The UK’s blue-chip share index has broken through the 10,000-point level for the first time, as London shares continued to rise after a bumper 2025.
The FTSE 100 jumped on Friday morning - the first trading day of the year - to a high of 10,046, a new peak for the index, before easing back slightly.
The milestone marks a stellar 12 months for the “Footsie”, which rose by 21.5% over the course of last year.
The index of the UK’s biggest listed companies was lifted on Friday by the engineering company Rolls-Royce and the luxury fashion group Burberry, which were among the top risers of the day, up about 4%.
The last five trading sessions of the year and the first two of the new year are known as the “Santa Claus rally period”, when shares often rise amid light trading volumes.
The chancellor, Rachel Reeves, hailed the milestone moment as “a vote of confidence in Britain’s economy and a strong start to 2026”.
Dan Coatsworth, the head of markets at the stockbroker AJ Bell, said:
“Breaking through the 10,000 level is the best new year’s present Rachel Reeves could want. She has been banging the drum about the merits of investing over parking cash in the bank, and the FTSE 100’s achievements just go to show what’s possible when buying UK shares.
“It also proves to cynics that the UK market is not stuck in the mud, and that the US stock market is not the only place to make money.”
The rally in London helped to lift the pan-European Stoxx 600 index to a record high on Friday morning, led by the mining and energy sectors.
Global markets have risen sharply over the past 12 months, lifted by hopes of interest rate cuts from central banks, the artificial intelligence boom and a supportive economic backdrop.
Although there was a wobble in the markets last April when Donald Trump announced steep tariffs on US trading partners, shares then recovered as trade war tensions have eased.
The uncertainty created by Trump’s trade wars encouraged some investors to diversify away from the US, and into cheaper markets such as the UK during 2025.
The FTSE 100 contains the 100 most valuable companies listed in London. It was created in 1984, when it started at 1,000 points – the lowest the index has ever reached is 986.9 in July 1984.
The FTSE 100 has a strong international focus, containing mining companies such as Rio Tinto and Anglo American and the oil groups BP and Shell. It also contains the pharmaceuticals companies AstraZeneca and GSK, and the industrial groups Rolls-Royce and BAE Systems, plus banks including Barclays, Lloyds, HSBC and NatWest, consumer-focused firms such as Unilever, the supermarkets Sainsbury’s and Tesco, and utilities such as power and water suppliers.
Fresnillo was the best-performing stock on the FTSE 100 last year, up about 450% over the year as the gold and silver prices have jumped.
Defence stocks also had a good year, with Babcock and Rolls-Royce doubling in value since the start of January 2025.
Neil Wilson, an investor strategist at Saxo UK, said: “Defence names really stand out globally one year into President Trump’s presidency.
“In Europe, his pressure on Nato members to take greater responsibility for their own defence spending has triggered a paradigm shift in how the continent views security, and that’s been reflected in the strength of European and UK defence stocks.”
Wall Street analysts have predicted that global markets will rise during 2026 despite fears that AI company valuations are a bubble.
A poll by the trading company eToro last month found that UK retail investors were optimistic about the year ahead, with 53% confident the current bull market would continue throughout 2026.
