The FTSE 100 gained in early trade on Friday and looked set to close the week out on a high as European shares rallied amid rising investor sentiment.

London’s leading index was 0.4% higher at the time of writing as the German DAX added another 0.7%.

“European shares are largely holding onto yesterday’s gains, which saw Germany’s DAX reach a record high, with several other European indices closing at levels not seen since just before the Great Financial Crisis,” said Derren Nathan, head of equity research, Hargreaves Lansdown.

“It’s too early to call the end of US exceptionalism but there are signs that investors are looking to diversify.”

While there may be an element of rotation into European shares, it’s certainly not at the expense of US stocks that also pushed higher yesterday as a wave of optimism lifted all boats and took the S&P 500 further into positive territory on the year.

“The S&P 500 index extended its impressive winning streak to a seventh consecutive session, closing yesterday with a gain of nearly 0.41%, reflecting a significant improvement in investor sentiment,” said Linh Tran, Market Analyst at XS.com.

“The rally was primarily driven by renewed optimism over monetary policy easing and positive signals from U.S.–China trade relations, which have long been a major source of market uncertainty.”

FTSE 100 movers

AstraZeneca was the biggest contributor to the FTSE 100 gains in terms of the number of points, with a 1.7% gain as investors picked the stock up after recent selling driven by tariff concerns. GSK shares rose 1.6%.

St James’s Place was the FTSE 100 top riser after JPMorgan analysts bumped their price target up to 1,310p, maintaining its overweight rating.

Land Securities fell 1.6% despite releasing fairly respectable final results underscored by 5% rental growth.

“Land Securities was the biggest FTSE 100 faller despite reassuring investors that it hadn’t seen an impact of economic uncertainty on customer demand or investment markets,” explained Russ Mould, investment director at AJ Bell.

Housebuilders Taylor Wimpey, Persimmon, Barratt, and Redrow were all flat or marginally lower. The sector has gained substantially since the Trump-induced volatility and has begun to flatline in recent sessions.

Mining shares were also lower and acted to offset gains elsewhere in the FTSE 100. Glencore and Antofagasta were both down less than 1%.

Fresh research from analysts at asset manager Aberdeen reveals that the UK small companies valuation discount has narrowed amid an onslaught of takeover interest from overseas entities keen to capitalise on the low valuations of exciting UK companies.

Aberdeen’s research from February 2025 had identified UK small caps as the most undervalued stocks globally when comparing current 12-month forward price-to-earnings ratios against their 10-year averages. UK small caps were trading at a steep 23.4% discount to their historical average, compared to just a 3.2% discount for global smaller companies overall.

However, recent months have seen this valuation gap narrow considerably for UK small caps, with the discount shrinking to 14.6%.

Meanwhile, the MSCI ACWI Small Cap index—representing global smaller companies—has seen its discount widen to 30.3%. According to the latest data through April 30, 2025, smaller companies in Asia (excluding Japan) now face the largest regional discount at 42.9% below their historical average.

One of the driving forces behind the narrowing of the UK smaller company valuation discount is the £15 billion worth of bids for smaller companies recorded so far in 2025, mostly from overseas corporate entities.

Small and mid-caps have received the lion’s share of the bid interest. Of the 15 transactions announced in 2025 year-to-date, six were for FTSE 250 companies, four for FTSE Smallcap firms and four for AIM companies.

“The UK continues to be a happy hunting ground for both corporate and private equity bidders, due to low valuations and willing sellers,” said Amanda Yeaman, co-manager of the abrdn UK Smaller Companies Fund and the abrdn UK Smaller Companies Growth Trust plc.

“It is notable that corporates have been the main acquirors, which shows the attractiveness of UK companies and suggests confidence in the economic outlook and the interest rate environment. Currently there are willing buyers (attracted by the valuations available and the probability of a successful conclusion) and willing sellers. The scale of M&A and lack of IPOs is resulting in reduction in the number of UK-listed growth companies, illustrating the tension between the clear value in the market, but the shrinking asset pool.”

eEnergy Group has announced a significant partnership with US-based Redaptive Inc. worth up to £100 million to fund energy efficiency projects across the UK.

The arrangement establishes eEnergy as a key delivery partner for Redaptive in the British market.

Under the deal, Redaptive will finance approved customer projects spanning all client sectors, whilst eEnergy will manage operations and handle warranty and service obligations. This collaboration leverages eEnergy’s strong presence in large-scale LED and solar installations to accelerate Redaptive’s UK expansion.

Denver-headquartered Redaptive, established in 2015, brings substantial experience in funding and installing energy-saving equipment for major clients, including T-Mobile and Iron Mountain.

The agreement provides eEnergy with a base to expand its operations across both public and private markets. Unlike their existing NatWest facility, which serves only public sector projects, the Redaptive partnership opens up both the public and private sectors. Perhaps most importantly, eEnergy will receive full payment upon project completion, substantially improving cash flow. 

“This is a game-changing partnership,” said Harvey Sinclair, eEnergy CEO.

“Redaptive’s decision to  provide up to £100m unlocks a massive growth opportunity for eEnergy, giving us the firepower to deliver more funded decarbonisation projects, faster, and across every sector. As their lead UK delivery partner, we’re not just accessing capital – we’re joining forces with a global player to deliver scale. This enables us to accelerate our mission, remove financial barriers, and bring clean energy solutions to more organisations on their path to Net Zero than ever before.”