The Week in Numbers
A week of reversals. The FTSE 100 fell around 1% while the FTSE 250 slipped 0.5%, but the index moves tell only part of the story. Beneath the surface, the market was rotating sharply out of energy, consumer staples and defensives and into industrials, travel and growth. The same geopolitical backdrop that has dominated markets for weeks produced yet another twist, with the Iran peace deal collapsing before it had properly begun. Those who positioned on last week’s optimism spent this week unwinding it.
The Big Story: The Deal That Fell Apart
Talks between the US and Iran were scheduled to begin in Switzerland on Friday, following the memorandum of understanding that started the 60-day countdown for a formal peace agreement. That timetable collapsed before negotiations had properly started. The Strait of Hormuz remains closed, and while analysts have estimated the route accounts for roughly a fifth of global seaborne energy flows, the precise supply impact depends on how much rerouting and storage drawdown has offset the disruption something markets are still calibrating.
The practical effect this week was another round of headline-driven repositioning. Price action in oil suggests it is positioning, not fundamentals, driving crude, with each diplomatic headline forcing short-term repositioning rather than a genuine repricing of supply. Shell was among the biggest FTSE 100 fallers over the week, down over 7%, as the structural case for crude at elevated prices weakens the longer alternative supply routes bed in. The Hormuz situation may resolve, but investors who trade it as a binary event will keep getting caught in the whipsaw.
FTSE 100 Risers
Rolls-Royce (LON: RR.) +7.7%
The week’s standout performer, with a clear primary catalyst. Rolls-Royce’s small modular reactor unit secured a contract to build Sweden’s first new nuclear power capacity in over 40 years, with Videberg Kraft the joint venture between Vattenfall and Industrikraft, selecting Rolls-Royce SMR following a four-year selection process that assessed over 75 options. Three reactors will be built on Sweden’s west coast, adding around 1,500 MWe of clean baseload capacity.
Rolls-Royce CEO Tufan Erginbilgic said: “Selection by Videberg Kraft reinforces the status of Rolls-Royce SMR as the only company with multiple contractual commitments to deliver SMR units in Europe.”
Sweden is now the third European country after the UK and Czech Republic to select Rolls-Royce SMR technology. The pipeline is becoming a delivered order book, which is a rather different thing. A secondary tailwind came from improving Iran sentiment mid-week, which reduces near-term risk to international flying hours and civil aerospace earnings. The SMR win was the primary driver though. Civil aerospace, defence order book, SMR pipeline: all three divisions are now firing simultaneously.
Informa (LON: INF) +7.2% and IMI (LON: IMI) +7.1%
Two very different businesses moving in the same direction for the same underlying reason. Informa, the events and academic publishing group, has been quietly compounding as in-person conferences normalise post-pandemic and its subscription data business grows. IMI, the precision engineer, is benefiting from structural demand in industrial automation, specifically fluid controls used in energy transition infrastructure. Both are asset-light, high-margin, and largely insulated from domestic UK consumer weakness. In a week where sentiment shifted toward quality growth over defensive yield, both attracted institutional flows. The rotation into names like these,unglamorous, consistent, internationally diversified is a more durable signal than a commodity price spike.
Standard Chartered (LON: STAN) +6.4%
The emerging markets-focused bank had a strong week, benefiting from improving sentiment toward Asia-Pacific growth and a moderating dollar. Standard Chartered’s revenue base is heavily weighted toward markets that benefit when US rate expectations soften. With the Bank of England holding and the Fed appearing to signal patience under new chair Kevin Warsh, sentiment toward EM-exposed financials improved this week, though how durable that shift proves depends on the path of US inflation data.
Taylor Wimpey (LON: TW.) +6.0%
A housebuilder as a top five FTSE 100 riser is the week's most surprising entry. The Bank of England voted 7-2 to hold rates at 3.75%, removing the immediate threat of a hike that would further squeeze mortgage affordability. Taylor Wimpey, trading near multi-year lows, had been pricing in considerable pessimism. At these valuation levels, the removal of a near-term negative is amplified. A 6% move on a hold decision is consistent with a stock that had been pricing in significant rate risk. Whether that re-rating holds depends entirely on what the MPC does next.
