UK Investment & Market Weekly Report Mon 6 Oct – Fri 10 Oct 2025

FTSE 100 Performance

The FTSE 100 delivered exceptional performance this week, hitting new all-time highs and closing Friday, 10 October 2025, at approximately 9,451 points, representing a weekly gain of approximately +2.87% from the previous week's close.

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

• Monday, 6 October: 9,187 (opening rally driven by financial and industrial gains)

• Tuesday, 7 October: Continued upward momentum

• Wednesday, 8 October: 9,446.43 (new record close, +1.03%)

• Thursday, 9 October: Hovering near record highs

• Friday, 10 October: 9,451 (weekly close at fresh all-time high)

Current Trading Context:

• Year-to-Date Performance: +15% (on track for strongest year since 2009)

• Healthcare stocks powered the record-breaking rally

• Tesco surged 3% after raising full-year profit forecast

• 3i Group among top performers

Currency Performance

GBP/USD: The pound showed slight weakness against the dollar this week

• Friday close: 1.3446 (down 0.22% from previous session)

• Weekly range: 1.3399 - 1.3529

• Monthly performance: Relatively stable, up 0.02% over past month

• Year-to-date: Strong performance, up +7.72% in 2025

Top Performing Sectors

Healthcare & Biotech

Led the FTSE 100 to record highs, with pharmaceutical and biotech companies driving significant gains throughout the week.

Financial Services

Strong performance from banks and financial institutions, leading Monday's rally and maintaining momentum.

Technology & AI

Artificial intelligence companies continued to dominate global investment flows, with AI accounting for 57.9% of all global venture capital funding in Q1 2025 (up from just 12% in 2017).

Retail

Positive sentiment following Tesco's upgraded profit guidance.

Investment Market Highlights

Venture Capital Activity

• European Tech Surge: European tech funding surged 163% in September, hitting €8.4 billion – the biggest month of 2025 so far

• AI Dominance: UK AI startups secured $2.4 billion in H1 2025, representing 30% of all UK VC funding

• Global AI Investment: AI startups raised $73.1 billion globally in Q1 2025, accounting for 57.9% of all venture capital funding

• UK Activity: The UK topped European activity charts for tech investment

• Megadeals: Mistral AI's €1.7 billion funding round drove September's record performance

• Nvidia Expansion: Nvidia backed 22 companies in September alone, demonstrating aggressive AI infrastructure investment

M&A and Private Equity

• Public M&A Growth: Steady increase in UK public M&A activity, with 23 firm offers in Q3 2025 (up from 17 in Q2)

• Megadeal Activity: Global average deal size rose to $141.4 million in Q3, despite overall volume decline

• Cross-border M&A: Hit $931 billion globally, showing strong international appetite

• Private Equity Deals: 3i Group exploring strategic options for portfolio company Evernex at €1.2bn valuation

• Sector Activity: Private equity-driven deals remain consistently hot, particularly in asset/wealth management

IPO Market

• London Struggles: UK IPO volumes down 69% to $248 million in Q3 2025

• Global Ranking Slide: London dropped out of the world's top 20 IPO markets, overtaken by Mexico and Singapore

• Market Challenges: Significant headwinds continue for London's listings market despite strong secondary market performance

Market Trends

• AI Investment Bubble Concerns: Rapid valuation increases in AI startups raising concerns about potential bubble formation

• Infrastructure Investment: Over £31 billion in capex pledges from Microsoft, Google, Nvidia, OpenAI, Salesforce, and CoreWeave focused on AI data centres

• Retail Investor Confidence: 51% of UK retail investors expect AI-related stocks to rise in 2025, with AI adoption surging 45% year-over-year

• Quality Focus: Investors maintaining selective approaches, favouring proven business models with clear growth trajectories

• Sector Concentration: Technology and healthcare sectors driving market resilience and record-breaking performance

Economic Context

The week reflected strong market optimism as the FTSE 100 shrugged off concerns about the US government shutdown and delivered record-breaking performance. Healthcare stocks led the charge, while financial and industrial names provided solid support.

The contrast between the FTSE 100's stellar secondary market performance and London's struggling IPO market highlights the divergent fortunes within UK capital markets. While established companies thrive, new listings remain challenged.

Investment Strategy Outlook

Institutional investors are maintaining aggressive positions in AI and healthcare sectors, with record capital deployment in artificial intelligence infrastructure. The concentration of investment in AI (nearly 60% of global VC funding) suggests continued sector dominance but also raises valuation concerns. Healthcare's strong performance indicates sustained confidence in pharmaceutical innovation and biotech development.