UK Housing Cools, Markets Plunge Amid Global Trade Turmoil and Rate Cut Bets:

Image Source : Krish Capital Pty Ltd

Index Update: The FTSE 100 index, a key benchmark index for the London stock exchange, went down around 3.80% on 07 April 2025.  

Macro Update:  British house prices unexpectedly fell by 0.5% in March, according to Halifax, reflecting a cooling housing market after a rush to buy ahead of a tax break expiry. Investors ramped up bets on Bank of England rate cuts, now anticipating around 88 basis points of reductions by year-end, following U.S. President Trump’s firm stance on maintaining tariffs. This sparked a sharp fall in short-dated gilt yields. In response to the 25% U.S. tariff on car imports, the UK government eased electric vehicle production targets to relieve pressure on automakers, though the sector called for stronger protective measures. The Hartlepool nuclear station was moved into enhanced regulatory oversight due to safety concerns, though it remains operational. Meanwhile, rising global trade tensions led to a significant sell-off in UK equities, with the FTSE 100 plunging nearly 5%. 

Top Market Movers: Among top gainers on FTSE 100 index, Entain PLC (LSE: ENT) witnessed a rise of 2.68% followed by Fresnillo PLC (LSE: FRES) which gained around 2.55%. 

Commodity Update: On Monday, the yen and Swiss franc strengthened as investors fled to safe havens, while the risk-sensitive Australian dollar tumbled amid escalating trade tensions. U.S. President Donald Trump’s expanded tariffs deepened fears of a global recession. Commodities responded with gold rising 0.32% to $3,045.35, silver up 3.32% to $30.20, and copper gaining 2.17% to $8,940.00. Brent crude fell 2.63% to $63.93 as China and the EU signalled retaliation, intensifying global trade war concerns. 

Our Stance: Global markets are reeling under intense pressure as recession fears intensify, triggered by U.S. President Donald Trump’s unwavering stance on trade tariffs and lack of urgency to support financial markets. Futures tied to the S&P 500 dropped over 20% from their peak, pointing toward a confirmed bear market, while European shares tumbled to 16-month lows. Investors are flocking to safe havens, driving 10-year U.S. Treasury yields down to 3.953%, and gold prices remain steady, supported by strong central bank demand and expectations of a potential fifth Fed rate cut this year. The coordinated global selloff underscores heightened fears of an economic downturn amid escalating trade tensions and policy uncertainty. 

FTSE 100 

The FTSE 100 traded at 7,648.610 on Monday, down 5.05%, forming a bearish candlestick pattern and staying below a key horizontal resistance level—signalling sustained bearish momentum. The index continues to trade under its 21-period and 50-period Simple Moving Averages, reinforcing downside pressure amid ongoing market uncertainty. The current setup reflects cautious investor sentiment, with further movement needed to confirm a clear trend. A breakdown below crucial support could open the door to additional losses. The Relative Strength Index (RSI) at 14.30 indicates moderate bearish momentum, suggesting further weakness is possible. Traders should closely watch support zones in the coming sessions. 

Data Source - EODHD/Others