Image Souce: Krish Capital Pty Ltd

Index Update: The FTSE 100 index, a key benchmark index for the London stock exchange, went down around 0.53% on 31 October 2024. HealthCare, Industrials & Technology sector demonstrated a substantial decline. Moreover, sectors such as Real Estate, & Utilities sector faced a significant growth. 

Macro Update:  Shell’s Q3 profit reached $6 billion, beating forecasts by 12%, thanks to strong gas sales that offset weaker oil trading and refining. Adjusted earnings fell 4% from the previous quarter but still exceeded analyst expectations of $5.36 billion. Shell announced a $3.5 billion share buyback for the next quarter and kept its dividend at 34 cents per share. In the UK, Finance Minister Rachel Reeves unveiled the largest tax increases in 30 years, targeting businesses and the wealthy to fund public services. The budget, while expected to bolster the economy short-term, may elevate inflation, potentially limiting Bank of England rate cuts. Mid-cap stocks in the UK showed resilience, rising amid relief that the new tax measures were less punitive than anticipated. 

Top Market Movers: Among top gainers on FTSE 100 index, Coca Cola HBG AG (LSE: CCH) witnessed a rise of 2.32% followed by Shell PLC (LSE: SHEL) which gained around 1.04%. 

Commodity Update: On Thursday, the yen faced pressure as the Bank of Japan maintained ultra-low interest rates. Meanwhile, the U.S. dollar consolidated ahead of key jobs data and the upcoming presidential election on November 5. Gold prices soared to a record $2,797.80 per ounce, driven by heightened safe-haven demand amid rising political uncertainty in both the U.S. and Japan. Silver dipped 0.78% to $33.81, while copper edged up 0.09% to $9,572.00 per ton. Brent crude futures rose 0.5% to $72.90 a barrel, supported by optimism over U.S. fuel demand and OPEC+ considering delaying a planned output increase. 

Our Stance: Asian stock markets fell on Thursday, led by declines in chip stocks, following a similar downturn in U.S. tech shares after Meta and Microsoft reported rising AI-related costs. This dampened investor sentiment, particularly as Amazon and Apple’s earnings loom. Meanwhile, the yen strengthened after the Bank of Japan’s policy decision hinted at potential rate hikes, adding to uncertainty for global markets already facing volatility. Given these tech and currency shifts, investors remain cautious as broader economic conditions could impact market stability in the near term. 

FTSE 100 

The FTSE index closed at 8,159.63, reflecting a modest decline of 0.73%. A bearish candlestick pattern has developed, raising investor concerns, especially with increasing trading volume. Currently, the index is trading below the 21-period Simple Moving Average (SMA), which has become a resistance level. The Relative Strength Index (RSI) stands at 39.37, indicating some bearish momentum. On the weekly chart, the 50-period SMA presents a more positive long-term outlook, as the index remains above this key support level. Investors should focus on critical levels: resistance at 8,400 and support at 8,100. A breakout above 8,400 could boost market sentiment, while a fall below 8,100 may signal further declines. With the index trading within a tight range, any breakout—upward or downward—could significantly impact the market trend. Close attention to these pivotal levels will be crucial for anticipating potential shifts in the market. 

 

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