JP Morgan reiterates 'underweight' on UK stocks

To back up the former of those two assessments, they pointed to improved pricing and "extremely strong" activity prints as reflected in Citi's economic surprise index, purchasing managers' indices and the German IFO institute's widely-followed business confidence gauge, as well as recent "solid" corporate earnings.

The UK on the other hand was facing multiple headwinds, they said.

Those included, a deteriorating trade-off between economic growth and monetary policy, what with the Bank of England set to hike Bank Rate even as the economy weakened, and a historically poor performance by UK stocks in a rising interest rate environment.

The explanation for the latter was that the UK market offered the highest dividend yield in the world.

Furthermore, should emerging markets stall that would become another hurdle for the UK, they said.

Finally, JP Morgan expected Sterling to strengthen, which would likely weigh on the top flight index.

By sectors, and within the UK, they expressed caution on regulated utilities, Real Estate, Staples and Pharmaceuticals.

As for homebuilders, JP Morgan cautioned that typically they performed "strongly" going into the first increase in Bank Rate but faltered afterwards.

The investment bank also expressed an 'underweight' view on Hotels, Retail and Media.

On the positive side of things, JP Morgan told clients it would hold Banks, Insurers, Telecommunications and Energy.