HSBC has identified nine stocks listed on the London Stock Exchange that it believes are undervalued and have the potential to surge. The bank points out that U.K. markets have started to outperform other global indexes since the release of the U.K.’s June inflation data. This has led to a rally in rate-sensitive housebuilder stocks and an increase in the FTSE 100 benchmark index. Despite maintaining an underweight view on the U.K. market overall, HSBC highlights the attractive valuation of London-listed stocks. The price-to-earnings ratio of the FTSE 100 index is currently trading at a 20% discount to its 10-year average. Additionally, the bank notes that the strong pound has been a headwind for the FTSE index, as the majority of its company revenues are generated in dollars or euros. This could enhance the appeal of the FTSE 100 index. Taking these factors into consideration, HSBC presents a list of nine “unloved stocks” that meet specific criteria, including relatively pessimistic analyst ratings but positive earnings revisions and upside earnings surprises. The stocks in this list include Carnival, JD Wetherspoon, Pennon Group, Abrdn, Domino’s Pizza, Next, M & S, Unilever, and Hargreaves Lansdown. HSBC also highlights that these stocks have outperformed the broader FTSE 350 over the past two months. However, the bank advises further investigation before making investment decisions.