UK retail rebound lifts sentiment, global markets cautious on fiscal risks:

Image Source : Krish Capital Pty Ltd

Index Update: The FTSE 100 index, a key benchmark index for the London stock exchange, went up around 0.36% on 23 May 2025.

Macro Update: British retail sales surged by 1.2% in April, far exceeding expectations, aided by sunny weather, lifting consumer sentiment despite broader economic concerns. Households are also set to benefit from a 7% energy price cap cut starting July, offering some relief amid inflationary pressures. Meanwhile, the G7 reaffirmed unity on tackling global imbalances and potential Russian sanctions despite internal disagreements. In energy, Shell anticipates rising LNG demand as key exporters may become net importers. The pound hit a three-year high, supported by upbeat retail data and U.S. fiscal worries, though UK equities fell amid concerns over domestic budget deficits and global risk sentiment.

Top Market Movers: Among top gainers on FTSE 100 index, EasyJet PLC (LSE: EZJ) witnessed a rise of 4.15% followed by Anglo American PLC (LSE: AAL) which gained around 3.54%.

Commodity Update: The U.S. dollar softened on Friday, heading for its first weekly decline in five weeks against the euro and yen, as concerns over America’s $36 trillion debt and a costly tax bill dampened sentiment. Moody’s recent downgrade of U.S. debt spurred safe-haven buying. Gold dipped 0.08% to $3,291.80, silver slipped 0.05%, while copper rose 0.12%. Brent crude dropped 0.50% to $64.11 on renewed OPEC+ oversupply concerns.

Our Stance: Global markets reflected mixed sentiment on Friday as concerns over U.S. fiscal health weighed on investor confidence. U.S. stock futures remained muted following the House approval of President Trump’s expansive tax and spending bill, which is expected to significantly swell national debt. This fiscal uncertainty weakened the U.S. dollar, enabling emerging market currencies to extend their gains for a sixth straight week. Meanwhile, European equities rose modestly, supported by easing bond yields and stronger-than-expected German GDP data. Oil prices continued to slide for the fourth session amid expectations of a July output hike by OPEC+, leading to the first weekly decline in three weeks.

FTSE 100: The FTSE 100 increased 0.12% to trade near 8,751.44, maintaining a bullish bias amid resilient market sentiment. The index holds above its 50-period Simple Moving Average, indicating a strong underlying trend. However, a recent bearish candlestick signals waning buying momentum, and the 14-period RSI has eased to 65.14 from overbought levels, pointing to potential exhaustion. While this suggests a slowing pace, the broader technical outlook remains positive as long as key support levels hold. A breakout above immediate resistance could reignite upward momentum, though caution is advised if signs of weakening persist in the short term.​

FTSE 100 Technical Chart, Source - EODHD/Others