Investment bank Peel Hunt (PEEL.L) has highlighted that it is seeing more positivity from institutional investors towards the UK market.
In its full-year results, published on Monday, Peel Hunt said: “Following the challenging market conditions of February and March, FY26 has started more positively, with the Trump administration agreeing a number of trade deals, including with the UK, and with interest rates having been cut by the Bank of England.
“We are seeing a rotation out of US assets into Europe and greater institutional positivity towards the UK.”
The investment bank said that equity capital market (ECM) activity in the UK “remains generally subdued but could gain traction should macroeconomic conditions continue to stabilise.”
The UK’s FTSE 100 (^FTSE) closed at a fresh high of 8,884 points on Thursday and is now up 8.8% year-to-date. Meanwhile, the S&P 500 (^GSPC) is up just 1.6% so far this year, with concerns about the economic impact of US president Donald Trump’s tariffs weighing on investor sentiment.
On the back of the FTSE’s latest record close, Saxo Markets UK investor strategist Neil Wilson said that the UK blue-chip index has “rallied somewhat against the odds with broad-based gains among its diverse membership”.
For example, Wilson pointed out that the surge in gold and silver prices has boosted miner Fresnillo (FRES.L), while government pledges to spending more on defence have boosted BAE Systems (BA.L) and Rolls-Royce (RR.L). In addition, he said the FTSE’s global footprint has also helped and that there had been strong progress among financial stocks, such as Lloyds (LLOY.L) and Prudential (PRU.L).
“I think we have clearly seen a rotation in global equity markets as investors have for the first time in years questioned the TINATA — there is no alternative to America,” Wilson said. “Investors are looking elsewhere and consistently conversations with clients revolve around geographic diversification and reducing exposure to the US.”
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