Strong FTSE, strong UK? Not necessarily: BNBC newsletter in the UK

In this report, Jan King comes from a CNBC exchange newsletter in the UK. How is what you see? You can subscribe Here.

Lately, FTSE-100A long dog among capital indexes, enjoying your own day. This year in Britain, the main stock index increased by 11%, and this month has reached some notable landmarks.

The index launched on January 3, 1984, for the first time reached 9,000 milestones on July 15, and then on Thursday last week, reaching the latter in a number of closing 9.138.37.

It took only two years to move from 8,000 to 9000 compared to the seven hard years, which needed to grow from 7000 to 8000.

Footsie’s performance from year-to-one from the best on the world stock markets. It exceeded other well-known landmarks such as the S&P 500, Nikkei 225 and CAC-40, with Dax-40 in Germany one of the few peers dimmed it. Such a S&P 500 correction, when it is supported, is quite rare.

Foototsie only exceeded the American landmark during the year – in 2016 and 2022 – since the eruption of the global financial crisis 18 years ago. This reflects not only the dynamism and the potential of the growth of S&P components, mainly the technology sector, but also the excess weight is that many investors perceive both the Stodeger, the defensive sectors such as financial and consumer brackets, as well as high cyclical sectors such as energy and mining.

Accordingly, even after the recent execution, it is still priced/profit, several above its long-term average 15, while S&P, should not be forgotten, also traded almost 30 last week.

These ratings reflect a variety of factors that are caused by profitability. While the capital estimate has caused just over two -thirds of the S&P total profitability over the years, approximately half of the total profit of Footsie came from dividends.

The investor application in the UK to dividends, which is regularly scoring as a “coupon cut”.

Solid Foototsie’s testimony last week was for similar reasons at the rally elsewhere: relief in the US that reached A transaction With Japan over tariffs and optimism, which can be achieved something similar with the European Union, though the latter has proved to be disappointingAt least, as far as European stock markets are concerned.

But during 2025 there were other, broader factors.

This year’s big footsie broadcast to defensive stocks played well when investors are looking for asylum from the instability caused by Trump. There is also a lot of anecdotal evidence that he took advantage of some investors who export his money on the US – what was particularly obvious in the first four months of the year and summed up the expression that first appeared in the Wall Street Journal on May 19, “Abus (Abus (Abus (Abus (Abus (Abus (Abus (Abus (Abus (Abus (Anywhere but the USA) Trade ‘.

And there were important enhancements for individual sectors, first of all protection, the following commitments of a number of Western governments to collect protection costs.

Rolls-RoyceThis year, the aircraft manufacturer, which is also engaged in a significant defense business, increased by 75%this year. Bae SystemsThe largest defense contractor has increased by 59% since the beginning of the year. Now the couple is the sixth and 11th company in the index.

Specific items on the day when Footsie reached the last recording last week, included strong profits from a variety of voters first and foremost RecordHomemade Group; Howden Joinerysupplier of the kitchen and carpentry and Banking Group Lloyds.

Even BT, serial disappointment, rose sharply after quarterly results, it turned out to be no worse than expected. On this day, a pound factor was also reduced, which often benefits the index because the components of Footsie receive four-fifth wages abroad, mainly in US dollars and euros.

Some investors were not highly appreciated until the UK voted in favor of leaving the EU on June 23, 2016, and the pound went 10% against the green appeals in a matter of hours.

Initially, Footsie fell sharply, according to other UK assets. However, as it became aware that a weaker pound means higher income from foreign income, the index rallied, and a week later it was approximately 2.6%than it was before the referendum.

And this, in turn, leads to the fact that perhaps the most significant fact is lost on many ordinary British investors. Usually “Footsie” is considered a barometer of the Economic UK – and, of course, corporate – health.

However, Footsie is also stuffed with companies that practically do not do business in the UK, such as AntaphagChilean copper miner; MillingMexican silver miner; WorldThe world leader in the field of paper and packaging of 100 production sites around the world, but in Britain is not; and Group AsteadThe company for hiring a plant and tools that receives more than 90% of its salary in the US, where it is traded under the name Sunbelt Rentals – the name it will go when it moves the main list of stocks in early 2026.

Even a number of enterprises are traditionally seen as British British to such an extent PPBAE system systems British American tobaccoGet most of your salaries outside the UK

Of the 20 largest companies in Foototsie, only Lloyds Banking Group and Natwest GroupAnother lender earns most of its revenues in the UK

It wasn’t always the way.

At its launch 41 years ago, Footsie was full of companies that made most, if not all, their sales and profits in the UK, including the clutch of the domestic application, the pub and the hotel operators in Scottish and Newkl, Bass, WhitBreid, the Great Metro and the Union Lines; two flat -packing furniture and joinery in magnets and southern and MFI; And a number of retailers focused on the UK, including Burton Group, House of Fraser, Sears (is not relevant to the retail), British home shops, Marx and Spencer and large versatile shops.

With Globalization Yet to Take Off – This Was, Course, Before The Fall of The Berlin Wall – Even Those Financial Services Companies in the Footsie Were Largely Domestically Focused, Including Accident (Now Both Part of Aviva Group), Prudential and Sun Life and Landers Such As Royal Bank of Scotland, Midland Bank (now Part of HSBC) and Barclays, what was used Wholesale and investment banking activities with which it is most closely linked today.

At birth, Footsie contained only a few companies that could be considered as a truly international volume, including a couple dating from the Old British Empire: consolidated goldfields founded in South Africa in 1887 by the imperialist Cecil Rhodes and Harrison and Crosfield, now special elements GUM.

Then came globalization, and with this there were no number of IPO foreign companies, especially from South Africa, which wished to enter the London more liquid capital markets.

Being so concentrated internationally, footsie is no different from Dax-40, which receive about four-fifth income from outside Germany or CAC-40, whose voters make up about three quarters of their profits from outside France.

But this is definitely not worth the perception as a barometer of corporate British health – however, it makes some of us feel in the days when it gets into new highs.

– Jan King

The EU-SSH trading transaction may have one unexpected winner: UK. The European Union faces a greater tariff in the US than the UK that can supply the country In the advantage compared to the block.

Barclays Second Quarter Profit beat the assessment because the income from the investment banking business is switched. British lender also announced a ransom of $ 1 billion (1.33 billion) Market volatility increased revenue from investment banks.

UK pushes Apple and Google for mobile changes to stop market power. A Proposed power in the UK and the markets The designation of two companies as “Strategic Market Status”.

– Sophie Kedelin

UK stocks heavily supported the impulse of ascending growth FTSE 100 Staying above the 9000 points threshold, he exceeded the first time last week. The gain over the last week was about 0.6% as of Tuesday, though it lagged more widely Stoxx 600 The index increased by 1.4%.

The British pound on Monday has entered its biggest profit since April, rising by 0.66%as investors estimated a trading transaction in the EU.

Ing analysts note that while some will attribute the transition to a relatively best UK deal with the White House, there was also a short -term unwinding long European trade that was popular this summer.