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The FTSE 100 climbed above 10,000 points for the first time on Friday as UK shares got off to an upbeat start to 2026, in a year in which the index rose more than 20 percent and outperformed Wall Street.
Britain’s blue-chip index rose 1.1 percent as global markets led gains, adding to last year’s rise of 21.5 percent, its biggest annual gain since 2009. It later returned to trading 0.3 percent higher.
Chancellor Rachel Reeves said, “The FTSE 100 surpassing 10,000 points for the first time is a vote of confidence in the UK economy and a strong start to 2026.” said on x On Friday.
But analysts said the London stock market’s strong performance in 2025 came despite weak economic growth and concerns over Reeves’ tax-hike budget in November, which prompted domestic investors to pull cash out of the UK stock market at a record rate.
Global investors are looking for alternatives to US equities after Donald Trump’s trade war has sent global markets warming to British shares, which were looking cheap after years of relative underperformance.
“Investors are moving away from high-priced US technology instead of buying into Britain because they suddenly like Britain’s growth,” said Florian Ilpo, head of macro at Lombard Odier.
The index was also boosted by a strong rally in banking, mining and defense stocks, all of which were well represented in the London market, which is devoid of the technology companies that have powered Wall Street high in recent years.
“The FTSE 100 sector mix is ​​overweight global winners such as mining and banks,” said Arun Sai, multi-asset strategist at Pictet Asset Management, who pointed to Friday’s rally as part of a broader “global risk-off start to the year.”
The FTSE rally came as global markets started 2026 with gains. In the US, the tech-heavy Nasdaq Composite climbed 1.3 percent while the blue-chip S&P 500 rose 0.7 percent.
The Stoxx Europe 600 index hit a record high and was up 0.7 percent by mid-afternoon. Asian shares also rose early in the day, with Hong Kong’s Hang Seng index climbing 2.8 percent and the South Korean Kospi closing up 2.3 percent.
In 2025, the FTSE 100 outperformed the S&P, boosted by a strong year for the financials and mining sectors. 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 fears of a tax raid on the sector in Reeves’ Budget.
Meanwhile, shares of index top performer miner Fresnillo rose more than fivefold, led by a blistering rally in the precious metals.
Along with other European markets, UK stocks have benefited in recent months from investor concerns about the high valuations and spending of US tech companies, as they offer nervous investors a cheap way to diversify investments outside the US.
“The FTSE and Stoxx (Europe) 600 are an ‘AI-hedge’ in portfolio construction,” Ilpo said, describing the indices as “a practical alternative to direct megacap tech exposures with cheaper initial valuations and a very different sector mix.”
Companies in London’s blue-chip index earn less than a quarter of their revenues inside the UK, helping it recover from an economy that slowed in the second half of the year and shrank unexpectedly ahead of the budget.
In contrast, the FTSE 250 index – which includes smaller companies more closely tied to the UK economy – lagged the more international blue-chip index, rising 9 per cent in 2025.
“The FTSE 100 derives most of its revenues from overseas,” said Jackie Bowie, head of Amia at Chatham Financial. “Resilience in global demand supported earnings, even as UK domestic growth slowed.”
Data Visualization by Ray Douglas
