Markets Weigh UK Political Tensions and U.S. Policy Shifts Amid Corporate Optimism:

Image Source : Krish Capital Pty Ltd

Index Update: The FTSE 100 index, a key benchmark index for the London stock exchange, went down around 0.33% on 02 July 2025.  

Macro Update: The UK economy faces rising uncertainty as Bank of England policymaker Alan Taylor warned that the likelihood of a soft landing is diminishing, citing weakening demand and trade disruptions. Politically, Prime Minister Keir Starmer endured the largest rebellion of his tenure as 49 Labour MPs opposed scaled-back welfare reforms. Meanwhile, pay awards rose to 3.4% in the three months to May, driven by minimum wage hikes. In corporate news, Bytes Technology shares plunged over 27% on profit concerns, Secure Trust Bank exited vehicle financing following regulatory changes, and Greggs warned of lower annual profits due to reduced footfall from extreme heat. 

Top Market Movers: Among top gainers on FTSE 100 index, BP PLC (LSE: BP.) witnessed a rise of 3.51% followed by Glencore PLC (LSE: GLEN) which gained around 3.43%. 

Commodity Update: On Wednesday, the U.S. dollar hovered near its lowest level since February 2022, weighed down by dovish signals from Federal Reserve Chair Jerome Powell and concerns about former President Donald Trump’s spending bill. Gold fell 0.15% to $3,344.70, silver edged down 0.06% to $36.02, copper rose 0.30% to $9,963.35, and Brent crude increased 0.08% to $67.18 ahead of a key producers' meeting on August output. 

Our Stance: A flurry of U.S. political and economic developments is shaping market sentiment as President Trump's sweeping tax-cut and spending bill stirs deep divisions within the Republican Party, risking delays in the House despite narrowly clearing the Senate. Meanwhile, top U.S. banks, including JPMorgan, boosted dividends and announced major buyback programs after passing the Fed’s stress tests, reinforcing market confidence in financial sector stability. On the trade front, investor optimism remains tempered as Trump signals no extension to the July 9 tariff deadline and casts doubt on deals with key partners. 

FTSE 100 

The FTSE 100 edged up 0.32% to trade at 8,813.01, approaching a key resistance area while hovering around its 21-day Simple Moving Average, indicating an indecisive short-term trend. However, the index continues to hold above its 50-day SMA, reinforcing the broader bullish structure. The Relative Strength Index at 56.36 signals moderate momentum, pointing to potential consolidation in the near term. Strong support at 8,600 remains intact, which may encourage renewed buying interest if stability persists. Market sentiment stays cautiously optimistic, influenced by ongoing sector rotation and evolving macroeconomic developments shaping investor strategies. 

FTSE 100 Technical Chart, Source - EODHD/Others