Despite volatile oil prices and supply chain shocks, market sentiment remains high this month — particularly on the FTSE 250.
I was surprised to see the mid-cap index is up around 3.5% over the past month. Meanwhile, the FTSE 100 has only grown around 1%.
It gets more of its earnings from overseas, so it doesn’t move as much when the UK economy improves.
Whereas, the UK-facing businesses on the 250 tend to benefit when domestic growth, borrowing costs, and consumer sentiment improve.
So, is it time to cycle back into more domestic stocks?
Why is the FTSE 250 gaining?
Analysts point to a possible domestic recovery trade. Mid-caps are trading at valuation discounts and offer more earnings potential if the local economy improves.
It appears investors are moving into smaller British companies after years of outflows from small- and mid-cap funds.
But the economy is still the key risk. Higher borrowing costs, mortgage resets, and cautious consumers can hurt domestically focused companies more than global earners.
The FTSE 250 has likely moved faster because it’s more sensitive to these factors. That means it can lead when sentiment improves, but it can also change quickly if the economy weakens.
So what does this mean for UK investors today?
What stocks to look at?
easyJet has been the biggest winner over the past month, up 48.5%. But with profits closely tied to volatile oil prices, it’s risky.
Softcat has also done well, but now with a price-to-earnings (P/E) ratio of 26, looks overpriced.
In my opinion, one stock that looks highly appealing right now is Curry’s (LSE: CURY). Since late 2023, its market cap has more than tripled, from below £500m to almost £1.6bn today.
And yet despite such growth, it has a P/E-to-growth (PEG) ratio of just 0.02. Could it really be that cheap? Possibly — analyst consensus estimates the shares are trading around 21.1% below fair value.
A promising future
Curry’s looks on track for another year of steady progress. The next full-year results are due on 2 July 2026, and management expects full-year adjusted profit before tax of about £191m, up roughly 18% year on year.
That’s ahead of previous guidance. Meanwhile, group like-for-like sales are expected to rise 4%, with net cash finishing above £170m.
However, when boss Alex Baldock announced his departure earlier this year, the stock took a hit. He will be replaced by Fredrik Tønnesen on 3 August 2026.
Tønnesen has been CEO of Currys’ Nordics business since 2023, which contributes around 40% of group revenue. But a big executive change like that always brings risk, so that’s worth keeping a close eye on.
My verdict?
It’s great to see the FTSE 250 doing well, as it indicates improving sentiment in the local economy. But that can also change more quickly than the globally diversified FTSE 100.
While Curry’s looks like an appealing stock to consider right now, it should be balanced with a few larger caps to reduce risk.
Building a dense foundation of large caps helps to anchor a portfolio when smaller mid-caps make rapid moves. At the same time, these mid-caps are the ones that can lead to outsized gains when sentiment improves.
Should you invest £5,000 in Currys Plc right now?
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Mark Hartley owns shares in Curry’s and easyJet.
