The FTSE 100 smashed through the 9,000-point mark for the first time ever, as global investors pivot away from the US and eurozone amid rising trade war jitters and valuation fatigue. UK stocks are suddenly looking like the best house in a bad neighbourhood.

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So far this year, the UK’s blue-chip index has outpaced both the S&P 500 and Europe’s Stoxx 600, gaining over 10%. That’s a major reversal from the past decade, where London lagged behind as US tech soared. But with President Trump’s tariff threats casting a shadow over global trade—and European markets looking exposed—investors are hunting for stability and finding it in British equities.

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“It’s a good place to hide,” said Emmanuel Cau, head of European equity strategy at Barclays. And right now, that means everything from mining giants to defence contractors to telecoms and utilities.

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The UK’s recent partial trade agreement with the US, signed in May, has also given it a geopolitical edge over its EU peers. While Brussels remains locked in a standoff with Washington, London is seen as having de-risked some of its transatlantic exposure. In an era of unpredictable policy swings, even a limited deal brings comfort.

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That sentiment is being reinforced by cold, hard numbers. UK-listed companies are cheap – at least on paper. The FTSE 100 trades at just 17 times earnings, far below the S&P 500’s frothy 27x multiple. “People are freaked out about Europe with the tariffs,” said Neil Birrell, CIO at Premier Miton. “So the UK is almost a ‘safe haven’ from a valuation perspective.”

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Investors have piled into British defence stocks in particular, buoyed by surging global demand for arms and aerospace equipment. BAE Systems is up 65% year-to-date, while Rolls-Royce has soared 75%. Big banks are also rallying, with Lloyds gaining 41% and Prudential up 47%.

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It’s a comeback few saw coming. For years, the London market was seen as dull, unloved and overexposed to old-world sectors. But in 2025, those same sectors—energy, financials, defence—are suddenly where the action is. They’re also less sensitive to the kind of tech-heavy valuation shocks that have rattled the US market in recent weeks.

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Of course, not everything is rosy. The UK’s fiscal outlook remains a point of concern. With public finances stretched and bond investors getting twitchy, some analysts warn the rally could reverse quickly if confidence cracks. “If we see a proper bond market strop about the UK’s fiscal position,” Cau said, “there might be a ‘sell UK’ moment.”

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Still, for now, London is basking in the glow of investor favour. It may not last forever—but for the FTSE 100, breaking 9,000 marks more than just a psychological milestone. It’s a signal that the global investment map is shifting—and the UK, battered and overlooked for years, is back on the radar.

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