Fresnillo, Burberry Shine in Best Year for UK Stocks Since 2009

UK Equities 2025: Strong Gains and Market Outlook

UK equities closed 2025 with strong gains, with the FTSE 100 on track for a 21% annual return, its best performance since 2009. Mining shares, in particular, benefited from stabilized metal prices after a recent pullback. The index edged up 0.4% in its final sessions, reflecting a year of broad gains across financials and miners.

Fresnillo PLC, the UK-listed mining giant, closed the year with a 460% gain in US dollar terms, driven by a record surge in silver and gold prices. JPMorgan reiterates an Overweight rating and a GBP43.00 price target, citing long-term structural demand for precious metals.

UBS analysts predict a return to earnings growth for European stocks in 2026. They highlight insurance companies like Aviva and Admiral Group as top picks, citing strong cash flows and dividend yields.

Why Did This Happen?

The strong performance of UK equities in 2025 reflects a mix of policy support, undemanding valuations, and improved earnings expectations. UBS estimates a 7% average rise in European stock earnings for 2026, compared to a 10–11% consensus.

Precious metals prices surged, with gold reaching over $4,500 per ounce and silver hitting $79. This was driven by rate cuts, central bank gold purchases, and geopolitical uncertainty.

How Did Markets React?

UK mining stocks were among the standout performers. Fresnillo shares climbed 4.6% on the final trading day of 2025, while Glencore and Anglo American also gained as metal prices stabilized.

UBS identifies structural investment and fiscal expansion as key drivers for European equity markets in 2026. The bank recommends investors focus on firms benefiting from productivity gains and AI adoption.

What Are Analysts Watching Next?

JPMorgan has placed Fresnillo on its Positive Catalyst Watch for 2026, noting potential volatility from index rebalancing but a long-term bullish outlook. UBS warns against overexposure in autos, chemicals, and household products, citing structural and cyclical headwinds like margin pressure and inventory overhang.

Analysts are also monitoring the impact of tighter mining regulations in Mexico, where Fresnillo operates. While regulatory changes may pose short-term risks, the firm has started diversifying its operations, including acquiring Canada's Probe Gold. Precious metals remain central to the outlook for mining and related stocks. JPMorgan and UBS both emphasize the role of gold and silver as strategic assets for 2026, given their role in inflation hedging and central bank strategies.