FTSE 100 Fallers
Entain (LON: ENT) 9.1%
The biggest FTSE 100 faller this week, continuing a miserable year. Entain’s problems are structural: a £200 million annual cost hit from new UK gambling taxes announced in last year’s Budget, an ongoing legal overhang from international operations, and a management team still rebuilding credibility after a turbulent period. No specific news catalyst this week. The stock is simply being repriced lower as the earnings recovery timeline extends. Down more than 25% in 2026, some analysts have pointed to valuation support at current levels, but the risk-reward remains difficult to assess until the legal picture clears. Not a natural income holding.
Tesco (LON: TSCO) 7.2%
Tesco reported 1.8% year-on-year like-for-like UK sales growth for the first quarter of its new financial year, a miss against analyst expectations, despite the company reaffirming full-year profit guidance. In a week where defensives were being sold regardless, a modest sales miss was enough to accelerate the move. The business is fundamentally sound, but coming into the week at a full valuation, it needed to beat. It did not.
Shell (LON: SHEL) 7.1%
Shell’s weekly fall reflects two distinct pressures. The first is the oil price itself. With the Iran deal stalled, Brent has settled into a range significantly below the conflict-era highs and Shell’s earnings power has compressed accordingly. The second is sector rotation: in a week where growth and industrials attracted flows, energy was a source of funds. Shell’s dividend remains covered and its capital return programme intact, but income investors should be clear-eyed that the windfall earnings of the past two years are behind it.
Marks and Spencer (LON: MKS) 6.9%
M&S went ex-dividend during the week, which accounts for a mechanical portion of the move. The rest reflects profit-taking after a strong run. The stock had re-rated significantly over the past year on the back of a genuine operational recovery. No new negative catalyst here. This looks like the market consolidating gains rather than reassessing the investment case.
BT Group (LON: BT.A) 6.6%
BT’s slide reflects the core tension in the investment case: a business carrying significant debt through an expensive network upgrade cycle, in an environment where rates are staying higher for longer than originally modelled. The 7-2 MPC vote split, with two members pushing for an immediate hike, is a direct reminder that the rate relief BT needs to fully rehabilitate its balance sheet is not coming quickly. The dividend yield remains attractive in absolute terms but the path to earnings recovery has lengthened
FTSE 250 Risers
Raspberry Pi (LON: RPI) +9.9%
The best-known name in accessible computing had a strong week with no specific news catalyst. Raspberry Pi has built genuine commercial traction since its 2024 IPO. Beyond the hobbyist market and the nation’s teenagers its chips are embedded in industrial automation, smart metering and medical devices. The move looks momentum-driven, with the stock continuing to attract buyers who see it as a rare UK-listed tech name with a defensible global niche and real revenue.
FirstGroup (LON: FGP) +9.6%
FirstGroup moved sharply this week with no obvious public catalyst. The transport operator runs buses and trains across the UK and US and has been quietly rebuilding after years of underperformance. The business is simpler, less leveraged and more cash-generative than it was five years ago. At this magnitude the move is consistent with institutional positioning or quiet anticipation of something upcoming, but nothing has been announced. One to keep an eye on.
Wizz Air (LON: WIZZ) +8.9%
The low-cost carrier surged as travel and leisure names benefited from the broader risk-on rotation. Wizz Air’s network is heavily weighted toward Central and Eastern Europe, where any improvement in the Middle East situation directly benefits route economics and load factors. The stock is well below its pre-conflict highs. How much of that gap closes depends entirely on whether the geopolitical backdrop improves, which as this week demonstrated, is far from certain.
FTSE 250 Fallers
SDCL Efficiency Income Trust 25.8%
The week’s most dramatic fall and the most directly relevant story for income investors. SDCL published a circular this week asking shareholders to vote on a formal wind-down at a general meeting on 10 July, simultaneously scrapping its dividend and suspending future payouts while debt is reduced. The trust cited a persistent discount to NAV, gearing that had risen to 71.9% of net asset value above its 65% policy limit, and clear shareholder feedback favouring capital return over continuation.
SDCL was once a 14% yielder and a flagship name in energy efficiency infrastructure. The combination of rising rates, illiquid assets and a balance sheet that exceeded its own covenants has ended in a wind-down. The broader lesson for income investors is one worth repeating: a high headline yield is not the same as a safe yield. When the discount to NAV is wide and gearing is elevated, the income is priced that way for a reason.
