Top FTSE 350 Risers & Fallers Last Quarter

Q2 was rocky for UK stocks in general, with political issues weighing more on the FTSE 350, though the first days of trading in Q3 suggest traders are looking to put geopolitics in the rear-view mirror and catch up with other indices.

Top FTSE 350 Movers in Q2

Risers

1. CMC Markets (CMCX), +101%
2. Raspberry Pi (RPI), +74%
3. Watches of Switzerland (WOSG) +63%
4. Tate & Lyle (TATE) +59%
5. Softcat (SCT), +57%

Fallers

1. Telecom Plus (TEP), -43%
2. Pan African Resources (PAF), -30%
3. WH Smith (SMWH), -30%
4. Harbour Energy (HBR), -25%
5. ME Group (MEGP), -23%

FTSE 350 Traders Looking Past Rocky Q3

UK stocks have had a strong start to the new quarter, led by a fairly broad base of names, implying the upswing could have some momentum. This is a change from last quarter, when the FTSE 350 swung up and down (though it ended slightly positive after all), as traders tracked domestic policy amid uncertainty around what fiscal policy changes would come with the end of Keir Starmer's premiership. Markets have since gained reassurance that an orderly transition to Andy Burnham at No. 10 won't cross any of the major fiscal guardrails. With the index underperforming its European and American peers over the last three months, it could offer attractive value going into Q3 and support further upside.

The FTSE 350 is more domestically orientated, which means it could benefit from some local headwinds. As the energy market returns to balance and inflation pressures ease, that could allow the UK economy to rebound. The main themes analysts point to affecting British stocks in Q3 are the monetary policy outlook and earnings season. As inflationary pressure eases, the BOE is expected to keep rates unchanged at its policy meeting at the end of the month. In fact, markets now price in no rate hikes for the rest of the year, which could keep gilt yields lower unless there is a surprise by the new Chancellor after Burnham becomes PM, potentially as soon as this month.

A brief look over the FTSE 350 risers and fallers shows a wide range of names, reflecting the breadth of the market's move. That could mean the momentum is maintained going forward. Here's what drove the biggest movers over the last three months:

Raspberry Pi Riding the AI Wave

The gadget company is one of the surprise winners of the AI boom, as users find new ways to apply edge computing technologies. Raspberry Pi's low-cost hardware has made it attractive for a wide range of applications, including in drones and autonomous vehicles. In early June, the company upgraded its full-year profit growth, expecting to see millions of unit sales.

Tate & Lyle Surging on Ingredients Consolidation

The food space has been in consolidation for the last couple of years as companies that have managed to secure solid profits are at a premium. Tate & Lyle was attracting investor interest due to its strategic progress, but the boost is mainly attributed to Ingredion's takeover offer. The offer is part of a trend of US companies buying out UK firms. The takeover price of 595p represented a 59% premium for shareholders, who will still be entitled to dividends until the deal closes late next year.

Telcom Plus Pressured by Competition

To the downside, Telecom Plus' underperformance stands out amid a generally positive trend for utilities. The company reported higher customer numbers, but investors were disappointed that its earnings fell short of consensus. However, that was the result of seasonal conditions, as a warm winter kept energy consumption lower. Still, investors are nervous about competitive pressure amid high debt, even though the firm offered a positive outlook. Its upcoming earnings could be pivotal if it experiences a rebound or continues to slide.