Tariff Tensions and Rate Cut Hopes Shape UK and Global Market Sentiment:

Image Source : Krish Capital Pty Ltd

Index Update: The FTSE 100 index, a key benchmark index for the London stock exchange, went down around 0.67% on 07 August 2025.  

Macro Update: The Bank of England is expected to cut interest rates to 4%, marking its fifth cut in a year, though internal divisions over inflation cloud the outlook. UK house prices rose 0.4% in July, the strongest in six months, suggesting stabilisation post-tax break expiry. The FTSE 100 slipped 0.2%, weighed down by weak earnings in the defence sector. Standard Chartered signed a five-year carbon credit deal with Brazil’s Acre state, aiming to boost confidence in voluntary carbon markets. Harbour Energy raised its 2025 free cash flow forecast to $1bn after integrating Wintershall Dea assets. Meanwhile, Morgan Advanced Materials plunged 25% after forecasting lower-end profit guidance amid chip sector pressures. 

Top Market Movers: Among top gainers on FTSE 100 index, Intercontinental Hotels Group PLC (LSE: IHG) witnessed a rise of 7.54% followed by Halma PLC (LSE: HLMA) which gained around 2.41%. 

Commodity Update: The dollar remained rangebound on Wednesday as investors awaited U.S. President Donald Trump's nominee for the Federal Reserve Board. Gold dipped 0.09% to $3,431.60, while silver inched up 0.02% to $37.83. Copper rose 0.17% to $9,660.80. Brent crude rebounded 0.40% to $66.93 from a five-week low, supported by concerns over supply disruptions following Trump’s tariff threats on India for its Russian oil imports. 

Our Stance: Global markets are digesting a wave of geopolitical and economic shifts, with President Trump’s tariff hikes raising U.S. import duties to century highs, drawing pushback from India, Brazil, and others. A 100% chip import tariff—excluding firms manufacturing in the U.S.—aligns with Trump’s push to reshore production, backed by Apple’s $100bn domestic pledge. A Trump-Putin summit is also in the works, as the U.S. warns of further sanctions over Ukraine. Meanwhile, Fed officials signal concern over a slowing economy and hint at possible rate cuts. Despite tensions, global equities rose on tech gains, earnings optimism, and easing hopes, though the FTSE 100 lagged. 

FTSE 100 

The FTSE 100 is trading at 9,131.42, down 0.36%, facing repeated resistance on the upside. However, it remains above the 21-day and 50-day Simple Moving Averages, indicating a stable short-term uptrend. The 14-day RSI stands at 62.51, but is showing signs of waning momentum, suggesting that the recent rally may be losing steam. A brief pullback toward the 8,900 level is possible in the near term. Still, the overall technical structure remains positive, and if support levels hold, the index could resume its upward movement following a period of consolidation. 

FTSE 100 Technical Chart, Source - EODHD/Others