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FTSE 100 Hits Record High Amidst Investor Shift
7 Jan
Summary
- FTSE 100 reached a record high, its best session in six months.
- UK equity funds saw outflows of £9.55 billion in 2025.
- Investors seek value in the UK market, attracted by foreign capital.
London's leading stock index, the FTSE 100, achieved a historic milestone, reaching its highest point ever and experiencing its most significant single-day rise in six months. This performance marks a strong start to 2026, building on a nearly 22 percent increase throughout 2025. The index has now seen three consecutive days of gains since the new year began, surpassing the 10,000 mark for the first time.
This upward trend contrasts with substantial investor withdrawals from UK-focused equity funds, which recorded outflows of £9.55 billion in 2025, marking the tenth consecutive year of such trends. Analysts suggest that while domestic investors are divesting, overseas buyers are actively investing, drawn to the perceived attractive valuations of UK equities.
The market's recent surge is partly attributed to a shift away from US tech stocks, fueled by concerns over an AI bubble and anxieties surrounding unpredictable policy-making. This has led investors to seek value in traditional sectors like finance, pharmaceuticals, oil, and retail, which are seen as offering consistent income.
