UK tax hikes loom, BoE cut odds up, tech selloff rattle markets:

Index Update: The FTSE 100 index, a key benchmark index for the London stock exchange, was trading up around 0.06% on 05 November 2025.  

Macro Update: Britain’s backdrop shows tentative momentum but rising pre-budget anxiety: the services PMI rose to 52.3 in October (from 50.8, above the 51.1 flash) with 12-month expectations at their highest since Oct-2024, even as Finance Minister Rachel Reeves prioritises growth ahead of possible Nov 26 tax rises. Policy debate includes a mooted 20% “settling-up” charge for wealthy leavers, and wealth managers report increased pre-budget pension withdrawals (Arbuthnot Latham says volumes are up 300% year-to-date vs 2024). Marks & Spencer guides second-half profit at least in line and expects to fully recover from April’s cyberattack by March. Sterling is steady near $1.3049 but close to multi-month lows versus the dollar and its weakest in over two years against the euro, with markets pricing roughly a one-in-three chance of a 25 bp BoE cut; median pay awards held at 3% (public sector 4%), highlighting uneven pay dynamics. 

Top Market Movers: Among top gainers on FTSE 100 index, Burberry Group PLC (LSE: BRBY) witnessed a rise of 2.68% followed by Marks & Spencer Group PLC (LSE: MKS) which gained around 2.23%. 

Commodity Update: The U.S. dollar strengthened on Wednesday amid a tech-led selloff on Wall Street that spread to Asia and divisions within the Federal Reserve, lowering chances of a December rate cut. Gold edged up 0.05% to USD 3,962.20 per ounce, while silver dipped 0.02% to USD 47.28, and copper rose 0.05% to USD 10,661. Brent crude fell 0.56% to USD 64.08 on demand concerns and rising U.S. inventories. 

Our Stance: Markets are wobbling as a binary Tesla catalyst collides with stretched valuations: shareholders are weighing an outsized Musk stock award—pitched as key to an $8.5T long-term vision—against the risk he walks, while big banks warn of a potential drawdown after AI-fuelled highs. The selloff is concentrated in mega-cap tech and semis (Philadelphia SOX down 4%), spilling from Wall Street into Asia and Europe, lifting volatility and nudging investors toward bonds and gold; euro-area yields eased alongside Treasuries. Brokers frame the retreat as positioning-led rather than a broken AI thesis, but near-term sentiment looks fragile, with Tesla’s vote and data-light macro still capable of amplifying swings.  

FTSE 100 

The FTSE 100 declined 13.69 points to trade at 9,701.27 but remains well above key support at 8,900. The index continues to hold comfortably above the 21-day SMA at 9,565.15 and the 50-day SMA at 9,395.24, reflecting a stable technical setup with scope for near-term consolidation. The RSI, positioned below the overbought zone yet within bullish territory, signals a mildly positive bias. Immediate support is seen near 8,950, while resistance is placed at 9,800 and 10,000. 

Source - EODHD/Others