London's FTSE 100 rose on Tuesday, with financials and industrials leading gains, as easing oil prices supported risk appetite.
Britain's benchmark FTSE 100 index fell on Thursday, snapping a seven-day winning streak, as renewed hostilities between the United States and Iran weighed on investor sentiment and clouded hopes of reopening the Strait of Hormuz. The blue-chip FTSE 100 index fell 0.8% to 10,418.33 points by 1013 GMT.
U.K. government regulator Ofgem said Wednesday that its household energy price cap would rise by 13% in July. “Ongoing conflict in the Middle East is impacting the price we pay for energy,” the head of the regulator said.
UK stocks were little changed on Wednesday, lagging behind broader European markets as growing political uncertainty in Britain weighed on investor sentiment. The benchmark FTSE 100 edged 0.03% higher by 11:07 am GMT, while the mid-cap FTSE 250 slipped 0.1%.
European shares were little changed on Monday as stronger economic data from across the region was offset by a rise in oil prices linked to stalled US-Iran peace efforts, leaving investors reluctant to push the market decisively higher. Britain's FTSE 100 rose 0.1%, France's CAC 40 fell 0.5% and Germany's DAX was broadly flat.
The UK stock market rallied sharply on Wednesday as investor sentiment improved amid growing expectations of a potential agreement between the United States and Iran following months of conflict in the Gulf region. The benchmark FTSE 100 index rose 2.4% by 1055 GMT, while the midcap FTSE 250 climbed 2.6%, reaching its highest level in two weeks.
Retirees hunting for income beyond U.S. borders have increasingly turned to iShares MSCI United Kingdom ETF ( NYSEARCA:EWU ), which packages the dividend-rich London Stock Exchange into a single, low-cost fund.
The FTSE 100 kicked off 2026 on a strong note, building steady upward momentum. U.K.'s benchmark index has risen 7.69% so far this year and 22.75% over the past year, outperforming its transatlantic peer.
EWU has seen a lot of momentum in 2025 and I see that continuing in 2026. The companies in the underlying portfolio have a lot of global exposure, mitigating the impact on weak domestic growth. The valuation and dividend yield are also attractive qualities.
iShares MSCI United Kingdom ETF (EWU) delivered over 50% total return since late 2023, but now faces an unfavourable outlook. Valuations for EWU have risen, eroding the UK market's risk premium, especially as UK bond yields have risen. UK economic outlook remains bleak, with stagnating GDP, weak corporate sales growth, and policy headwinds likely to persist.
Escalating U.S.-China trade tensions are shaking global markets, prompting investors to eye UK ETFs like EWU as a potential safe haven.
EWU offers a compelling relative value versus SPY, with attractive valuation, higher dividend yield, and other relatively strong features versus the S&P 500. The UK market, via EWU, is less exposed to tech concentration risk than the S&P 500, making it a useful hedge in uncertain times. Currency trends and global macro shifts could favor non-US equities like EWU over the next 3-5 years, especially if the US dollar weakens.