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The UK’s blue-chip share index has broken through the 10,000-point level for the first time, as global shares are lifted by a late “Santa rally”.
The FTSE 100 jumped on Friday morning to a high of 10,022, a new peak for the index, before easing slightly back.
The milestone marks a stellar 12 months for the “Footsie”, which rose by 21.5% over the course of 2025.
The index of the UK’s biggest listed companies was lifted on Friday by the engineering company Rolls-Royce, the aerospace company Melrose and the precious metal producer Fresnillo, which were the top risers with gains of about 3%.
The last five trading sessions of the year and the first two of the new year are known as the “Santa Claus rally period”, when shares often rise amid light trading volumes.
Global markets have risen sharply over the past 12 months, lifted by hopes of interest rate cuts from central banks, the artificial intelligence boom and a supportive economic backdrop.
Although there was a wobble in the markets last April when Donald Trump announced steep tariffs on US trading partners, shares have recovered as trade war tensions have eased.
The uncertainty created by Trump’s trade wars encouraged some investors to diversify away from the US, and into cheaper markets such as the UK.
“We’ve seen increased interest from foreign investors looking to diversify their holdings and the FTSE 100 has also shone during the more tumultuous periods thanks to its plethora of defensive-style companies,” said Dan Coatsworth, the head of markets at the stockbroker AJ Bell.
“When everything looks gloomy or chaotic, such as in the depths of the ‘liberation day’ fallout earlier this year, 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 nicotine addicts will still buy cigarettes or vapes, and the FTSE 100 has plenty of these companies on offer,” Coatsworth added.
“The UK is a rich hunting ground for dividends, and it is also full of companies that have slow but steady growth and which are underappreciated engines for wealth creation.”
The FTSE 100 contains the 100 most valuable companies listed in London. It was created in 1984, when it started at 1,000 points – the lowest the index has ever reached is 986.9 in July 1984.
The FTSE 100 has a strong international focus, containing mining companies such as Rio Tinto and Anglo American and the oil groups BP and Shell. It also contains the pharmaceuticals companies AstraZeneca and GSK, and the industrial groups Rolls-Royce and BAE Systems, plus banks including Barclays, Lloyds, HSBC and NatWest, consumer-focused firms such as Unilever, the supermarkets Sainsbury’s and Tesco, and utilities such as power and water suppliers.
Fresnillo was the best-performing stock on the FTSE 100 last year, up about 450% over the year as the gold and silver prices have jumped.
Defence stocks also had a good year, with Babcock and Rolls-Royce doubling in value since the start of January.
Neil Wilson, an investor strategist at Saxo UK, said: “Defence names really stand out globally one year into President Trump’s presidency.
“In Europe, his pressure on Nato members to take greater responsibility for their own defence spending has triggered a paradigm shift in how the continent views security, and that’s been reflected in the strength of European and UK defence stocks.”
