Image Souce: Krish Capital Pty Ltd

Index Update: The FTSE 100 index, a key benchmark index for the London stock exchange, went down around 0.46% on 23 October 2024. Technology, Energy & Basic Materials sector demonstrated a substantial decline.

Macro Update:  Britain has initiated a major review of its water utility sector, addressing issues like under-investment and pollution, potentially abolishing its regulator. Jon Cunliffe will lead the review to strengthen regulation and investment. Additionally, the UK finance minister is expected to impose national insurance on employers' pension contributions in the October budget, mainly exempting public sector workers. Meanwhile, Trump's campaign accused Labour Party of illegal foreign interference in the U.S. election. Lastly, UK inflation fell to 1.7% in September, driven by volatile components.

Top Market Movers: Among top gainers on FTSE 100 index, WPP PLC (LSE: WPP) witnessed a rise of 4.58% followed by Reckitt Benckiser Group PLC (LSE: RKT) which gained around 3.17%.

Commodity Update: Gold prices reached a record high on Wednesday, while the dollar strengthened as investors remained cautious ahead of the contentious U.S. election. Uncertainty surrounding the Federal Reserve's plans for interest rate cuts weighed on risk sentiment. After peaking, gold slipped 0.25% to $2,753.00 per ounce, silver fell 0.83% to $34.75, and copper decreased 0.48% to $9,578.00 per ton. Brent crude futures dropped 0.4% to $75.75 a barrel, impacted by rising U.S. oil inventories, while U.S. diplomatic efforts in the Middle East continued to attract market focus.

Our Stance: European markets experienced volatility on Wednesday, with shares edging lower primarily due to declines in the mining sector and weak earnings from major companies like Deutsche Bank and L'Oreal. Deutsche Bank's disappointing earnings report weighed heavily on market sentiment, and the dip in miner stocks, including Anglo American and Glencore, added to the downward pressure. The U.S. dollar strengthened globally as expectations for aggressive rate cuts by the Federal Reserve softened, supported by rising Treasury yields. Despite this, MSCI's emerging markets stock index managed a slight 0.3% gain after two days of losses, buoyed by stronger performances in China and Hong Kong. In terms of market sentiment, there is growing caution ahead of the U.S. presidential election, as investors closely monitor Treasury yields and corporate earnings to gauge the health of the U.S. economy. The Federal Reserve's stance on monetary policy remains a key focus, with the potential for rate adjustments influencing global financial markets.

FTSE 100

On the daily chart, the FTSE index closed at 8,306.54, down 0.14%, forming a bearish candlestick pattern accompanied by increased trading volume, indicating a slight decline in investor confidence. Index Opening at 8,292.80, the index showed initial uncertainty. It remains above the 21-period Simple Moving Average (SMA), a crucial support level, and the 50-period SMA on the weekly chart suggests a generally positive long-term outlook. The Relative Strength Index (RSI) is 51.32, indicating modest bullish momentum. After recently testing the resistance level at 8,400, a breakout above this could boost market sentiment, while 8,100 serves as strong support. The index’s narrow range means any breakout could significantly influence the prevailing trend.

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