London’s blue-chip FTSE 100 index hit the symbolic 10,000 points mark for the first time on Friday, reflecting a wider surge in global equities and providing a strong start to 2026 for a stock market that had lagged behind peers for years. The benchmark achieved this milestone at the outset of the first trading day of 2026. It gained nearly 22% in 2025, its best year since 2009, outperforming Europe’s broad STOXX 600 index and the S&P 500. “It’s nice to be going into 2026 with a good news story,” remarked Danni Hewson. The prolonged negative sentiment surrounding UK stocks has been prevalent for quite some time. Therefore, starting the year on a positive note, coupled with the continuation of momentum from 2025 into 2026, is likely to exert a significant psychological influence. The FTSE 100 was recently observed just below the 10,000 mark, reflecting an increase of 0.4% for the day.

Global stock markets experienced a significant upswing in 2025, largely fueled by a rally in firms associated with artificial intelligence, despite the limited exposure of British stock markets to this sector. Instead, its biggest gainers in 2025 included miners such as Fresnillo, boosted by record precious metal prices, and gains in defence companies, such as Babcock and Rolls-Royce as Europe increased defence spending. Banks, including Lloyds, were also strong, boosted by elevated interest rates alongside decent economic growth. That marked its most successful year since 2009, surpassing both Europe’s broad STOXX 600 index and the S&P 500.

The British markets have experienced a decline in initial public offerings in recent years, as companies have exited the market through acquisitions, delistings, or relocating their primary listings from London. Political instability, bond market volatility, and post-Brexit uncertainty have contributed to a prevailing negativity. With a limited number of tech and AI-connected companies listed in London, British-focused fund managers have found it challenging to counter the sentiment that the most significant excitement lies beyond their borders. “This (10,000) is an arbitrary number, but it is something that could attract greater interest from international investors in the FTSE – thus, it represents a significant development,” stated Rory McPherson. The FTSE boasts a diverse sectoral composition and attractive valuations. Investors assert that the UK may provide a means of diversification away from soaring tech stocks, amid ongoing apprehensions regarding a potential AI bubble.

Dealmakers foresee that London may draw an increased number of IPOs this year, particularly from a Norwegian software firm. However, elevated share prices might render London-listed equities less appealing to acquirers, following a period where lower valuations contributed to their status as the second most sought-after globally last year. British finance minister Rachel Reeves stated on social media platform X: “The FTSE 100 breaking through 10,000 points for the first time is a vote of confidence in Britain’s economy and a strong start to 2026.” Nevertheless, the blue-chip index in 2025 lagged behind other markets, including Japan, Hong Kong, South Korea, Spain, and Italy. While the FTSE 100, which is significantly influenced by companies with international exposure, has shown superior performance, the domestically oriented mid-cap FTSE 250 has underperformed, increasing by approximately 9% in 2025.