Image Source : Krish Capital Pty Ltd

Index Update: The FTSE 100 index, a key benchmark index for the London stock exchange, went up around 0.02% on 02 January 2025. Sectors such as Energy, Utilities and Basic Materials has witnessed a substantial increase. Moreover, Financials and Real Estate sector has faced a significant decline. 

Macro Update:  Lidl's UK division reported a 7% sales increase in the four weeks leading up to Christmas, driven by strong demand for holiday staples like turkey and pigs in blankets. Turnover exceeded £1 billion ($1.25 billion) for the first time in its 30-year UK history. Nationwide reported a 0.7% rise in house prices in December, surpassing expectations of 0.1%. Annual house price growth reached 4.7%, up from 3.7% in November, the highest yearly growth rate since late 2022. Rio Tinto disclosed that a crew member from its bulk carrier, RTM Zheng He, went missing last week en route from China to Western Australia. A search and rescue operation, led by the Philippine Coast Guard, remains ongoing. 

Top Market Movers: Among top gainers on FTSE 100 index, Fresnillo PLC (LSE: FRES) witnessed a rise of 2.42% followed by Centrica PLC (LSE: CNA’) which gained around 2.10%. 

Commodity Update: The U.S. dollar started 2025 strong, continuing its momentum from last year with gains against most currencies. The Japanese yen slipped to its lowest level in over five months amid expectations that U.S. interest rates may stay higher for longer. Market attention shifted to the incoming Trump administration, with policies anticipated to drive growth and inflation, supporting U.S. Treasury yields and dollar demand. In commodities, gold rose 0.17% to $2,645.60, silver gained 1.41% to $29.65, and copper climbed 0.99% to $8,896.50. Brent crude increased 0.60%, reaching $75.10 per barrel, as investors eyed potential recovery in China's economy and fuel demand. 

Our Stance: European stocks began 2025 on a positive note, with the STOXX 600 index rising 0.3%, rebounding from a significant quarterly drop last year amid concerns over high valuations and policies under the incoming U.S. President Donald Trump. However, Asian markets opened weak, reflecting cautious investor sentiment about Trump’s policies and a hawkish Federal Reserve.  The cautious optimism in European and oil markets contrasts with Asian equities' subdued performance, reflecting the uncertainty surrounding Trump’s administration and global economic policies. While South Korea’s proactive measures signal resilience, broader markets may remain volatile until clearer policy directions emerge in key economies like the U.S. and China. 

FTSE 100 

The FTSE 100 closed at 8,173.02 on Monday, marking a 0.64% gain, buoyed by a bullish candlestick pattern and strong support at 8,002.00. Despite the positive movement, the index remains below its 50-period Simple Moving Average (SMA), suggesting that downward pressure may persist in the short term. The Relative Strength Index (RSI) stands at 46.71, showing a recovery from oversold conditions, which indicates a bullish sentiment with a slight positive bias. On the weekly chart, the FTSE 100 gained 0.80%, closing at 8,149.78, just above the 50-period SMA at 8,117.48, offering some support. The critical support level to watch is 7,932, while immediate resistance is 8,400. A breakout above this resistance could signal a shift toward a more bullish trend. However, a drop below 8,020 may indicate further downside risks. Investors should monitor these key levels for clearer direction in the coming sessions. 

  A screenshot of a computer Description automatically generated

Data Source - EODHD/Others 

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