UK Stocks Ride Global Rally on Trade and Rate Optimism

27 June 2025

London Stock Exchange headquarters · Reuters

London’s equity markets surged on June 27, driven by a wave of global investor optimism around easing trade tensions, improved earnings forecasts, and signs of a favourable monetary policy trajectory. The FTSE 100 climbed 0.5%, while the domestically focused FTSE 250 gained 0.6%, marking its highest level in ten months and positioning it for the strongest weekly performance since mid-May.

Investor sentiment lifted across the board, echoed in rising European stock benchmarks and robust gains in Asia-Pacific markets. According to market analysts, these gains were fuelled by expectations that Washington and Beijing would swiftly finalise a rare-earth minerals agreement seen as a potential precursor to broader US-China trade progress and by speculation that upcoming data releases could further solidify a dovish tone from major central banks.

The FTSE indices also benefited from relief over a softening in Middle East geopolitical risk. With the recent Israel-Iran ceasefire holding, safe-haven flows retreated, allowing investors to redirect capital into equities. Notable blue-chip contributors included JD Sports up 6.6% following positive industry cues after Nike’s strong earnings and Unilever, whose shares rose after announcing the US$1.5 billion acquisition of men’s personal care brand Dr Squatch.

Yet the rally wasn’t universal. Precious metals and mining shares declined as gold prices eased specifically, Fresnillo dropped 2.6%, Endeavour and Hochschild slipped 1.8%

Looking ahead, investors will closely monitor US PCE inflation data and statements from the Federal Reserve for clues on the timing of rate cuts. Analysts say that continuing signs of softening trade and a cooling global growth backdrop may reinforce the current rally.