Image Source : Krish Capital Pty Ltd

Index Update: The FTSE 100 index, a key benchmark index for the London stock exchange, went down around 0.40% on 30 December 2024. Sectors such as Industrials, Technology and Basic Materials has witnessed a substantial decrease. 

Macro Update:  The retail industry has seen a sharp rise in job losses, with a total of 169,395 retail positions eliminated in 2024, marking a 42% increase from the previous year. This is the worst year for retail job cuts since 2020, according to a report by the Centre for Retail Research (CRR) and Altus Group. A significant portion of these job losses—about one-third—was attributed to company closures and administrations, including well-known names like Carpetright, Body Shop, Homebase, Lloyds Pharmacy, and Ted Baker. The outlook for 2025 remains bleak, as recent Budget changes, including tax and wage adjustments and less favorable business rate discounts, are expected to continue putting pressure on high street retailers. 

Top Market Movers: Among top gainers on FTSE 100 index, Airtel Africa PLC (LSE: AAF) witnessed a rise of 1.51% followed by Entain PLC (LSE: ENT) which gained around 0.51%. 

Commodity Update: The U.S. Dollar Index edged higher in Asian trade, nearing a two-year high from last week, as Asian currencies weakened amid the Federal Reserve's outlook for fewer rate cuts in 2025. The Iranian rial hit a record low against the U.S. dollar, declining 18% since Trump’s election, as citizens sought refuge in foreign currencies, gold, and cryptocurrencies. In commodities, gold rose 0.18% to $2,636.99, silver gained 0.05% to $29.983, and copper edged up 0.04% to $8,998.50. Brent crude increased 0.03% to $73.81 per barrel, though oil prices softened in thin holiday trading as markets awaited key economic data from China and the U.S. later this week to gauge demand in the world’s largest oil-consuming nations. 

Our Stance: As the year draws to a close, market sentiment remains mixed, with a slight gain in the FTSE 100 last week contrasted by a sharp decline in US stocks, particularly in tech sectors. Analysts, including Kyle Rodda from Capital.com, suggest that the optimism seen earlier in the year may be waning due to concerns about overvaluations and stretched market positioning, despite a strong economic outlook for 2025. The pullback in US equities was linked to rising bond yields and fears of a re-rating in bonds reflecting stronger economic growth. Looking ahead, the global market will closely monitor Chinese PMI data and US ISM reports, as these could introduce volatility amid ongoing concerns about balancing growth and inflation risks. Additionally, low trading volumes during the holiday season could amplify price fluctuations across financial markets. 

FTSE 100 

The technical setup for the FTSE 100 shows that it is trading within a consolidation phase, with key support around the 8,100 level. If the index fails to hold this support, the next potential downside target could be closer to 8,000, a psychological level that has held previously. On the upside, resistance is seen at 8,200, with a breakout above that level needed to confirm any potential bullish momentum going into the new year. However, with ongoing market rebalancing and a backdrop of low liquidity, volatility could pick up, especially given the end-of-year flows and key economic data releases in the coming days, such as the US ISM and Chinese PMI data. As such, traders are advised to stay cautious and watch for any significant breaks in price action for clearer directional signals. 

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Data Source - EODHD/Others 

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