London’s FTSE 100 touched a fresh record high on Friday – and some market watchers see more upside ahead for the long-maligned index, with U.S. tariffs, macroeconomic influences and outperformance in certain sectors sparking a widespread reassessment of U.K. equities. The U.K. index — home to some of the world’s most renowned companies, including AstraZeneca , Shell , Unilever and Rolls-Royce — briefly climbed to an all-time intraday high on Friday, following four consecutive days of gains. It has since erased gains for the session, trading 0.2% lower by 1:53 p.m. in London (8:53 a.m. ET). .FTSE YTD line FTSE 100 price So far this year, the FTSE 100 has jumped 12.4%. In comparison, Wall Street’s S & P 500 is up by just under 10% since the beginning of 2025, while the Dow Jones Industrial Average has risen by 5.6%. America’s tech-heavy Nasdaq Composite is up 12.4%. Compared to other major regional markets, the FTSE 100 has performed relatively well this year. While it hasn’t recorded the blockbuster returns of the German DAX – which is up 22.6% year-to-date – or Spain’s IBEX 35 – which has surged almost 32% higher this year – it has outperformed the Swiss SMI index, Sweden’s OMX Stockholm 30 , the French CAC 40 and the pan-European Stoxx 600 . Can the FTSE 100 go higher? “The decent yield and ongoing wave of takeovers both suggest there may still be value to be had in the UK market, given consensus forecasts for earnings and dividend growth,” Russ Mould, investment director at AJ Bell, told CNBC in an email on Friday. “No-one seemed interested in the U.K. equity market at the start of the year, other than to bash it for failing to attract more new flotations and the defection of some companies to other exchanges, but what is unloved can also be undervalued. And valuation is the ultimate arbiter of investment return.” While the U.K. index is currently on track for its fifth consecutive year of gains, questions over London’s appeal have been circulating for some time, with companies opting to list in alternative markets . Concerns about the U.K.’s economy and competitive edge post-Brexit have also weighed on sentiment. Meanwhile, the FTSE 100’s tilt toward traditional industries like mining, energy, banks and consumer staples have also raised questions about growth potential in recent years – but many of those sectors, particularly European lenders, have outperformed this year . “The U.K.’s exposure to sectors like miners, oils and financials means it may also be an option for investors to consider if the Trump administration gets U.S. growth to run hot and inflation does the same as a result,” Mould said. “Under such circumstances, long duration assets like technology, where America’s indices are heavily represented, could look less attractive, and this would only be an action replay of 2021-22 when value had a go at outperforming growth, if only relatively briefly.” ‘Anywhere But The USA’ Paul Surguy, managing director and head of investment management and proposition at London-based investment manager Kingswood Group, labeled the U.K. stock market as “the market that everyone loved to hate for some time.” But like Mould, Surguy told CNBC that the tide could be turning for British equity markets, thanks to falling interest rates and the U.K.’s uniquely positive relationship with the White House. “This [negative sentiment] led valuations to be extremely cheap, especially relative to the U.S. which has its own problems,” Surguy said Friday by email. Earlier this year, the U.K. became the first country in the world to sign a trade agreement with Washington following U.S. President Donald Trump’s unveiling of his so-called “reciprocal” tariffs. While Britain wasn’t fully spared from new import duties on its goods, the deal significantly softened the blow in comparison to America’s other trading partners . Surguy said that the U.K.-U.S. trade deal had helped buoy the investment case for London-listed equities. “The U.K. is less exposed to U.S. tariff hikes than most countries, with exports of goods to the U.S. only making up 2% of GDP,” he said. “And the recent limited trade deal generally sees US tariff increase to 10% – lower than for most other countries.” AJ Bell’s Mould said the U.K. was now well positioned to benefit from a trend among investors that has seen a widespread desire to diversify assets to markets outside of the U.S., in light of unpredictable policy changes from the current administration. Some have described this trend the ” Sell America ” or ” Anywhere But the USA ” movement. “The U.K. could also be benefiting from some investors’ desire to at least hedge, if not decrease, their exposure to U.S. dollar-denominated assets, given how well they have done for the last decade and how America’s federal debts, style of government and trade policies do not necessarily sit well with all and or the post-1947-GATT-deal consensus that has done so much to lift so many boats on the globalisation tide,” Mould said. Cashing out Conversely, Iain Barnes, chief investment officer at London-based wealth manager Netwealth, told CNBC on Friday that he was starting to look at markets outside of the U.K. for further opportunities, although he wasn’t completely shunning the British market. “The FTSE has had a cracking year so far, but it’s interesting to see the drivers of returns,” Barnes said. “More than half of the index’s 15% return in 2025 has come from the banks, Rolls Royce and BAE, so it hasn’t been based on optimism around UK plc.” Barnes noted that broadly, conditions continue to look favorable for the large banking sector, which should be supportive of further growth in the FTSE 100. “Despite the FTSE’s lacklustre long-term earnings growth, we do like the U.K. market’s role in wider equity portfolios thanks to its complementary characteristics with other, faster growing markets,” Barnes said. “Yield generation, and bigger energy and materials allocations mean the FTSE often does well when other markets are struggling. However, our latest move has been to reduce the FTSE after its strong performance, targeting more clear yield generation and better value in the U.K. commercial property sector on a cyclical view, as well as seeking more exciting performance potential in Japan and across emerging markets.”
