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Index Update: The FTSE 100 index, a key benchmark index for the London stock exchange, went down around 0.33% on 16 December 2024. Utilities, Real Estate, & Consumer Cyclicals sector faced a significant decline. Sectors such as Financials, HealthCare and Industrials witnessed a substantial rise. 

Macro Update:  UK consumer confidence continued to weaken in December, with the S&P Global Consumer Sentiment Index dropping to 46.6 from 46.9 in November. The spending sentiment index also saw a contraction, falling to 39.7 from 40.4. This decline in sentiment reflects ongoing concerns over the high cost of living, which has led to reduced disposable income and increased reliance on savings and borrowing to maintain living standards. Despite these challenges, there was a slight improvement in the labour market sentiment index, which rose to a five-month high of 54.4 from 53.9. However, the overall financial outlook remains bleak, with households facing mounting debt and increased financial strain. 

Top Market Movers: Among top gainers on FTSE 100 index, Bunzl PLC (LSE: BNZL) witnessed a rise of 1.48% followed by 3I Group PLC (LSE: III) which gained around 1.34%. 

Commodity Update: The U.S. dollar remained near a three-week high against major currencies on Monday, amid expectations that the Federal Reserve will cut interest rates this week but signal a gradual easing pace for 2025. Bitcoin surged past $105,000 for the first time, fueled by reports that President-elect Donald Trump may proceed with a strategic Bitcoin reserve. In commodities, gold slipped 0.15% to $2,671.70 per ounce, silver gained 0.05% to $31.04 per ounce, and copper fell 0.15% to $9,048.50 per ton. Oil prices were subdued, with Brent crude down 0.30% to $74.28, as markets awaited the Federal Reserve's policy decision and assessed Chinese economic data. 

Our Stance: Ahead of the Bank of England's (BoE) rate decision on Thursday, there is little expectation of an immediate rate cut, with markets instead pricing in a 76% chance of a cut in February. While the BoE has signaled plans for gradual rate reductions, weak economic and confidence data suggests they may accelerate these cuts in the coming months. Analysts expect three cuts, but some anticipate a faster pace due to the worsening economic conditions. If the BoE expresses concern over the growth outlook during this week's meeting, it could significantly impact financial markets, even without an immediate rate reduction. Additionally, a recent survey revealed that the UK saw its steepest decline in private sector employment in nearly four years in December, despite a slight improvement in output. 

FTSE 100 

The FTSE 100 closed at 8,300.33, down 0.14%, despite a bearish candlestick pattern, indicating positive investor sentiment. The index remains above the 21-period and 50-period Simple Moving Averages (SMAs), which provide strong support and suggest the potential for further gains. The Relative Strength Index (RSI) stands at 54.68, indicating sustained bullish momentum and the possibility of continued upward movement. On the weekly chart, the index fell by 0.10%, closing at 8,300.33, still above the 50-period SMA at 8,047.08, with additional support at 7,932. Immediate resistance is at 8,400, and a breakout above this level could signal a bullish shift. Conversely, a drop below 8,020 could point to downside risk. Investors should closely monitor these key levels for potential consolidation or further upward movement. The index is in a range-bound phase, with a focus on breaking above resistance or testing support. 

  

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