FTSE 100 index hits 10,000 milestone in new year rally

The FTSE 100 index has reached a significant milestone by climbing above 10,000 points for the first time on the initial trading day of the year. This achievement marks a remarkable increase from the previous year, with the index standing at just over 8,260 points. Despite concerns about high stock valuations in the US, the London index outperformed major American indexes in 2025.

Various factors contributed to the index’s growth, including strong performances from shares of British brands like Currys and Next, as well as increases in precious metal miners, defence, and financial services companies. The FTSE 100 tracks the performance of the 100 largest companies listed on the London Stock Exchange, many of which have significant overseas operations.

In 2025, rising gold and silver prices benefited firms like Rio Tinto, while increased global defence spending boosted contractors such as Babcock and Rolls-Royce. The index set a new all-time intraday record by briefly surpassing 10,000 points before closing the day at 9951.

Financial commentator Susannah Streeter described the 10,000-point milestone as a psychologically important moment that showcased the index’s appeal to investors. Head of markets at investment platform AJ Bell, Dan Coatsworth, highlighted the benefits of investing in UK shares, emphasizing the stability offered by a diverse range of industries within the FTSE 100.

Chancellor Rachel Reeves welcomed the FTSE’s breakthrough as a vote of confidence in Britain’s economy, noting that the index’s performance reflected global business activity. The rise in stock markets globally was attributed to expectations that artificial intelligence would enhance company earnings, although some experts cautioned about the potential risks if these expectations were not met.

Strong performers in 2025 included fashion retailer Next and luxury brand Burberry, while bakery chain Greggs and companies like Diageo and WH Smith experienced declines in share prices. Overall, the FTSE 100’s climb above 10,000 points symbolizes a positive start to the year and underscores the resilience of UK shares in uncertain times.