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FTSE 100 and FTSE 250 attract capital as investors rethink US valuations

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FTSE 100 and FTSE 250 attract capital as investors rethink US valuations

Global investors are rotating into FTSE 100 and FTSE 250 as stretched US equity valuations, sector mix, yields, and FX stability make UK stocks look undervalued.

Summary

  • International investors are reallocating from expensive US mega-caps into FTSE 100 and FTSE 250 as valuation spreads widen.
  • UK indices offer lower price-to-earnings ratios, higher dividends, diversified sectors, and global revenue exposure versus concentrated US tech.
  • Stable pound dynamics and a gradual Bank of England policy path support UK equity appeal amid broader portfolio rebalancing.

The FTSE 100 and FTSE 250 indices are drawing increased international capital as investors reassess elevated US equity valuations, according to recent market analysis.

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Fund managers have begun rotating into British assets amid concerns over pricing levels in US mega-cap shares, market data shows. The shift reflects a widening valuation differential between the two markets.

The S&P 500 currently trades at a premium to historical averages, while UK indices display lower price-to-earnings ratios and higher dividend yields, according to market metrics.

The FTSE 100 maintains significant exposure to energy, financial and commodity sectors, which provide global revenue streams and inflation-resistant characteristics. The FTSE 250 consists primarily of domestically focused mid-cap companies positioned to benefit from stabilizing UK inflation and potential improvements in consumer confidence.

Currency factors have also influenced investment decisions. The pound’s relative stability has reduced volatility risks for overseas investors and enhanced the attractiveness of UK-listed multinational corporations, analysts noted.

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US markets have outperformed global indices in recent years, propelled by artificial intelligence developments and technology sector earnings growth. However, concentration risks have increased as a small number of large-cap stocks now account for a substantial portion of market returns, prompting diversification efforts among institutional investors.

UK equities offer broader sector distribution and defensive investment characteristics, with dividend payouts exceeding those of US counterparts, according to comparative market data. Global asset allocators are reassessing regional portfolio allocations, with lower relative valuations potentially providing downside protection in the event of slowing global growth.

The Bank of England’s monetary policy trajectory represents an additional consideration, with market expectations pointing toward gradual interest rate adjustments that could support equity valuation multiples.

While capital flows remain subject to rapid shifts, the current trend indicates a broader portfolio rebalancing as international investors reconsider UK markets following an extended period of underperformance relative to other developed markets.

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Continued valuation disparities could sustain inflows into UK equities, with the FTSE 100 and FTSE 250 positioned to benefit from ongoing global portfolio diversification strategies, market observers stated.

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Crypto World

Starknet Taps EY’s Nightfall for Institutional Privacy on Ethereum Rails

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Ethereum, Privacy, DeFi, zk-STARK, Institutions

Starknet developer StarkWare has integrated EY’s Nightfall privacy protocol to let institutions run private payments and decentralized finance (DeFi) activity on public Ethereum-aligned rails, targeting banks and corporates that need confidentiality without giving up auditability. 

In a Tuesday release shared with Cointelegraph, StarkWare positioned the move as a way for enterprises to use a shared, open layer-2 rather than closed, bank-only networks, while working with a Big Four firm that already audits many of the organizations it wants to onboard.

The integration brings Nightfall, an open-source zero-knowledge (ZK) privacy layer built by EY, that lets transactions be verified without revealing underlying data, onto Starknet to enable private B2B and cross-border payments, confidential treasury management and 24/7 tokenized asset transfers onchain.

StarkWare said that institutions will also be able to access Ethereum DeFi for activities such as lending, swaps and yield strategies, with transactions private by default but supporting selective disclosure, auditability and Know Your Customer (KYC) protocols.

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Related: Arbitrum, Optimism and Base weigh in after Vitalik questions L2 scaling model

Starknet and Nightfall target institutional flows

StarkWare frames this as a “major breakthrough” in making public blockchains usable for institutional capital that has so far been deterred by full onchain transparency and the resulting compliance and competitive risks.

Eli Ben-Sasson, StarkWare co-founder and CEO and a founding scientist of privacy-focused cryptocurrency Zcash (ZEC), said in the release that blockchains could give every institution “the equivalent of a private superhighway for stablecoins and tokenized deposits,” positioning Nightfall on Starknet as a concrete step toward that vision. 

Alex Gruell, StarkWare’s global head of business development, told Cointelegraph that Nightfall was “particularly useful for institutions requiring ready-to-go KYC verification as part of their onboarding to the blockchain,” and part of a broader privacy push on Starknet.

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Ethereum, Privacy, DeFi, zk-STARK, Institutions
Alex Gruell, global head of business development. Source: StarkWare

He said that while crypto native teams had “moved mountains” building ZK infrastructure, the EY-built system added a complementary layer of institutional credibility and “regulatory fluency.”

Related: Vitalik Buterin tempers vision for ETH L2s, pushes native rollups

Gruell also cast Starknet plus Nightfall as an interoperability layer between institutions, contrasting it with what he claimed are “siloed” institutional environments on rival networks, which he said “do not serve as an interoperability infrastructure,” and permissioned models such as Canton Network, which are “not yet integrated with the Web3 ecosystem.”

He stressed that Nightfall would remain permissionless and fully integrated into Starknet, with a staged rollout, where initial deployment focused on “private payments and transfers with compliance gating and secure sequencing in place,” while “verifier upgrades and expanded functionality follow as the system scales.”

Starknet’s growth and teething trouble

Starknet has steadily grown into one of the larger ZK rollups by total value locked (TVL), currently about $280 million, with usage primarily driven by DeFi protocols and native ecosystem apps. 

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At the same time, Starknet’s rapid scaling push has exposed reliability challenges. In 2025, the network suffered major outages tied to sequencer and infrastructure issues, prompting public post-mortems and commitments to harden reliability before courting more institutional flow. 

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