UK yields surge, sterling weakens; global debt worries lift gold to record highs:

Image Source : Krish Capital Pty Ltd

Index Update: The FTSE 100 index, a key benchmark index for the London stock exchange, went down around 0.50% on 02 September 2025.  

Macro Update: Britain’s 30-year borrowing costs surged to their highest since 1998 and sterling slid over 1%, reflecting investor concerns about fiscal stability, while a broad bond market selloff added pressure. In corporate updates, Shell announced a major maintenance shutdown at its 404,000 bpd Pernis refinery in Rotterdam from mid-September to November, potentially impacting European supply. Ithaca Energy shares tumbled nearly 17% after top shareholders Delek and Eni sold a 3% stake at a 10% discount, though the stock remains up about 90% this year amid acquisitions. Meanwhile, Shawbrook agreed to acquire specialist lender ThinCats, adding a £700mn loan book to strengthen its SME lending platform, with completion expected later in 2025 and private equity owners weighing a £2bn London IPO. 

Top Market Movers: Among top gainers on FTSE 100 index, Fresnillo PLC (LSE: FRES) witnessed a rise of 1.75% followed by Unilever PLC (LSE: ULVR) which gained around 1.23%. 

Commodity Update: The dollar weakened as traders reacted to President Trump’s escalating attacks on the Federal Reserve, including the dismissal of Governor Lisa Cook, stoking fears of eroded central bank independence. Gold up 0.56% at $3,565.65 and silver surging 2.44% to $41.715, while copper rose 0.36% to $9,927.15. Brent crude gained 0.45% to $68.46, with oil steady as markets balanced OPEC+ output growth against Russia-Ukraine supply risks. 

Our Stance: Global markets faced renewed turbulence on Tuesday as long-dated bond yields in the UK and France surged to their highest levels in over a decade (UK 30-year gilt at 5.697% and France’s at 4.513%), reflecting rising concerns over sovereign debt burdens. U.S. futures slipped ahead of the August nonfarm payrolls report, which will guide expectations for Fed rate cuts, while longer-dated Treasury yields also climbed, pressuring equities. Oil prices rose, with Brent up 1.6% to $69.27 and WTI 2.8% higher at $65.78, supported by Ukrainian strikes that disrupted Russian refining capacity, though demand worries linger. Emerging markets traded mixed, with Polish equities extending losses amid expected rate cuts, while gold surged past $3,500 per ounce to a record high, boosted by Fed easing expectations and safe-haven demand. 

FTSE 100 

The FTSE 100 advanced 0.36% on Tuesday to close at 9,172.32, forming a bullish candlestick pattern on the daily chart. The index continues to hold firmly above a key horizontal support level, underscoring strong underlying momentum. Technical signals remain constructive, with the price trading comfortably above the 50-period Simple Moving Average (SMA), which serves as a dynamic support zone and reflects sustained buying interest. The Relative Strength Index (RSI) at 52.05 signals strengthening momentum and suggests a potential shift toward deeper bullish sentiment. A decisive breakout above the immediate resistance zone would confirm the prevailing uptrend and open the path to higher targets. On the downside, maintaining support at current levels is critical to preserving the bullish structure, while a breakdown below the moving averages could trigger a short-term corrective phase.