UK Markets Experiencing Slight Drop in Home prices:

Index Update: The FTSE 100 index, a key benchmark index for the London stock exchange, went up around 0.20% on 18 November 2024. Basic Materials, Financials & Technology sector demonstrated a substantial growth. Moreover, sectors such as Healthcare, Real Estate & Consumer Cyclicals faced a significant decline.

Macro Update:  Asking prices for British homes fell by 1.4% over the past month, exceeding the usual seasonal drop of 0.8%, but remained 1.2% higher than the previous year, according to Rightmove. The decline coincided with the Oct. 30 budget raising taxes on second homes and the Nov. 7 Bank of England interest rate cut. Rightmove expects a market upswing in 2025. Meanwhile, the UK government is reportedly in discussions with Turkey, Vietnam, and Kurdistan officials about payments to curb migration to Britain, with Prime Minister Keir Starmer emphasizing the need to deter risky Channel crossings. Separately, the UK Debt Management Office plans a gilt tender for under-five-year maturities on Nov. 21 to address unmet demand in its regular auctions and syndications.

Top Market Movers: Among top gainers on FTSE 100 index, Melrose Industries PLC (LSE: MRO) witnessed a rise of 6.27% followed by Vodafone Group PLC (LSE: VOD) which gained around 1.61%.

Commodity Update: The dollar strengthened against the yen on Monday after Japan's central bank hinted at potential policy tightening, though the timing remains uncertain. U.S. economic data is sparse this week. In commodities, gold rose 0.95% to $2,594.60, silver gained 0.83% to $30.69, and copper climbed 0.70% to $9,380 per ton. Brent crude edged up 0.3% to $71.24 amid the intensifying Russia-Ukraine conflict, though concerns over Chinese demand and a global oil surplus capped gains. Meanwhile, in a policy shift, the Biden administration has approved Ukraine’s use of U.S. weapons to strike deep within Russia, according to sources.

Our Stance: European shares dipped, with the STOXX 600 index down 0.2%, marking its first four-week losing streak in over two years, as real estate and technology stocks weighed on performance. Concerns stem from disappointing earnings, higher Treasury yields, and uncertainty surrounding U.S. President-elect Donald Trump's policies. Global markets await Nvidia's earnings this week, while the composition of Trump's financial leadership team remains uncertain. Global markets face mounting pressure from economic and political uncertainties, including inflation concerns and policy unpredictability tied to Trump's presidency. European equities' prolonged losses highlight investors' caution amidst weaker earnings and macroeconomic headwinds. U.S. markets, while still near record highs, may experience further volatility as optimism about pro-growth policies balances against inflation and Fed rate concerns. The upcoming Nvidia earnings report could offer a pivotal moment for technology stocks.

FTSE 100

The FTSE 100 closed at 8,063.61, edging down 0.09% and forming a bearish candlestick pattern, accompanied by rising volume, which suggests that investor sentiment remains cautious. Despite this, the index continues to trade below its 21-period Simple Moving Average (SMA), which is acting as a resistance level and limiting any immediate upside. The Relative Strength Index (RSI) stands at 39.14, nearing oversold territory, which could signal either further downside or a potential reversal if market conditions shift positively.
On the weekly chart, the 50-period SMA provides key support of around 8,032.00, a crucial level that could help stabilize the index. Immediate resistance is at 8,400, and a breakout above this level could trigger a more bullish trend. Conversely, a move below 8,020 would open the door to further declines, with the next significant support at 7,932. Investors should closely monitor these levels—resistance at 8,400 and support at 8,020—as they will be critical in determining whether the FTSE 100 enters a consolidation phase or faces additional weakness.