rose 0.14% and copper gained 0.25%. Brent crude eased 0.10% to $66.43 ahead of China’s upcoming economic data. 

Our Stance: Global markets are cautiously optimistic ahead of pivotal U.S.-China trade talks in London, which have helped lift emerging Asian equities and stabilize eurozone bond yields. Oil prices remained largely flat, but recent gains suggest hopes that a potential deal could support global demand. The dollar weakened as investors shifted focus from a resilient U.S. jobs report to uncertainties surrounding the trade discussions. Meanwhile, industry groups in the U.S. are lobbying against the proposed Section 899 tax targeting foreign investors, fearing its impact on business and market sentiment, especially as it could raise $116 billion over a decade and strain international investment flows. 

FTSE 100: The FTSE 100 traded marginally lower by 0.10% to 8,828.74 on Monday, yet maintained its position above the 50-day Simple Moving Average, highlighting underlying market strength. Despite a bearish candlestick, the 14-day RSI at 66.32 suggests continued bullish momentum. Recent optimism stems from positive sentiment around digital innovation and AI-driven growth, aligning with broader global tech market trends. The index’s resilience indicates investor confidence, though a short-term consolidation phase could occur following sector-specific rallies. As long as key support levels hold, the broader uptrend remains intact, offering a constructive outlook for the near term with selective buying opportunities.​ 

FTSE 100 Technical Chart, Source - EODHD/Others