Market Overview

Dear Investor,

The “Burnham Bounce”, the “Coronation Effect”, or perhaps simply summertime complacency. Whatever you choose to call it, an air of calm spread across UK financial markets this week. The FTSE rallied, sterling strengthened and gilt yields stabilised as investors grew increasingly comfortable with the UK’s political and economic backdrop.

Markets rarely need everything to be perfect, they simply need the outlook to become a little less uncertain. Only a few weeks ago, investors were worrying about another inflation shock, surging oil prices and escalating conflict in the Middle East. Today, those fears have eased considerably, allowing attention to drift back towards corporate earnings and the broader economic picture.

Whether this proves to be the start of a more sustained period of optimism remains to be seen. But for now, the market’s message is a simple one: stability, even if it’s only temporary, is something investors are prepared to reward.

Wishing you a great weekend,

Tom

Market Movers

On the rise: Trustpilot (LSE:TRST) +16.2% on the week

Trustpilot moved higher this week after announcing a significantly expanded partnership with Shopify, strengthening its position at the heart of one of the world’s largest ecommerce ecosystems.

The announcement also reinforces the company’s broader growth story. Trustpilot has spent the past few years successfully transitioning from a fast-growing platform into a profitable software business, with revenues continuing to grow at over 20% annually while margins steadily improve. Shopify’s enormous merchant base provides another avenue for customer acquisition, helping strengthen Trustpilot’s network effect as more businesses and consumers engage with the platform.

Regency View: The shares already trade on a premium valuation, so execution still matters. However, partnerships like this suggest Trustpilot is strengthening its competitive position rather than simply growing revenues.

On the slide: Berkeley Group (LSE:BKG) -6.8% on the week

Berkeley Group came under pressure this week after becoming one of several major UK housebuilders named in a proposed multi-billion-pound class action lawsuit alleging anti-competitive conduct within the new-build housing market.

The news weighed on the wider housebuilding sector, with Persimmon, Barratt Redrow, Taylor Wimpey, Bellway and Vistry also trading lower. While the financial impact remains uncertain, investors dislike legal uncertainty, particularly when it carries the potential for substantial financial liabilities and reputational damage.

Regency View: At this stage, the lawsuit is more about uncertainty than certainty. Until investors have greater clarity on whether the claim progresses and what any potential financial impact could look like, it’s unlikely the sector will receive much benefit of the doubt.

Sector Snapshot

Tech moved back to the top of the leaderboard this week, closely followed by Industrials and Healthcare, suggesting investors are once again becoming more comfortable with growth and economically sensitive sectors. Financials also posted a solid gain, while Consumer Staples held onto positive territory, giving the market a healthy mix of cyclical leadership and defensive support.

At the weaker end, Energy and Telecoms were the main laggards, with Materials also drifting lower after several volatile weeks. Utilities edged into negative territory, while Real Estate and Consumer Discretionary were little changed. Overall, the market feels more balanced than in recent weeks, with leadership broadening beyond a single dominant theme.

UK Price Action

It’s been an encouraging week for the FTSE, with Thursday’s session delivering a decisive break and close above the resistance level that has capped the market for the past month. After several weeks of choppy, rangebound trading, this is the clearest sign yet that buyers are beginning to regain control. Just as importantly, Friday’s price action has so far held onto those gains rather than immediately slipping back into the range.

The focus now shifts to whether the breakout can build momentum. A sustained move above this area would put the March highs back into view and suggest the correction from earlier this year has largely run its course. As always, breakouts need follow through, but for the first time in several weeks, the technical picture has turned meaningfully more constructive.