Trade relief lifts markets, but investor caution lingers:

Image Source : Krish Capital Pty Ltd

Index Update: The FTSE 100 index, a key benchmark index for the London stock exchange, went down around 0.20% on 28 July 2025.  

Macro Update: U.S. President Donald Trump will host UK Prime Minister Keir Starmer in Scotland to discuss trade ties and the Gaza crisis, following Trump’s announcement of a major U.S.-EU trade deal. Starmer is also set to reconvene his cabinet amid pressure to recognise a Palestinian state, a move he insists must follow a negotiated peace. UK retail sales continued to decline in July for the tenth month, though at a slower pace, as inflation and uncertainty weighed on demand. Oxford Biomedica expects a 40% rise in H1 sales on strong order growth, while GSK signed a $500 million deal with China’s Hengrui to develop 12 new medicines. Despite a small Friday dip, the FTSE 100 posted its fifth straight weekly gain, supported by positive earnings and rate cut hopes. 

Top Market Movers: Among top gainers on FTSE 100 index, Rightmove PLC (LSE: RMV) witnessed a rise of 1.72% followed by BP PLC (LSE: BP.) which gained around 1.61%. 

Commodity Update: The euro strengthened on Monday following a trade agreement between the U.S. and the EU, reducing tariffs to 15% from a threatened 30%. The deal, announced by President Trump and European Commission President Ursula von der Leyen in Scotland, aims to prevent a global trade war. Gold rose 0.03% to $3,393.55, silver surged 0.20% to $38.44, copper gained 0.28% to $9,814.50, and Brent crude increased 0.32% to $68.66. 

Our Stance: The U.S.-EU trade deal, which imposes a reduced 15% tariff and includes up to $750 billion in EU investments, marks a notable easing of global trade tensions and follows a similar agreement with Japan. Markets responded with cautious optimism, reflected in modest gains in European stocks and oil prices. However, the Fed is expected to hold rates steady amid concerns that tariffs could hinder inflation progress. Meanwhile, high equity valuations and persistent bond yields have led hedge funds to reduce tech exposure, raising questions about the sustainability of market highs without a drop in long-term rates. 

FTSE 100 

The FTSE 100 is currently trading at 9,129.95, up 0.10%, maintaining its position above a crucial breakout level that now serves as strong support. The index remains comfortably above both the 21-day and 50-day Simple Moving Averages, indicating a steady and positive short-term trend. The Relative Strength Index (RSI) stands at 72.44, reflecting robust momentum, although some near-term consolidation could take place. A potential pullback toward the 8,700 level might occur as part of a normal market correction. Overall, the FTSE 100's technical outlook remains stable, suggesting the current bullish trend could continue further. 

FTSE 100 Technical Chart, Source - EODHD/Others