FTSE 100 FINISH LINE 2/4/26
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FTSE 100 FINISH LINE 2/4/26
London’s main stock indexes fell early on Thursday, breaking a three-day winning streak, as market sentiment soured following U.S. President Donald Trump’s vow to launch more aggressive strikes on Iran. Earlier, Trump had indicated a desire for a swift resolution to the conflict, sparking hopes of de-escalation. However, his latest remarks triggered a risk-off atmosphere across financial markets. The energy sector surged 3.6% as oil prices spiked more than 7% following Trump’s comments, raising concerns about prolonged supply disruptions. Oil giants BP and Shell gained 4.5% and 3.3%, respectively, ranking among the top performers on the benchmark index. On the other hand, precious metal miners slid 5.1%, becoming the biggest drag on the index as gold prices fell in response to the developments. Later in the session, reports of a potential agreement between Oman and Iran to draft a protocol for access to the Strait of Hormuz helped reverse the negative sentiment, allowing the UK’s benchmark index to rebound into positive territory. Both domestic indexes remained poised to end the shortened holiday week on a higher note.
This week, financial markets have experienced heightened volatility amid the evolving U.S.-Iran conflict. Initial optimism over a potential resolution had buoyed risk assets and brought down Brent crude prices. However, Trump hinted at a possible escalation of military tensions in the coming weeks, partially erasing these gains. Government bond yields fluctuated, with Federal Reserve Chairman Jerome Powell signalling a willingness to look beyond energy-driven inflation spikes if long-term expectations remain stable. Other central banks may adopt a similar stance, though domestic economic conditions will play a significant role in shaping their policies. Bank of England Governor Andrew Bailey warned against overly aggressive rate hike projections.
The conflict is expected to gradually produce economic fallout, tempering prospects for sustained market rallies. While March PMI surveys highlighted immediate disruptions, historical lessons from Russia’s 2022 invasion of Ukraine suggest that geopolitical tensions can have long-lasting effects. Even if hostilities ease, uncertainty surrounding energy production and shipping routes through the Strait of Hormuz may persist. Market sentiment has noticeably shifted, with diminished expectations for sharp monetary tightening. The probability of a Bank of England rate hike this month has dropped to 30%, while the likelihood of a European Central Bank increase stands at 50%. Central banks seem more willing to accept energy-related inflation shocks, especially if economic growth slows and inflation expectations stay stable. Markets will remain closed for Good Friday and Easter Monday.
TECHNICAL & TRADE VIEW - FTSE100
Daily VWAP Bullish
Weekly VWAP Bearish
Below 10500 Target 9700
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Patrick has been involved in the financial markets for well over a decade as a self-educated professional trader and money manager. Flitting between the roles of market commentator, analyst and mentor, Patrick has improved the technical skills and psychological stance of literally hundreds of traders – coaching them to become savvy market operators!