Rathbones 17.9%
Rathbones shares fell sharply after the wealth manager disclosed a regulatory review, commissioned following engagement with the FCA, that identified shortcomings in how its UK wealth management business had implemented Consumer Duty rules. The remediation programme will cost an estimated £60 million over two years, and the firm has paused onboarding of new clients requiring enhanced due diligence for up to twelve months. An additional £9 million hit to 2026 underlying profit follows from the decision to stop charging management fees on cash balances.
CEO Jonathan Sorrell said: “We are committed to operating to the highest standards on behalf of our clients. The work we are undertaking will support and accelerate our vision to be the best wealth manager in the UK, by far.”
The dividend policy is unchanged and a £20 million buyback has been approved, a signal that management views this as a correctable operational issue rather than a structural problem. The FCA’s Consumer Duty regime is proving to have genuine teeth. Rathbones is unlikely to be the last wealth manager to face this kind of scrutiny.
PPHE Hotel Group 16.4%
PPHE shares fell sharply after the company confirmed that a takeover proposal from Fattal Hotel Group had collapsed, following opposition from Euro Plaza Holdings, which controls approximately 33% of PPHE’s share capital. Fattal had proposed £22 per share in cash. With that bid now dead, PPHE trades back on fundamentals a quality hotel portfolio with solid revenue growth, but no near-term catalyst and a share price that had been pricing in a deal premium.
Frasers Group 10.3% and Pets at Home 9.2%
Both moves are macro-driven rather than stock-specific. Frasers is sensitive to discretionary spending expectations, and in a week where consumer staples were being sold, the discretionary names fared worse. Pets at Home faces a more specific structural headwind: pandemic-era pet adoption has normalised and the elevated demand that inflated growth metrics during 2021 to 2023 is not coming back. All those lockdown puppies are now just expensive dogs.
Global Signals
Oil is stuck in no man’s land. Brent is trading in a range that reflects neither a clean resolution nor a full supply shock, and until the Hormuz situation is formally settled that uncertainty persists. For FTSE investors, energy stocks are moving more on diplomatic headlines than supply data right now. In that environment, short-term price moves tell you more about positioning than about the underlying investment case.
The Bank of England held at 3.75% but two MPC members voted for an immediate hike to 4%. If UK services inflation does not continue falling, that minority becomes a majority faster than the market is pricing. Infrastructure trusts, REITs and heavily indebted names are the most exposed.
Andy Burnham won the Makerfield by-election and is now in Parliament with reported backing to trigger a formal challenge to Keir Starmer. Political uncertainty at this level typically weighs on sterling and supports internationally earning FTSE 100 names over domestic-facing mid-caps. The pound is the instrument to watch. British politics: never boring, rarely reassuring.
UK retail sales beat expectations at +1.2%, but public sector borrowing of £23.3 billion in May was above forecast, narrowing the Chancellor’s fiscal room. The consumer is holding up. The public finances less so.
The broader read: the FTSE spent this week rotating away from the pure geopolitical trade. If the Iran situation stabilises, even partially, the next leg of the market will be driven by earnings and domestic fundamentals rather than oil. That is a healthier market and one where stock selection matters more than index positioning.
One to Watch: SDCL Wind-Down Vote = 10 July
The 10 July general meeting is a formality given board and major shareholder support. The more interesting question is what happens to SDCL's assets and what price they achieve in the current market. Earlier disposals were completed at a 9% discount to carrying value. If the asset realisation process disappoints, the cash return to shareholders could fall meaningfully short of NAV, as that earlier precedent suggests is a real risk. For income investors holding similar infrastructure trusts, this is the sector stress test worth watching closely.
The Week Ahead
Any formal Labour leadership challenge moves sterling and domestic-facing sectors immediately. On Iran, watch for Swiss back-channel reporting: any resumed diplomatic contact reverses the energy and mining trade again. The Federal Reserve minutes land midweek, and with the Fed under new chair Kevin Warsh, any language shift on rate trajectory will move global risk assets. OPEC+ output signals are also worth monitoring as the Hormuz situation evolves.
Thanks for reading,
Ollz
This article is for informational and educational purposes only and does not constitute financial advice. The author may hold positions in securities mentioned. Always do your own research and seek independent financial advice before making any investment decision. Capital is at risk.