Image Souce: Krish Capital Pty Ltd

Index Update: The FTSE 100 index, a key benchmark index for the London stock exchange, went up around 0.12% on 13 December 2024. Basic Materials, Real Estate, & HealthCare sector faced a significant decline. Sectors such as Financials, Energy and Technology witnessed a substantial rise. 

Macro Update:  Britain's economy contracted by 0.1% in October, matching September's decline, marking the first consecutive monthly GDP drops since the pandemic lockdown in 2020, according to the Office for National Statistics. This underperformed economists' forecasts of a 0.1% growth. In parallel, the government unveiled a clean energy initiative to accelerate renewable energy projects, supporting its goal to decarbonize the power sector by 2030. Ofcom fined Royal Mail £10.5 million for failing to meet delivery targets for the second consecutive year, citing the need for faster improvements. Additionally, Kosmos Energy confirmed early discussions for a potential all-share acquisition of Tullow Oil, though no formal offers have been made. 

Top Market Movers: Among top gainers on FTSE 100 index, Rentokil Initial PLC (LSE: RTO) witnessed a rise of 3.74% followed by Diageo PLC (LSE: DGE) which gained around 1.99%. 

Commodity Update: The dollar rose to a 2.5-week high on Friday, set for its best week in a month, amid expectations the Federal Reserve will cut interest rates next week but take a patient approach to further reductions. Soft U.S. producer price data, despite a high headline figure, reinforced bets for a rate cut on December 18, while rising unemployment claims indicated a cooling job market. In commodities, gold fell 0.02% to $2,708.80, silver dropped 0.42% to $31.42, and copper gained 0.12% to $9,096.50. Oil prices were subdued, with Brent crude edging down 0.01% to $73.34 per barrel, driven by expectations of a supply surplus in 2025. However, losses were capped by optimism surrounding fresh stimulus measures from China to boost its sluggish economy. 

Our Stance: Global markets faced mixed sentiment this week, reflecting concerns about economic growth and monetary policy. European stocks declined, ending a three-week winning streak, as investors sought clarity on eurozone monetary easing amidst fears of a trade war and slowing growth. In Asia, shares fell due to a stronger dollar and rising U.S. Treasury yields, driven by reduced expectations for rate cuts in 2025. Beijing’s pledges to boost debt and consumption failed to lift Chinese equity markets, amid heightened trade tension concerns with the U.S. The dollar surged to a 2.5-week high, supported by expectations of a cautious Federal Reserve approach to future rate cuts, as well as recent rate cuts by the ECB and Swiss central bank. Wall Street saw losses after a Labor Department report showed higher-than-expected U.S. producer prices, while rising unemployment claims raised concerns over labor market resilience. The overall sentiment reflects investor caution ahead of key central bank decisions. 

FTSE 100 

The FTSE 100 closed at 8,311.76, rising 0.12%, with a bullish candlestick pattern reflecting positive investor sentiment. The index is trading above both the 21-period and 50-period Simple Moving Averages (SMAs), which now act as strong support, suggesting potential for further gains. The Relative Strength Index (RSI) at 56.1 indicates sustained bullish momentum, supporting the likelihood of continued upward movement. On the weekly chart, the index closed at 8,308.61, up 0.21%, above the 50-period SMA at 8,047.08, with additional support at 7,932. Immediate resistance is at 8,400, with a breakout above signaling a bullish shift. A drop below 8,020 could indicate downside risk. Investors should monitor these key levels for potential consolidation or further upward movement. 

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