It’s not often the UK stock market gets to blow its own trumpet but in September the FTSE 100 was the best-performing major global index, gaining 2.3%, while Germany’s Dax lost 3%, the S&P500 lost 4% and the tech-heavy Nasdaq 100 ended the month 4.5% lower.

Key drivers of international weakness were the continued rise in bond yields, which is particularly negative for the valuation of growth companies, and concerns over a resurgence of inflation as oil prices topped $90 per barrel.

However, the big increase in crude prices was good news for the FTSE for a change as it pushed the price of index heavyweights BP (BP.) and Shell (SHEL) up 9% and 8% respectively.

There were also strong performances from pharmaceutical major GSK (GSK), miners Glencore (GLEN) and Anglo American (AAL), banking groups HSBC (HSBA) and Barclays (BARC) and media firm RELX (REL).

And there is further reason to cheer, as according to Bloomberg the dollar market value of UK listed stocks amounted to $2.9 trillion at the end of last month against $2.93 trillion for the French market.

It’s a far cry from earlier this year, when the French stock market was riding high with a market value of $3.5 trillion buoyed by enthusiasm for luxury goods companies and the prospect of the Chinese economy reopening while the UK was the most unloved market globally according to a survey of investors carried out by Bank of America.

Now, strategists at major banks are turning positive on the UK market thanks to its lowly valuation – on a forward price-to-earnings (PE) ratio, the FTSE 100 currently trades at a 35% discount to the MSCI World Index according to Bloomberg – and signs inflation is cooling, meaning the Bank of England may no longer need to raise interest rates at its next meeting on 2 November.

Barclays’ strategist Emmanuel Cau goes so far as to call UK stocks ‘a good place to hide’ and says energy exposure – which accounts for 14% of the FTSE 100 – and easing inflation could start to reverse the outflows from the stock market, while HSBC’s Max Kettner turned a buyer of UK equities this month for the first time since early 2021.

In contrast, the economic slowdown in China is having a negative effect on analyst and investor sentiment in French luxury stocks, and with Hermes (RMS:EPA), Kering (KER:EPA), L’Oreal (OR:EPA) and LVMH (MC:EPA) making up a fifth of the value of the CAC index it may only be a matter of days before the market cap of the UK market overtakes France once again.

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