FTSE 100 tops 10,000 for first time in new year rally

January 2, 2026 adminsr

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The FTSE 100 index climbed above 10,000 points for the first time on Friday, as the blue-chip index made an upbeat start to 2026, building on a year when it rallied more than 20 per cent and outperformed the US stock market.

The UK’s blue-chip index rose 0.8 per cent as global markets advanced, adding to last year’s 21.5 per cent increase, its largest annual gain since 2009. It first broke through 9,000 points in July, after rebounding from sharp falls in the wake of “liberation day”.

The index has been buoyed by a strong rally in banking, mining and defence stocks, all of which are well represented in a London market seen as relatively cheap by international investors, in part due to a lack of the Big Tech companies that have powered Wall Street higher in recent years.

“The FTSE 100 sector mix is overweight global winners such as mining and banks,” said Arun Sai, a multi-asset strategist at Pictet Asset Management.

London-listed banks Standard Chartered and Lloyds surged 84 per cent and 79 per cent respectively last year, helped by strong earnings and the lack of a feared tax raid on the sector in Rachel Reeves’ November Budget.

Meanwhile, shares in miner Fresnillo, the index’s top performer, increased more than fivefold, fuelled by precious metals’ blistering rally.

Alongside other European markets, UK stocks have benefited from investors’ concerns around US tech companies’ high valuations and spending in recent months, as they offer a cheap way for nervous investors to diversify exposure outside the US.

“FTSE and Stoxx [Europe] 600 are an ‘AI-hedge’ in portfolio construction,” said Florian Ielpo, head of macro at Lombard Odier, describing the indices as a “practical alternative to direct mega-cap tech exposure, with cheaper starting valuations and a very different sector mix”.