UK Investment & Market Weekly Summary: June 23-27, 2025

Market Performance Highlights

FTSE 100 Shows Resilience

The UK's flagship index has demonstrated positive momentum this week, with the FTSE 100 rising 0.19% on Thursday alone. This uptick was primarily driven by strong performance in mining and oil stocks, with BAE Systems leading the charge with a nearly 4% increase following NATO's increased spending pledge.

Pound Strengthens Against Dollar

The British pound has extended its gains against the US dollar (GBP/USD), reflecting improved investor confidence in UK markets amid easing geopolitical tensions globally.

Current Rate Performance

- GBP/USD rose to 1.3740 on June 27, 2025

- Daily gain: +0.11% from the previous session

- Highest rate this year: 1.3711 (reached on June 26, 2025)

Recent Performance Trends

- Monthly gain: +2.03% over the past month

- Annual performance: +8.66% over the last 12 months

- Weekly range: Between 1.338 (low on June 23) and 1.376 (high on June 26)

Market Drivers

- US Dollar weakness: The dollar has hit a three-year low amid Federal Reserve independence concerns

- Broad dollar decline: Contributing to pound strength across the board

- Technical momentum: GBP/USD is trading above both its 8-day EMA by 0.88% and 21-day EMA by 1.35%

Key Market Context

- The US dollar's decline is attributed to political uncertainty regarding Federal Reserve leadership changes

- Currency analysts note this represents the dollar's "soft path continues" trend

- The pound's strength is primarily driven by dollar weakness rather than UK-specific factors

So the data confirms the pound has indeed been strengthening against the dollar, with significant momentum building through June 2025, culminating in multi-year highs this week.

Most Traded Stocks (27 June 2025)

Based on Interactive Investor's morning trading session, the 10 most heavily traded shares were:

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

2. JD Sports Fashion (LSE:JD.)

3. BP (LSE:BP.)

4. The Smarter Web Company (AQUIS:SWC)

5. Glencore (LSE:GLEN)

6. Coinsilium Group Ltd (AQUIS:COIN)

7. Tiger Royalties and Investments Ord (LSE:TIR)

8. Metals One (LSE:MET1)

9. Pri0r1ty Intelligence Group (LSE:PR1)

10. Rio Tinto Ordinary Shares (LSE:RIO)

Top Performing Sectors

- Defence & Aerospace: BAE Systems surged on NATO spending commitments

- Mining: Benefited from improved global risk sentiment

- Energy: Oil stocks contributed to FTSE gains

Undervalued Stocks Trading Below Intrinsic Value

Major Companies Recently Entering Undervalued Territory

- Unilever (LSE:ULVR) - Among the newly undervalued stocks according to Morningstar

- BAE Systems (LSE:BA.) - Recently fell into undervalued territory despite strong NATO-driven performance

Specific Undervalued Picks Based on Cash Flow Analysis

- Informa (LSE:INF) - Trading at £8.008, estimated intrinsic value £14.47 (44.7% discount)

- Huddled Group (AIM:HUD) - Trading at £0.035, estimated intrinsic value £0.06 (41.7% discount)

- Hostelworld Group (LSE:HSW) - Trading at £1.365, significant discount to fair value

Notable Investment Trends

Popular Investment Funds for 2025

- Vanguard LifeStrategy 100% Equity (24.83% three-year return)

- HSBC FTSE All World Index (23.59% three-year return)

- Vanguard LifeStrategy 80% Equity (18.82% three-year return)

- Royal London Short Term Money Market (13.47% three-year return)

Economic Context

Manufacturing Concerns

UK car production has fallen to a 70-year low, highlighting ongoing challenges in the manufacturing sector that could impact related investment opportunities.

Global Influences

Markets remain sensitive to international developments, with weak trade data from China creating some downward pressure on UK indices, though this has been offset by positive domestic factors.

This week has shown the UK market's ability to maintain positive momentum despite global headwinds. The combination of strong defence spending, resource sector performance, and currency strength suggests underlying resilience in the UK investment landscape, whilst the undervalued opportunities present compelling cases for value investors.