Key Highlights
- The FTSE 100 recorded its best annual performance since 2009.
- Despite a turbulent year with US tariffs and global conflicts, the index outperformed most European and Wall Street rivals.
- Mining and defence stocks led the gains, with miners specializing in precious metals showing significant increases.
- The FTSE 100 closed at 41 new highs in 2025 and nearly broke the 10,000 level for the first time.
FTSE 100 Surges to Best Year Since 2009 Despite Turmoil
The London blue-chip stock index, the FTSE 100, has enjoyed its best year since 2009, outpacing its rivals in the United States and Europe. This remarkable performance came despite a challenging year marked by US trade tariffs, global conflicts, and the rapid advancements in artificial intelligence.
Outperformance Amidst Turmoil
The FTSE 100’s success is noteworthy given the numerous challenges it faced throughout 2025. President Trump’s announcement of US trade tariffs early in the year caused a significant dip, with the index losing almost 1,000 points in a single week. However, the market quickly recovered and closed at 41 new highs for the year, with shares in BAE Systems rising by 49 per cent due to increased defence spending pledges.
Key Sector Performances
Mining stocks were among the top performers, with gold prices surging by 66 per cent and silver increasing by an impressive 167 per cent. Companies like Endeavour Mining saw their shares rise by 159 per cent over the year, while Fresnillo, a Mexican company specializing in silver and gold, witnessed a remarkable increase of 436 per cent.
Defence stocks also benefited from increased spending commitments. Shares in BAE Systems, Britain’s largest defence contractor, rose by 49 per cent, while Rolls-Royce saw its shares climb 102 per cent and Babcock International gained 148 per cent. These sectors represented a significant portion of the FTSE 100’s gains.
Impact of AI Concerns
While mining and defence stocks were key drivers, the FTSE 100 was not immune to broader market concerns. The rise in artificial intelligence (AI) posed both opportunities and challenges. Some investors viewed it as a potential overvaluation risk, while others saw it as an essential growth driver.
Companies like Nvidia, valued at over $5 trillion, led the way up or down.
The FTSE 100’s performance was also influenced by other factors. The S&P 500 in the United States rose 17 per cent, while the Nasdaq Composite gained 21 per cent. In comparison, Japan’s Nikkei 225 performed better, with a 26 per cent increase, while the Shanghai index managed an 18.4 per cent rise.
Year-End Performance
The FTSE 100 ended the year on a slight dip but still achieved significant gains over the course of 2025. The index closed at 9,931.38 after losing 9.33 points or 0.1 per cent on the final half-day of trading. Over the entire year, it rose by 21.5 per cent, almost matching the 22 per cent rise in 2009 following the financial crisis.
The FTSE 250, a more UK-focused index, also performed positively, recording an annual gain of 9 per cent despite losing 87.98 points or 0.4 per cent on the final trading day to close at 22,470.38.
Despite these gains, the market faced several challenges, including geopolitical tensions and a focus on AI risks. However, the resilience of the FTSE 100 in navigating these turbulent waters highlights its strength as a global investment destination.
