Markets Today: UK Composite PMI Falls, Gold Eyes $3800/oz, FTSE 100 Retreats Toward 100-day MA

[Redator]

Asia Market Wrap - China, Hong Kong Shares Slide

Most Read: Nikkei 225: Bullish reversal above 45,000, no negative impact from BoJ’s ETF unwind

Following a technology-fueled surge on Wall Street, Asian stocks were trading near a record high, although shares in Hong Kong and mainland China declined. The MSCI Asia Pacific Index pulled back from its earlier highs to trade mostly flat. Stocks in Hong Kong fell 1% as the city was dealing with its most severe typhoon since 2018.

However, shares of Asian companies that are involved in making computer chips rose, which was a reaction to the news that Nvidia has invested in OpenAI.

There was no cash trading of U.S. government bonds (Treasuries) during the Asian trading hours because markets in Tokyo were closed for a public holiday.

China's stock markets saw declines, with both the CSI300 Index and the Shanghai Composite Index falling by 1.2%, and Hong Kong's Hang Seng Index dropping by 1%.

This negative mood among investors was made worse after a highly anticipated press conference by top financial regulators on Monday failed to provide any new announcements of policy support for the economy.

Euro Area Private Sector Growth Accelerates, UK Composite PMI Falls

Looking at the Euro Area, I was of the opinion that the very strong business activity in August, mainly from manufacturing, was likely a one-time event. This view was supported by a separate survey from the European Commission, which showed that while current production was up, companies weren't very optimistic about the future.

New data released today seems to confirm this. The manufacturing sector has now declined to its lowest point in three months. However, activity in the service sector has improved significantly. This balance has kept the overall business activity index at a level that suggests the economy is still growing modestly. Overall, this means the eurozone economy had a respectable quarter, despite a lot of instability in the global economy.

When looking at individual countries, France is a negative standout. Its business activity index fell to its lowest level since April, with both manufacturing and services showing a decline. This is in contrast to Germany, where the services sector is picking up. Given the current political uncertainty in France, its economy appears to be reflecting that same sense of instability.

According to a preliminary estimate, the UK's business activity slowed down in September. The S&P Global Composite PMI index dropped to 51, a notable decrease from August's one-year high of 53.5 and below the expected 53. This marks the slowest rate of growth since May.

Sources: ONS, S&P Global PMI

The slowdown was seen in both the services sector, which grew at a slower pace, and the manufacturing sector, which experienced a more significant decline. New business increased only slightly, as companies reported that clients were hesitant to spend, particularly in export markets in the US and EU. To keep up production, businesses had to rely on existing backlogs of work.

At the same time, costs for companies increased sharply due to rising wage pressures and higher National Insurance contributions. This led firms to raise their prices. As a result of these pressures, the level of employment in the private sector fell for the eleventh month in a row.

Looking ahead, companies remain optimistic about future growth, but this optimism is not as strong as it was last month.

European Open - FTSE 100 Retreats

Global stocks climbed on Tuesday, driven by growing excitement around artificial intelligence (AI), which is attracting a lot of money into technology companies. Expectations that the US Federal Reserve will continue cutting interest rates also pushed the price of gold to a new record high.

European stocks, which have typically been slower to follow the tech stock trend, saw gains of 0.4% in the EURO STOXX 600 index. This was primarily boosted by utility companies, with both German and French stock indexes climbing 0.5% and 0.7% respectively.

However, the Dutch chip equipment manufacturer ASML saw its shares drop by 1.2%, which kept the overall gains in check.

On the FX front, The S dollar held steady on Tuesday as investors carefully considered recent comments from members of the Federal Reserve.

These remarks were seen as having a "hawkish" tilt, which means they suggest a preference for tighter monetary policy, like higher interest rates, to control inflation. At the same time, the market was waiting for a speech from Fed Chair Jerome Powell for more clarity on the economic outlook.

The dollar's value shifted throughout the day but ended up mostly unchanged. The U.S. Dollar Index, which measures the dollar against other major currencies, was last at 97.36, after its three-day winning streak was broken on Monday.

The euro and the British pound were slightly lower and flat against the dollar, respectively. The dollar was also flat against the Japanese yen.

However, it gained slightly against the Swedish krona after Sweden's central bank cut its key interest rate to 1.75% and indicated that rates would likely stay at that level for a while.

The offshore Chinese yuan remained unchanged against the dollar. This was because some major state-owned banks were reportedly buying US dollars. This move is typically seen as an effort to slow down the yuan's appreciation, or strengthening, against the dollar.

Currency Power Balance

Source: OANDA Labs

Oil prices rose slightly on Tuesday, even though investors were also considering the potential for more oil supply coming to the market. This new supply is expected because Iraq and the Kurdish regional governments have reached a preliminary deal to reopen a key oil pipeline.

Brent crude futures gained 14 cents to $66.71 a barrel, and U.S. West Texas Intermediate (WTI) crude gained 21 cents to $62.49 a barrel. Both types of oil recovered from small losses earlier in the day.

The recent gains come after both Brent and WTI had fallen for the previous four sessions, dropping about 3% in value.

Gold prices held steady on Tuesday after reaching a new record high. This was supported by ongoing expectations for more interest rate cuts in the U.S. and a weaker dollar, which typically makes gold more appealing. Investors are now waiting for a speech from Federal Reserve Chair Jerome Powell for more clues about the central bank's future policy plans.

Spot gold, which is the current price for immediate delivery, was up by 1% at $3,783.25 per ounce, after it had already hit a record high of $3,791.02 earlier in the session.

Economic Calendar and Final Thoughts

Looking at the economic calendar, the European session was busy with a host of PMI data releases.

Attention will now shift to US PMI data while central bank policymakers from the ECB, FED and Bank of Canada will also be speaking during the US session.

For all market-moving economic releases and events, see the MarketPulse Economic Calendar. (click to enlarge)

Chart of the Day - FTSE Index

From a technical standpoint, the FTSE 100 has seen a pullback this morning after advancing yesterday.

Overall structure remains bullish but a pullback toward the 100-day MA is now looking likely.

A bounce off the support here could lead to fresh highs beyond the 9280 highs printed earlier today.

Immediate support below the 100-day MA is provided by the 200-day MA at 9216.

Resistance beyond the 9280 handle may be found at 9320 and 9357.

FTSE 100 Four-Hour Chart, September 23. 2025

Source: TradingView.com (click to enlarge)

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