London's major indexes plummeted on Thursday as escalating tensions in the Middle East dampened risk appetite. Adding to investor concerns, the Bank of England opted to keep the Bank Rate unchanged at 3.75% during its March policy meeting, a move that aligned with market and analyst expectations. This decision marked a sharp departure from just weeks earlier when a 25 basis point rate cut seemed almost certain. However, the ongoing turmoil in the Middle East has reshaped the economic outlook, with surging energy prices poised to unleash a new wave of inflationary pressure on the UK economy. Amid the heightened uncertainty surrounding the conflict's duration and economic impact, all nine members of the Monetary Policy Committee (MPC) unanimously agreed to maintain the current rate. In a noteworthy shift, the MPC omitted any reference to potential rate cuts from its meeting minutes, signaling a significant change in its stance. Instead, the committee highlighted its commitment to tackling inflation, suggesting that rate hikes could be on the horizon later this year as conditions evolve. This decision reflects growing concerns over inflationary risks and underscores the need for a more cautious and measured approach in navigating global economic challenges.
The energy sector surged by 0.9% to reach a record high, driven by a sharp spike in oil prices following heightened tensions in the Middle East. Iran launched attacks on regional energy facilities in retaliation for Israel's strike on its critical South Pars gas field. Meanwhile, other major sectors faced significant challenges, with metal miners plunging 7.2% and banks dropping 3.7%, marking them as the day's worst performers. HSBC shares slid by 2.7% amid Bloomberg reports suggesting the banking giant may cut up to 20,000 jobs. In contrast, IG Group emerged as a standout, climbing 5.5% to a record high after announcing plans to explore partnerships, acquisitions, and a potential relocation from London to target faster-growing markets.
TECHNICAL & TRADE VIEW - FTSE100
Daily VWAP Bearish
Weekly VWAP Bearish
Below 10500 Target 9700
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