FTSE 100 Dips Below 8,200 as Range Continues To Hold

London stocks saw a notable decline today, with the FTSE 100 dropping 0.81% to fall below the 8,200 level, ending the day at 8195.20. This downturn comes as investors closely monitor upcoming policy announcements from several major central banks, including the Federal Reserve, the Bank of England, and the Bank of Japan, alongside wage data that came in hot.

The movements and decisions of central banks are likely to impact the financial markets as the end of 2024 approaches, and could have a part to play in the usual Santa Claus rally. The Footsie's dip below the 8,200 support level brings the year-to-date performance on the index to 6.13%, with the UK market stuck trading in a pretty tight range over the past 7 months or so.

A glance at the chart below demonstrates the battle taking place between the bulls and bears this year, with neither able to really gain sustained control.

Markets are not expecting to see any cut in rates in the Bank of England's upcoming meeting on Thursday, with the outlook looking more into Q1 of 2025. There is currently a market expectation of ~75% for a rate cut in February.

The UK witnessed the fastest decline in private sector employment in nearly four years this December, reflected in the PMI composite output index, which registered a reading of 50.5. There were mixed results in the PMI data; the flash manufacturing PMI plummeted to an 11-month low at 47.3, while the services PMI showed a modest recovery, rising to a two-month high at 51.4. Chris Williamson from S&P Global mentioned that the UK economy is experiencing stalled growth, declining employment, and increasing inflation as the year concludes.

The real estate market reflected a downtrend as well, with new seller asking prices dropping by 1.7% in December, bringing the average home price to £360,197. In the equity markets, several significant updates surfaced.

Bunzl shares (LON: BNZL) have given holders a bumpy couple of days, after receiving an upgrade to ‘outperform' in yesterday's session, only to come in today with a downgrade from Jefferies and a drop of almost 6% in share price on the day.