FTSE 100 Week Ahead: Defensives in Focus as AI Jitters and Housing Reform Risks Persist

The FTSE 100 enters the last few days of June in a continued range, after a 1.4% gain in the last week despite a soft finish, closing Friday at 10,508.02, down just 21.87 points on the day.

London outperformed its European peers on Friday as a tech-led sell-off hammered the DAX (-1.3%) and CAC 40 (-0.6%), with concerns over OpenAI’s potentially delayed IPO and rising hardware costs at Apple and Microsoft cooling the AI trade globally.

The FTSE 100’s relative resilience was driven by a rotation into defensives. British American Tobacco attracted buyers on a new buyback, while Tesco, Sainsbury’s and Imperial Brands all firmed. 3i Group was the standout performer, surging ~14% on positive news flow around discount retailer Action.

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On the downside, housebuilders — including Barratt Redrow, Persimmon and Berkeley Group — fell on reports that the government is considering replacing council tax and stamp duty with a single annual property charge. Any official consultation this week could extend those losses; a denial could trigger a bounce.

BP, Shell, and the energy sector remain under pressure with Brent crude hovering near $70/bbl, although given the latest US-Iran developments, with strikes being exchanged over the weekend, we could see oil prices climb once again, lifting those names.

Rightmove and Berkeley Group‘s relegation to the FTSE 250 underscored lingering concerns about the shrinking UK-listed universe.

The macro backdrop offers modest support. The Bank of England held rates at 3.75% on 18 June (7-2 vote), citing easing Iran-conflict tensions and a steady, if uncertain, inflation picture.

This week’s agenda shifts to data: US ISM figures and non-farm payrolls will drive risk appetite, alongside the opening salvos of the Q2 US earnings season. It is also a shortened week for US stocks as Friday is a public holiday.

Cautiously constructive remains the right stance — but the AI volatility means complacency would be ill-advised.