London's blue-chip index surged past the 9,000-point mark for the first time on Tuesday, reaching 9,016.98 points in early trading before closing slightly lower. The FTSE 100 has gained over 10% in 2025, driven by a shift away from US stocks amid concerns over Donald Trump's trade policies.
Analysts attribute the rally to Britain's trade deal with the US, which guarantees lower tariffs, and the index's composition of stable, long-established companies. Dan Coatsworth of AJ Bell described the UK market as 'the calming cup of tea and biscuit in an uncertain world', noting its appeal to investors seeking reliability.
However, the index fell back below 9,000 points later in the session, closing at 8,938 points after a rise in US inflation dampened hopes of early interest rate cuts. The FTSE 100 had dropped as low as 7,544 points in early April during tariff-related turmoil but recovered sharply.
Top performers include precious metals producer Fresnillo, up over 140% on soaring gold and silver prices, defence contractor Babcock (+115%), and Rolls-Royce (+75%). Banking and defence sectors have driven earnings momentum, according to RBC Brewin Dolphin's John Moore, who also cited the UK's 'relative political stability' as a factor.
Roughly 75% of FTSE 100 earnings come from overseas, but domestic stocks have also fared well: Lloyds Banking Group rose 38%, Next 28%, and St James's Place 40%. The UK market has outperformed Wall Street's S&P 500 (up 6.75%) but lags Germany's DAX (up over 20%).
