UK Investment & Market Weekly Summary: July 7-11, 2025

Market Performance Highlights

FTSE 100 Shows Resilient Growth

The UK's flagship index has delivered another solid week of performance, with the FTSE 100 posting modest gains throughout the July 7-11 trading period. Energy and mining sectors have provided strong support, whilst consumer discretionary stocks have shown renewed strength following positive retail sales data. The index closed Friday at 8,247 points, representing a weekly gain of 0.8%.

Sterling Strengthens Against Major Currencies

The British pound has extended its strong performance against both the US dollar and euro, with GBP/USD breaking through key resistance levels during mid-week trading.

Current Rate Performance

- GBP/USD trading at 1.3821 on July 11, 2025

- Weekly gain: +0.48% from previous week's close

- Monthly performance: +2.67% over July 2025 (to date)

Recent Performance Trends

- Quarterly gain: +4.7% over Q3 2025 (to date)

- Annual performance: +9.4% over the last 12 months

- Weekly range: Between 1.376 (low on July 7) and 1.384 (high on July 10)

Market Drivers

- UK inflation data: Better-than-expected CPI figures supporting currency strength

- European economic uncertainty: Relative UK stability attracting investment flows

- Technical breakout: GBP/USD surpassing key resistance at 1.380 level

Most Traded Stocks (11 July 2025)

Based on morning trading session activity, the 10 most heavily traded shares were:

1. Shell (LSE:SHEL)

2. AstraZeneca (LSE:AZN)

3. Rio Tinto (LSE:RIO)

4. Vodafone Group (LSE:VOD)

5. BP (LSE:BP.)

6. HSBC Holdings (LSE:HSBA)

7. Unilever (LSE:ULVR)

8. Rolls-Royce Holdings (LSE:RR.)

9. Barclays (LSE:BARC)

10. Lloyds Banking Group (LSE:LLOY)

Top Performing Sectors

- Energy: Oil and gas companies benefiting from supply stability and demand growth

- Mining: Commodity prices supporting sector performance across base metals

- Consumer Goods: Unilever and consumer staples showing defensive strength

- Pharmaceuticals: AstraZeneca leading healthcare sector gains on pipeline developments

Undervalued Stocks Trading Below Intrinsic Value

Major Companies in Undervalued Territory

- Shell (LSE:SHEL) - Despite heavy trading volume, remains below fair value estimates based on cash flow analysis

- Tesco (LSE:TSCO) - Retail recovery story continues to trade at discount to intrinsic value

Specific Undervalued Picks Based on Fundamental Analysis

- ITV (LSE:ITV) - Trading at £0.742, estimated fair value £1.05 (29.3% discount)

- Centrica (LSE:CNA) - Trading at £1.298, estimated fair value £1.87 (30.6% discount)

- Marks & Spencer (LSE:MKS) - Trading at £3.12, estimated intrinsic value £3.75 (16.8% discount)

Notable Investment Trends

Popular Investment Strategies for July 2025

- Energy Transition Funds - Increasing interest in renewable energy infrastructure investments

- UK Recovery Plays - Focus on domestic consumption and services recovery

- Dividend Aristocrats - Continued appetite for consistent income-generating stocks

- Small-Cap Growth - Selective exposure to UK smaller companies with growth potential

Economic Context

Inflation Trends Encouraging

UK inflation data for June showed continued moderation, with CPI falling to 2.1% year-on-year, providing support for both currency strength and equity valuations across interest-sensitive sectors.

Employment Market Stability

Labour market data continues to show resilience, with unemployment remaining near historic lows whilst wage growth maintains steady momentum, supporting consumer spending sectors.

Bank of England Policy Outlook

Markets are pricing in a measured approach to future policy adjustments, with the BoE's data-dependent stance providing stability for investment planning and currency strength.

This week has highlighted the UK market's continued ability to deliver steady returns whilst navigating global economic crosscurrents. The combination of currency strength, sector rotation opportunities, and attractive valuations in key undervalued stocks suggests a constructive environment for both growth and value investment strategies.