Global markets showed signs of fatigue on Friday after a strong rally, as uncertainty regarding US Federal Reserve policy and mixed earnings results started to impact sentiment. Although UK retail data provided some assistance, there was a shift in investors’ attention to broader macroeconomic risks.
Asia stocks’ winning streak came to an end as concerns over delayed interest rate cuts in the US triggered a pullback. Hong Kong’s Hang Seng Index declined 1.1%, while Japan’s Topix dropped 0.8% after reaching all-time highs. Strong US job statistics earlier this week lowered expectations for near-term Fed cuts, fueling caution among investors.
The MSCI All Country World Index slipped 0.2%, ending the longest global market rally since January.
Retail sales in the UK rose 0.9% in June, rebounding from a 2.8% decline in May. While the figure missed forecasts of 1.2%, it marked the fourth monthly increase this year. Warm weather and major events drove stronger sales of groceries and fuel. Online sales climbed 1.7%, the highest since early 2022, driven by promotional campaigns and seasonal demand.
Even after excluding fuel, retail volumes still moved up by 0.6%. Compared to June 2024, the retail sales rose 1.7%, reversing a 1.1% year-over-year drop seen in May.
European markets pulled back as mixed earnings and trade uncertainty took center stage. The STOXX 600 fell by 0.4%, while the FTSE 100 declined to 9,112 after touching record highs on Thursday.
Individual company moves included:
NatWest rose nearly 2% after beating earnings expectations and announcing a major buyback.
Carrefour is gaining over 6% following strong half-year results.
Puma, Valeo, and Traton all slid significantly after cutting guidance.
Gold prices edged lower amid a stronger risk appetite, though a weaker dollar helped cushion the fall. Brent Crude rose to US$69.56 a barrel, while WTI gained to US$66.37. Oil prices were relatively stable throughout the week, with Brent logging a slight gain and WTI falling marginally.
The Japanese yen gained 1% this week, while the dollar index recorded its worst weekly performance in a month.
Technically, the FTSE 100 has pulled back from highs of around 9,163. It is now hovering around the initial support of 9,110. If the RSI falls below 50, further descent is possible. However, if there is a momentum return, then upside targets might remain at 9,250 and 9,500.
Also Read: Asia-Pacific Markets Slide as Investors Brace for Tariff Storm
With the global rally losing steam, UK consumer strength provided a silver lining, while European and Asian investors became apprehensive. All eyes are now on next week’s Fed meeting and trade negotiations.