Image Souce: Krish Capital Pty Ltd

Index Update: The FTSE 100 index, a key benchmark index for the London stock exchange, went up around 0.07% on 15 November 2024. Basic Materials, Financials & Energy sector demonstrated a substantial growth. Moreover, sectors such as Healthcare, Industrials & Technology faced a significant decline. 

Macro Update:  The UK economy contracted by 0.1% in September, driven by stagnation in the services sector and declines in manufacturing and construction. Q3 growth slowed to 0.1% from 0.5% in Q2, raising concerns about the economy’s resilience and posing challenges for finance minister Rachel Reeves’ plans to stimulate growth. Bank of England Governor Andrew Bailey stressed the importance of rebuilding EU trade ties and unlocking business capital to enhance investment and productivity. Ofgem approved a £2 billion energy project linking Scotland and England, supporting renewable energy goals and reducing reliance on volatile gas markets. Meanwhile, UK markets remained subdued, with AstraZeneca and GSK shares falling following vaccine-related comments from the U.S. administration. 

Top Market Movers: Among top gainers on FTSE 100 index, Land Securities Group PLC (LSE: LAND) witnessed a rise of 3.02% followed by EasyJet PLC (LSE: EZJ) which gained around 2.73%. 

Commodity Update: The U.S. dollar was poised for strong weekly gains on Friday, nearing one-year highs as hawkish remarks from Fed Chair Jerome Powell pushed short-term Treasury yields higher. Powell signalled that there’s no need to rush rate cuts, citing solid economic growth, a strong job market, and inflation still above the 2% target, which tempered expectations for a rate cut next month. In commodities, gold rose 0.06% to $2,574.30 per ounce, silver gained 0.13% to $30.61, and copper increased 0.44% to $9,071 per ton. Brent crude slipped 0.41% to $72.26, weighed down by oversupply and demand concerns. 

Our Stance: The U.S. dollar surged to near one-year highs this week after Federal Reserve Chair Jerome Powell's hawkish comments signaled a cautious approach to rate cuts, citing steady economic growth and inflation above target, which pushed Treasury yields higher and equities lower. Asian markets found some stability on stronger-than-expected Chinese retail sales data, though broader economic indicators underwhelmed. U.S. stock futures fell, and oil prices declined amid concerns about weaker Chinese demand and limited Federal Reserve rate cuts, with Brent crude dropping to $71.59 per barrel and WTI to $67.76. This highlights ongoing market volatility fueled by central bank policy and global economic uncertainties. 

FTSE 100 

The FTSE 100 closed at 8,071.19, up 0.51%, forming a bullish candlestick pattern with rising volume, suggesting cautious optimism among investors. However, the index remains below its 21-period Simple Moving Average (SMA), acting as resistance and limiting short-term upside potential. The Relative Strength Index (RSI) at 39.71 signals that the index is approaching oversold territory, indicating the possibility of further downside or a reversal if market conditions improve. 

On the weekly chart, the 50-period SMA provides support near 8,020, a critical level for stabilization. Immediate resistance is at 8,400, and a breakout above this level could signal a bullish shift. Alternatively, a drop below 8,020 may trigger further declines, possibly testing support at 7,932. Key levels to watch: resistance at 8,400 and support at 8,020. These will be pivotal in determining whether the FTSE 100 consolidates or faces further weakness. 

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