UK Investment & Market Weekly Report Mon 13 Oct – Fri 17 Oct 2025

FTSE 100 Performance

The FTSE 100 experienced a challenging week, reversing the previous week's gains as banking sector concerns weighed heavily on sentiment. The index closed Friday, 17 October 2025, at approximately 9,354.57 points, representing a weekly decline of approximately -1.03% from the previous week's close of 9,451 points.

The index demonstrated volatility throughout the week, with daily movements as follows:

• Monday, 13 October: 9,442.87 (opening near previous week's highs)

• Tuesday, 14 October: 9,442.94 (consolidation)

• Wednesday, 15 October: 9,452.75 (testing resistance)

• Thursday, 16 October: 9,424.76 (early weakness)

• Friday, 17 October: 9,354.57 (sharp decline, -0.86% on the day)

Current Trading Context:

• Year-to-Date Performance: +11.56% (tracking towards strong annual performance despite weekly pullback)

• 52-week range: 7,544.83 - 9,577.08 (Friday's close near mid-range)

• Banking sector led the decline, shedding nearly 3% on Friday alone

• Approximately two-thirds of the index lower for the week

Currency Performance

GBP/USD: The pound showed resilience despite broader market weakness

• Friday close: Approximately 1.3352 (modest strength from opening)

• Weekly range: 1.3326 - 1.3485 (testing resistance levels)

• Year-to-date: Strong performance, maintaining upward trajectory from previous weeks

• Market focus: UK GDP data and labour market indicators supported sterling

Top Performing & Declining Sectors

Banking & Financial Services (Significant Decline)

Financial stocks experienced sharp selloffs, particularly on Friday, as contagion fears from US regional banking sector concerns spread globally. HSBC, Barclays, and Standard Chartered led declines among major UK lenders. Nearly £13 billion wiped off UK lenders' valuations in a single day.

Oil & Energy (Decline)

Oil majors tracked broader commodity weakness as risk sentiment deteriorated throughout the week.

Industrial Stocks (Mixed)

Industrial names provided limited support, with mixed sentiment reflecting broader market uncertainty.

Technology & AI (Relative Resilience)

Despite broader market weakness, AI-focused companies maintained relative strength, though global equity concerns limited upside.

Investment Market Highlights

US Banking Sector Contagion

Friday's sharp market decline was driven by spreading concerns about US regional banking sector credit quality and private credit market vulnerabilities. Global markets braced for potential contagion effects, with ING warning of broader equity market spillovers.

Venture Capital & AI Investment

Despite equity market weakness, venture capital activity remained resilient, with AI funding continuing to dominate investment flows. UK AI startups maintained strong funding momentum despite broader market headwinds.

M&A and Private Equity

M&A activity remained steady, though sentiment shifted towards caution as banking sector concerns raised questions about deal financing availability and credit market stability.

IPO Market

London's IPO market remained under pressure, with banking sector weakness likely to dampen new listing appetite further.

Market Trends

• Banking Sector Contagion: US regional banking concerns spreading to global equities, particularly affecting financial stocks

• Risk-Off Sentiment: Investors rotating away from cyclical sectors towards defensive positioning

• Credit Market Concerns: Private credit market vulnerabilities raising broader financial stability questions

• AI Resilience: Technology and AI sectors maintaining relative strength despite equity market weakness

• Currency Stability: GBP showing resilience supported by UK economic data

Economic Context

The week reflected a sharp reversal in market sentiment as banking sector concerns dominated headlines. The FTSE 100's decline marked the worst performance in recent weeks, with Friday's selloff representing one of the sharpest single-day declines since April 2025. UK economic data, including GDP growth and labour market indicators, provided some support to sterling but was insufficient to offset broader risk-off sentiment in equities.

The contrast with the previous week's record highs underscores the market's sensitivity to credit and banking sector developments, with investors reassessing risk positioning across global markets.

Investment Strategy Outlook

Market participants are adopting a cautious stance pending clarity on US banking sector stability and private credit market resilience. While AI and technology sectors continue to attract capital, broader equity positioning has shifted towards defensiveness. The week's volatility highlights the importance of portfolio diversification and selective sector exposure, particularly given ongoing uncertainties in financial markets. Investors are likely to maintain elevated scrutiny of credit quality and counterparty risk across both traditional and alternative lending channels.