Half time: London market lags as rivals across the Atlantic hit fresh highs
London’s main stock market index ended the first half of 2026 within touching distance of a record high set earlier in the year, but remained off the pace set by its rival in New York.
The FTSE 100’s positive-but-relatively-limited run for the period summed up a feeling of measured optimism. While it made overall gains, the world-famous City benchmark was unable to make as much progress as its rivals across the Atlantic and the Channel.
It closed at 10,497.12 on the last trading day of June, and gained five per cent in the first six months of the year.
The early part of the year was brighter. In January, the FTSE 100 crossed the 10,000-point barrier for the first time ever. It hit a record of around 10,911 points in February.
Then came the outbreak of war in Iran, on the last day of the month.
The geopolitical turmoil and a wave of inflation sparked by a surge in oil prices sent shockwaves across global markets.
New York, New York
Since the FTSE 100’s winter peaks, the S&P 500 in New York has set fresh record highs, including in June. For the first half, the broad US benchmark added 9.3 per cent, closing at 7,499.3 points on 30 June.
The tech-heavy Nasdaq led much of the overall advance amid a frenzy for AI-related stocks. It surged 12.8 per cent in the first half of the year, closing at 26,213.7 points.
The index recovered from early losses caused by the war in Iran, to jump 15 per cent in April, its best monthly performance in five years, driven by explosive earnings from chipmakers companies, with the gains extending into early summer.
London has been unable to reclaim its record closing high, although it has gotten close.
The Square Mile lacks the tech stocks which have powered much of the rally in the US and across markets in Asia.
London’s major mining stocks have helped underpin the overall advance as wider global sentiment improved after the peace deal between the US and Iran and the fragile truce which followed it.
An outbreak of dealmaking activity centred on five stocks on the top-tier index – financial giants Schroders and Beazley, Segro, the real estate trust, Intertek, the industrial testing group and DCC, the energy sector marketing specialist – has also pushed London higher.
The big-name firms looked like good value to international buyers as the FTSE 100 has continued to lag its trans-Atlantic rivals.
The blockbuster offers, worth a total of around £150bn, have looked like a bargain hunting bid bonanza to City experts, rather than a full-throated cry of confidence in the London market.
Famous name bows out
Schroders changing hands created the biggest shockwaves.
The stalwart financial services house has a 200 year history in the Square Mile and has been one of its most revered names for generations. It is being taken out in a near £10bn recommended deal from US asset manager Nuveen, expected to close in the fourth quarter.
Dan Coatsworth, head of markets at stockbroker AJ Bell, said: “Takeovers ruled the roost on the UK stock market” into the peak of summer.
“A key reason for the plethora of bids … was the UK market effectively being on sale. That valuation anomaly is now less prominent, but there continue to be gems seized upon by buyers taking a longer-term view.”
The FTSE 100’s laggards were rooted in the domestic UK economy as it struggled to find sustained growth.
Housebuilders moved to the bottom of the market, as the Iran war energy shock upended hopes for interest rate cuts from the Bank of England by stoking a wave of inflation via soaring energy prices. The prospect of stubbornly expensive mortgages reverberated across the sector, pulling it to the bottom of the market.
The mid-cap FTSE 250, seen as more representative of the domestic UK economy, rose 3.1 per cent in the first half of the year, ending June on 23,013.4 points.
The index was buoyed by Raspberry Pi, Ceres Power and CMC Markets.