The FTSE 100 has broken above 10,000, marking a new high for the index and confirming a shift that has been building for several weeks. Unlike previous moves dominated by a narrow group of defensive stocks, this one is being powered by a mix of retail, energy, and defence, sectors that are all seeing renewed investor focus.
Next set the tone with a strong Christmas trading update, raising its profit guidance after better-than-expected sales. This move alone has pulled attention back to UK retail, with Sainsbury’s, Tesco and Ocado all trading higher on expectations of similar resilience.
In parallel, oil majors BP and Shell are gaining ground as oil prices stabilise and geopolitical risks return to the fore. Disruption in South America has reminded markets that global supply is not guaranteed, and companies with scale, diversification and strong balance sheets are back in favour. Both BP and Shell continue to return capital through dividends and buybacks, making them well suited to the current investor environment.
Defence stocks are also seeing new momentum as military spending expectations rise. Conflict risk has shifted up the agenda, and investors are re-pricing the companies positioned to benefit. These gains are being supported by contract pipelines and expected budget increases.
Fidelity Special Values PLC (LON:FSV) aims to seek out underappreciated companies primarily listed in the UK and is an actively managed contrarian Investment Trust that thrives on volatility and uncertainty.
