Market Overview

Dear Investor,

While stocks have been holding firm, the bond market has been telling a different story. With the S&P 500 pushing into fresh highs and the FTSE sitting just 3.5% off its peak, you would be forgiven for thinking markets are looking straight through the conflict in the Middle East, but under the surface, there are signs that investors are becoming a little more cautious.

This is where the UK starts to come into sharper focus. Alongside France and Italy, it falls into the camp of economies that do not have much room for manoeuvre, so when borrowing costs rise, the market pays closer attention. The risk is not just higher costs today, but the potential for those costs to compound if confidence wobbles.

For now, equity markets are choosing to focus on momentum, and that has served investors well. The underlying trend remains intact, and periods like this often create selective opportunities rather than broad-based risk. The message from the bond market is worth keeping in the back of your mind, but it is not a reason to step aside, it is simply a reminder to stay focused on quality, positioning and timing.

Wishing you a great weekend,

Tom

Market Movers

On the rise: Intertek (LSE:ITRK) +28.6% on the week

Shares in Intertek (ITRK) moved sharply higher this week after private equity group EQT confirmed it had submitted an indicative proposal to acquire the company, valuing the business at around £7.9bn. The approach, which equated to 5,150p per share, was rejected by the board, with EQT now considering its next steps ahead of a formal deadline in mid May.

This type of situation often creates a period of sustained attention, even if no deal ultimately emerges. With a clear timeline now in place under takeover rules, investors will be watching closely for any further developments, while the current share price is likely to remain sensitive to headlines and speculation around a potential bid.

Regency View: We recommended Intertek to FTSE Investor clients in January, attracted by its strong returns on capital, consistent cash generation and resilient operating model. The emergence of takeover interest has helped reprice that quality, with momentum now firmly back on the side of the bulls as the market reassesses the value of the business.

On the slide: Imperial Brands (LSE:IMB) -9.5% on the week

Shares in Imperial Brands (IMB) fell around 6% this week, slipping to their lowest level since late July 2025, as investors reacted to a cautious tone around the second half outlook despite broadly stable guidance.

Regency View: The fundamentals remain intact, but the market is starting to focus more on what could go wrong than what is already working. With momentum firmly to the downside, the shares are struggling to attract fresh buying interest despite the underlying cash generation.

Sector Snapshot

Tech has dominated this week, surging well clear of the rest of the market and setting the tone. Real Estate and Financials followed with solid gains, while Materials and Industrials also moved higher, reinforcing the shift back towards cyclical exposure and growth-sensitive areas.

At the other end of the spectrum, Utilities and Consumer Staples came under the most pressure, with Healthcare also drifting lower. Energy slipped slightly after its recent strength, continuing the rotation away from defensives and prior leaders as capital is redeployed elsewhere.

UK Price Action

It is a new week and the FTSE has largely tread water, consolidating near its recent highs after the sharp recovery seen earlier this month. Price is now forming a tight flag structure, suggesting the market is pausing to digest gains rather than showing any meaningful signs of rejection. In the context of the broader trend, this type of behaviour typically points to continuation, with the key question now being whether buyers have enough momentum to push through overhead resistance and extend the move higher.