London – January 2, 2026
London's benchmark FTSE 100 index surpassed the symbolic 10,000-point level for the first time on Friday, the opening trading day of 2026, extending a powerful rally that delivered its strongest annual performance in 16 years. The blue-chip index, comprising the UK's 100 most valuable listed companies, climbed as much as 1.2% in early trading to a record intraday high of 10,046.25 before easing slightly amid lighter holiday volumes.
This historic breakthrough caps a remarkable 2025 for the FTSE 100, which surged more than 21% over the year—its best performance since the post-financial crisis rebound in 2009. The gains were driven by a combination of anticipated interest rate cuts, enthusiasm around artificial intelligence, resilient corporate earnings, and a supportive global economic backdrop.
Early trading on January 2 saw strong performances from several heavyweight stocks. Precious metals miner Fresnillo led the risers, advancing around 3-4% as gold and silver prices continued their upward trajectory. Engineering giant Rolls-Royce gained approximately 3%, while aerospace supplier Melrose Industries rose about 3%, reflecting ongoing investor confidence in defence and industrial sectors.
The milestone comes during what is traditionally known as the "Santa Claus rally" period—the final five trading sessions of the previous year and the first two of the new year—when markets often experience uplift on reduced volumes. The FTSE 100's advance also contributed to broader European strength, with the pan-European STOXX 600 index hitting a fresh record high, up around 0.5-0.6% in early deals.
Dan Coatsworth, head of markets at investment platform AJ Bell, described the event as a "historic moment." He noted: “The FTSE 100 hit the 10,000 jackpot level immediately after rounding off a tremendous year for UK shares. Breaking through the 10,000 level is the best New Year’s present Chancellor Rachel Reeves could want. It shows what’s possible when investing in UK shares rather than parking cash in the bank.”
The FTSE 100's composition—heavily weighted toward multinational companies earning significant revenues overseas—helped shield it from domestic economic challenges while benefiting from global trends. Commodity-linked stocks, including miners and energy firms, played a key role in 2025's gains amid surging metal and oil prices.
Fresnillo emerged as the standout performer of 2025, with its shares soaring around 450% as record highs in gold and silver prices boosted profitability. Defence-related stocks also shone brightly, with companies like Babcock International and Rolls-Royce roughly doubling in value since January 2025, fueled by increased NATO spending commitments and shifting European security priorities.
Neil Wilson, investor strategist at Saxo UK, highlighted the global appeal of defence stocks: “Pressure on Nato members to increase defence spending has triggered a shift in how Europe views security, and that’s been reflected in the strength of UK and European defence shares.”
Temporary market wobbles in April 2025, triggered by U.S. tariff announcements under President Donald Trump, prompted some investors to rotate away from expensive U.S. equities toward undervalued markets like the UK. As trade tensions eased later in the year, this diversification flow supported the FTSE 100's outperformance relative to peers.
Created in 1984 with a base value of 1,000 points, the FTSE 100 has now delivered a tenfold increase over four decades, underscoring the long-term benefits of equity investment. Many constituents, such as banks (HSBC, Barclays), miners, and energy giants (BP, Shell), derive the bulk of earnings from international operations, providing exposure to global growth at relatively attractive valuations.
Looking ahead, analysts anticipate continued momentum into 2026. A recent poll by trading platform eToro found that 53% of UK retail investors are optimistic the current bull market will persist this year, citing falling interest rates, strong corporate fundamentals, and reduced political uncertainty.
Broader European indices reflected similar positivity, with defence and mining sectors leading gains amid higher commodity prices. The STOXX 600's record start to the year underscores a favourable environment for risk assets, though analysts caution that valuations in some areas, particularly AI-related themes, warrant monitoring.
As trading volumes normalize post-holidays, focus will shift to upcoming economic data, including manufacturing PMIs, and central bank signals on monetary policy. For now, the FTSE 100's breach of 10,000 stands as a symbolic victory for UK equities, reinforcing calls for greater retail participation in stock market investing over traditional savings.
The achievement arrives amid government efforts to promote share ownership, with Chancellor Reeves previously advocating for investing in British companies. With global markets buoyed by AI optimism and rate-cut expectations, the stage appears set for further gains, though geopolitical risks and potential economic slowdowns remain on investors' radars.
