Key Highlights
- The FTSE 100 index has climbed above 10,000 points for the first time in its history.
- Shares of British companies such as Currys and Next saw significant gains.
- The London stock market outperformed major American indexes in 2025.
- Rising gold prices and global defence spending contributed to the index’s rise.
New Year’s Milestone for FTSE 100 Index
The London stock market has achieved a significant milestone, with the FTSE 100 index hitting 10,000 points for the first time in its history. This occurred on the first trading day of 2025, marking an important psychological and financial victory for investors.
Performance Boost Across the Board
In 2025, shares included in the index performed strongly. According to Susannah Streeter, an independent financial adviser, the FTSE 100 has risen more than 21% compared to a year ago when it stood at just over 8,260 points. The benchmark set a new all-time record, reaching 10,046 points before dropping back and closing at 9,951.
Outperformance of US Markets
In the face of much discussion about high stock valuations in the United States, the London index outperformed major American indexes. Dan Coatsworth, head of markets at investment platform AJ Bell, pointed out that this performance was a New Year’s gift for Chancellor Rachel Reeves, who has been advocating for more investment in the UK share market to boost economic growth.
Key Industry Performers
The rise in precious metal prices and global defence spending contributed significantly to the FTSE 100’s success. For instance, Rio Tinto saw a boost from rising gold and silver values, while contractors such as Babcock and Rolls-Royce benefited from increased global defence spending amid economic uncertainty and geopolitical tensions.
Expert Analysis
Susannah Streeter highlighted the psychological importance of hitting 10,000 points. She stated that this milestone shows London’s blue-chip index is “back in favour” with investors. “Concerns continue to swirl about the super-high valuation of US tech sector,” she said, making the UK market more appealing.
Dan Coatsworth further emphasized the achievements of the FTSE 100, saying it demonstrates what’s possible when buying UK shares. He noted that despite being sometimes perceived as “old and boring,” these companies offer stability during uncertain times due to their global operations. Many of these businesses have large overseas revenues, generating around three-quarters of their income outside the UK.
Expert Quotations
“The 10,000-point marker is a psychologically important milestone and shows London’s blue-chip index is ‘back in favour’ with investors,” said Susannah Streeter, an independent financial adviser.
Chancellor’s Response
The chancellor welcomed the breakthrough, stating it was “a vote of confidence in Britain’s economy and a strong start to 2026.” However, while the FTSE index is often seen as a measure of Britain’s corporate strength, its rise largely reflects global business activity because most of its companies earn significant revenues overseas rather than from the UK economy.
Industry Trends
Several factors contributed to this strong performance. Fashion retailer Next saw an increase in profits four times over the year, while luxury brand Burberry returned to profit after back-to-back annual losses. However, bakery chain Greggs experienced a 39% drop in share prices as investors became anxious about its expansion plans and lacklustre sales growth.
Diageo and WH Smith also suffered sharp falls, highlighting the mixed fortunes within the index. The FTSE 100’s rise follows global trends where stock markets have surged due to expectations that artificial intelligence (AI) will boost company earnings.
Conclusion
The FTSE 100’s performance in 2025 demonstrates resilience and outperformance against the backdrop of a globally strong economic year. While it is not a direct measure of the UK economy, its success provides confidence to investors and highlights the potential for continued growth in the UK share market.
