Trade Hopes Buoy Sentiment Amid Global and UK Economic Strains:

Image Source : Krish Capital Pty Ltd

Index Update: The FTSE 100 index, a key benchmark index for the London stock exchange, went down around 0.62% on 07 May 2025.

Macro Update:  The U.S. and UK have made progress on a potential trade deal involving lower steel and auto tariffs, though its timing remains uncertain amid mixed signals from U.S. officials. Meanwhile, Britain and India finalized a long-awaited free trade agreement aiming to boost bilateral trade by £25.5 billion ($34 billion) by 2040. In other developments, UK construction activity contracted for a fourth straight month in April, with the PMI at 46.6, reflecting ongoing economic strain. On the corporate front, DoorDash announced acquisitions of Deliveroo for £2.9 billion and SevenRooms for $1.2 billion, while BAE Systems reaffirmed its 2025 earnings growth forecast of 8–10%, citing strong defence demand. Pub chain J D Wetherspoon posted a 5.6% rise in Q3 like-for-like sales but withheld full-year guidance due to inflationary and economic pressures.

Top Market Movers: Among top gainers on FTSE 100 index, Entain PLC (LSE: ENT) witnessed a rise of 1.48% followed by Diageo PLC (LSE: DGE) which gained around 1.26%.

Commodity Update: The dollar held steady ahead of the Federal Reserve's policy meeting, with Chair Jerome Powell expected to call for more data before any decision. Asian investors continued pulling out U.S. assets, while upcoming U.S.-China trade talks calmed market fears. Gold slipped 0.68% to $3,399.60, silver fell 0.35%, and copper dropped 0.73%. Brent crude rose 0.60% to $60.52 on signs of weaker U.S. output and stronger global demand.

Our Stance: Global markets reflected cautious optimism on Wednesday as U.S. stock futures and Chinese equities gained following news of an upcoming meeting between U.S. and Chinese trade officials, which is being viewed as a step toward tariff de-escalation. China’s interest rate cut and pledge to support markets further lifted sentiment. However, European markets declined amid mixed earnings reports and uncertainty ahead of the Federal Reserve’s rate decision, with the STOXX 600 down 0.4% and healthcare stocks leading losses. Meanwhile, oil prices rebounded slightly from recent four-year lows, supported by optimism around U.S.-China trade talks and signs of easing U.S. production despite lingering oversupply concerns.

FTSE 100

The FTSE 100 is currently trading near 8,564.79, down 0.38% on the day, yet holding firmly above a key support zone. Despite a recent bearish candlestick pattern, its position above support suggests the potential for a bullish reversal. The 14-period RSI has climbed to 58.87, indicating improving market sentiment. The index also remains above its 50-period Simple Moving Average, reinforcing ongoing bullish momentum. While the technical outlook remains mixed, a strong breakout above nearby resistance would be needed to confirm a short-term uptrend as the session progresses.​

FTSE 100 Technical Chart, Source - EODHD/Others