FTSE 100 Surpasses 10,000 Points on New Year Trading
The FTSE 100 index crossed the 10,000-point mark for the first time on the first trading day of the year, marking a significant milestone for the stock market.
In 2025, the index saw a remarkable performance, climbing over 21% from the previous year’s level of just above 8,260. It peaked at 10,046 points before settling at 9,951 at the close of the day.
Interestingly, while there’s been a notable focus on high U.S. stock valuations lately, London’s indexes outperformed their major U.S. counterparts in 2025.
Stocks of British brands, particularly Currys and Next, experienced notable upticks, alongside gains in sectors like precious metals mining and defense.
The FTSE 100 represents the performance of the largest 100 companies listed on the London Stock Exchange. While this surge is positive news for investors—those with pensions and other market-linked savings—it doesn’t directly reflect the UK economy’s health.
In fact, many companies in the index have substantial operations overseas, generating about three-quarters of their revenue from outside the UK. Rising gold and silver prices benefited firms like Rio Tinto amid geopolitical tensions, while increased global defense spending supported companies like Babcock and Rolls-Royce.
When trading resumed post-New Year’s, the index hit a new intraday record, edging above 10,000 points, just over an hour into the session.
Susanna Streeter, an independent financial commentator, highlighted that reaching the 10,000-point mark is a “psychologically significant milestone,” suggesting that London’s blue-chip index is again appealing to investors.
According to Dan Coatsworth from AJ Bell, hitting this milestone serves as a “New Year’s gift” to Prime Minister Rachel Reeves, who’s been advocating for increased investments in the UK stock market to stimulate economic growth. He mentioned that she’s been stressing the benefits of investing rather than letting cash sit idly in bank accounts.
Coatsworth also pointed out that while companies listed on the London exchange may have been viewed as “old and boring,” their diverse mix—spanning mining to banking—makes them attractive for those seeking stability, especially during tumultuous times.
Investors often gravitate towards companies providing essential services, as these tend to maintain demand regardless of broader market fluctuations. There are numerous firms in the FTSE 100 that resonate with these needs, whether it’s insurance, water supply, or, yes, even tobacco products.
Prime Minister Reeves described the FTSE’s rise as “a vote of confidence” in the UK economy, emphasizing that it sets a strong tone for 2026. The index finished 2025 at 9,931 after a year of setting new highs.
Even though the FTSE 100 is perceived as a gauge of UK business strength, it primarily reflects global business activities since a significant portion of revenue for many FTSE 100 companies comes from abroad.
The current rally aligns with a global trend where stock markets have surged, fueled by optimism that artificial intelligence will enhance corporate profitability.
However, some experts caution that should the lofty expectations for AI not pan out, that enthusiasm might fade, leading to potential drops in stock prices.
Stock valuations fluctuate based on future profit expectations, and some standout performers from 2025, like Next, which raised its profit forecast multiple times during the year, and Burberry, which returned to profitability after previous losses, exemplify this trend.
On the flip side, the bakery chain Greggs saw a significant drop of 39%, as investors worried about slow sales and expansion strategies. Other companies, such as Diageo and WH Smith, also faced declines.
