The FTSE 100 index has surpassed 10,000 points for the first time, marking a significant milestone for the stock market on the first trading day of the year.
Constituent shares demonstrated robust performance throughout 2025, driving the benchmark over 21% higher compared to the previous year when it stood at approximately 8,260 points. It achieved a new intraday high of 10,046 points before retracing to close the day at 9951.
Despite prevalent discussions surrounding elevated stock valuations in the U.S. during the past year, the London index outperformed major American indices in 2025.
Shares in prominent British brands like Currys and Next experienced substantial gains, alongside advances for precious metal miners, defense contractors, and financial services firms.
The FTSE 100 tracks the performance of the 100 largest companies listed on the London Stock Exchange.
This surge is positive news for investors, including those with pensions or savings invested in the stock market, although it does not directly reflect the overall performance of the UK economy.
Many constituent companies have significant overseas operations in addition to their UK presence, with approximately three-quarters of FTSE 100 firms’ revenues generated abroad.
In 2025, rising gold and silver prices benefited companies like Rio Tinto, while increased global defense spending boosted contractors such as Babcock and Rolls-Royce, amidst economic uncertainty and geopolitical tensions.
The British benchmark index reached a new all-time intraday high as trading resumed after the New Year holiday, rising by more than 1% within the first hour to reach 10,046 points – a 115-point increase from its previous level – before falling back below the threshold.
This brief period above 10,000 followed twelve months of consistent gains.
Susannah Streeter, an independent financial commentator, described the 10,000-point mark as “a psychologically important milestone” and indicated that London’s blue-chip index was “back in favor” with investors.
“Concerns continue to swirl about the super-high valuation of US tech sector,” she stated, making the UK market more attractive.
Dan Coatsworth, head of markets at investment platform AJ Bell, noted that crossing the 10,000-point threshold was a New Year’s gift for Chancellor Rachel Reeves, who has been advocating for increased investment in the UK share market to stimulate economic growth.
“She has been banging the drum about the merits of investing over parking cash in the bank.”
“The FTSE 100’s achievements just go to show what’s possible when buying UK shares,” he added.
While London-quoted companies were sometimes considered “old and boring”, the mix of industries, including mining and banking, appealed to investors seeking stability during uncertain times, he said.
“Investors often seek solace in companies whose goods and services should be in demand no matter what’s happening in the world.”
“For example, we all need to pay insurance or water bills, or those in the habit are still likely to buy cigarettes or vapes, and the FTSE 100 has plenty of companies playing on these themes on offer.”
The Chancellor commented that the FTSE’s breakthrough was “a vote of confidence in Britain’s economy and a strong start to 2026.”
The FTSE index, dominated by large international companies, closed 2025 at 9,931, after repeatedly reaching record highs during the year.
Although often perceived as a gauge of Britain’s corporate strength, the FTSE 100 primarily reflects global business activity because most of its constituent companies derive a significant portion of their revenues from overseas markets rather than the UK economy.
Its rise aligns with a global trend of surging stock markets, fueled by expectations that artificial intelligence (AI) will boost company earnings.
However, some experts have cautioned that if these high expectations for AI are not met, or do not materialize quickly enough, the enthusiasm could wane, potentially leading to a sharp decline in share values.
Share prices fluctuate based on investors’ anticipations of future company earnings. Among the strong performers in 2025 were fashion retailer Next, which raised its profit outlook four times throughout the year, and luxury brand Burberry, which returned to profitability after consecutive annual losses.
Conversely, shares in bakery chain Greggs experienced a 39% decline, with investors expressing concerns about its expansion plans and sluggish sales growth. Diageo and WH Smith also suffered significant losses.
The stock market experienced a volatile year, but the S&P 500 is projected to close 2025 up by approximately 17%, marking the third consecutive year of double-digit gains.
Data suggests that the surge in post-Christmas shoppers was the strongest in a decade.
The strength of the UK economy influences the amount of tax revenue the government collects to fund public services.
While UK high streets saw a drop in footfall on Black Friday, the West End experienced an increase in shoppers.
The state borrows to fund day-to-day spending as well as long-term infrastructure projects.