Image Souce: Krish Capital Pty Ltd

Index Update: The FTSE 100 index, a key benchmark index for the London Stock Exchange, was flat around 0.11% on 05 December 2024. Technology, Consumer Non-Cyclicals& Financials demonstrated substantial growth. Moreover, the Real Estate and Energy sector faced a significant decline. 

Macro Update:  Britain approved Vodafone's $19 billion merger with Hutchison's Three UK, creating the largest mobile operator in the country after investment promises in 5G networks and customer protections outweighed concerns about rising bills. Meanwhile, the UK's construction industry saw growth in November, driven by commercial and civil engineering projects, though residential housebuilding remained weak due to high interest rates. Businesses, including retailer Frasers, expressed concerns over increased costs from higher social security contributions and minimum wage hikes, with the British Chambers of Commerce warning that these challenges could impact investment and trade in 2025. 

Top Market Movers: Among top gainers on FTSE 100 index, ADMIRAL GROUP PLC (LSE: ADM) witnessed a rise of 2.67% followed by WHITEBREAD PLC (LSE: WTB) which gained around 2.2%. 

Commodity Update: Commodity Update: The euro edged up against the U.S. dollar on Wednesday but retreated from session highs after the French government faced a no-confidence vote, signalling potential collapse. Meanwhile, U.S. Federal Reserve Chair Jerome Powell stated that the economy is stronger than expected in September, signalling support for a slower pace of interest-rate cuts. In commodities, gold slipped 0.18% to $2,671.60, silver fell 0.42% to $31.77, and copper decreased 0.20% to $9,087.50. Brent crude rose 0.20% to $72.43 per barrel, with investors awaiting OPEC+ decisions on supply cuts and monitoring Middle East tensions. 

Our Stance: Bitcoin surpassed $100,000 for the first time, marking a significant milestone for digital assets as investors anticipate favorable policies under the incoming U.S. administration, solidifying cryptocurrency's role in financial markets. Meanwhile, the proposed trade tariffs by U.S. President-elect Donald Trump, coupled with global tensions and Brexit-related trade barriers, are expected to strain international trade. In Europe, political instability emerged as France’s government collapsed, prompting a drop in the French-German bond yield spread. In the U.S., record highs in major stock indexes were fueled by strong technology earnings and Federal Reserve Chair Jerome Powell's comments suggesting caution in further interest rate cuts due to a stronger-than-expected economy. 

FTSE 100 

The FTSE 100 closed at 8,335.81, down 0.28%, forming a bearish candlestick pattern that may indicate a shift in investor sentiment. Despite this, the index remains above its 21-period and 50-period Simple Moving Averages (SMAs), which continue to act as important support levels, suggesting that the potential for further upward movement still exists. The Relative Strength Index (RSI) is at 62.41, indicating that while bullish momentum persists, there is still room for additional gains without the market being considered overbought. On the weekly chart, the FTSE 100 ended at 8,287.30, up 0.31%, after bouncing from the 21-period SMA at 8,241.06, reinforcing the positive outlook. Immediate resistance is at 8,400, and a breakout above this level could drive further bullish momentum. However, if the index falls below 8,020, downside risks and consolidation may follow. Investors should keep a close eye on these key levels for market direction. 

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