UK GDP Grew moderately by 0.1%:

Image Source : Krish Capital Pty Ltd

Index Update: The FTSE 100 index, a key benchmark index for the London stock exchange, went up around 0.66% on 16 January 2025. Basic Materials, Industrials & HealthCare sector has witnessed a substantial growth. Moreover, Real Estate, Consumer Cyclicals & Utilities sector has faced a significant decline. 

Macro Update:  Britain's economy showed modest growth in November, with GDP rising by 0.1%, marking the first monthly increase since August, though falling short of the expected 0.2% amidst recent tax hikes for businesses announced by finance minister Rachel Reeves. The housing market demonstrated resilience, as the Royal Institution of Chartered Surveyors reported an increase in its house price balance to +28% in December, the highest since September 2022, alongside a rise in sales and new buyer inquiries. On the international front, British Prime Minister Keir Starmer traveled to Ukraine to sign a security and trade pact, reinforcing support for President Volodymyr Zelenskiy as European leaders consider security guarantees amid concerns about U.S. political shifts. In the retail sector, Dunelm Group reported a 1.6% increase in Q2 sales, down from 3.5% in the prior quarter, highlighting the challenges of rising costs and muted consumer spending on the British retail landscape. 

Top Market Movers: Among top gainers on FTSE 100 index, Rightmove PLC (LSE: RMV) witnessed a rise of 3.89% followed by Antofagasta PLC (LSE: ANTO) which gained around 3.61%. 

Commodity Update: The U.S. dollar edged lower on Thursday, retreating from recent highs as U.S. inflation data eased, leading to a drop in bond yields. Meanwhile, the Japanese yen climbed to a one-month high amid growing expectations of a rate hike by the Bank of Japan next week. In commodities, gold rose by 0.30% to $2,726.80, while silver gained 0.33% to $31.63, and copper also increased by 0.33%, reaching $9,202.50. Brent crude advanced 0.4% to $82.33 per barrel, driven by a larger-than-expected decline in U.S. crude oil stockpiles and concerns over Russian energy sanctions. 

Our Stance: Global markets and political developments marked significant movements recently. President Joe Biden delivered his final Oval Office speech, emphasizing unity and cautioning against wealth concentration, as he aims to solidify his legacy amid concerns about Donald Trump's potential return. Meanwhile, European shares rallied, driven by strong performance in luxury stocks following Richemont's robust earnings and gains in semiconductor firms after record profits from Taiwan Semiconductor Manufacturing Co. Similarly, Chinese and Hong Kong markets edged higher, buoyed by optimism over potential easing measures from Beijing. In the U.S., stocks surged, with major indices posting their largest daily gains in over two months, spurred by cooler-than-expected core inflation data and solid earnings reports from leading banks. While energy costs pushed the consumer price index higher, underlying inflation pressures eased, signaling a more favorable outlook for investors. 

FTSE 100 

The FTSE 100 closed at 8,301.13 on Wednesday, up 1.21%, forming a bullish candlestick pattern with solid support at 8,002.00. The index is positioned above its 21-period Simple Moving Average (SMA), indicating potential for short-term upward momentum. Additionally, the 50-period SMA provides further support, boosting the likelihood of continued gains. The Relative Strength Index (RSI) stands at 56.89, signaling sustained bullish sentiment in the market. These technical indicators suggest that the FTSE 100 may continue its upward trajectory if it maintains support levels and remains above the key moving averages in the near term. On the weekly chart, the FTSE 100 rose 0.30%, staying above the 50-period SMA at 8,130.76. Key support lies at 7,932, with resistance at 8,400. A breakout above 8,400 could signal stronger bullish momentum, while a drop below 8,020 may indicate further downside. Monitoring these levels is essential for predicting future price movements. 

Data Source - EODHD/Others