The London stock market kicked off 2026 with a historic surge, as the FTSE 100 index briefly smashed through the 10,000-point barrier for the very first time on Friday. The blue-chip benchmark ultimately closed off its peak but still secured a positive start to the new year.
A Record Leap for the Footsie
In a session of notable milestones, the FTSE 100 climbed to an unprecedented intraday high of 10,046.25 points. It later settled at 9,951.14, a gain of 19.76 points or 0.2%. The FTSE 250 mid-cap index also advanced, adding 0.3% to close at 22,409.21.
Market analysts heralded the breakthrough as a significant psychological win for UK equities. Dan Coatsworth, head of markets at AJ Bell, described crossing 10,000 as "the best new year’s present Chancellor Rachel Reeves could want." He highlighted the remarkable speed of the index's ascent, noting it took just 171 days to jump from 9,000 to surpass 10,000, beating a record set in the late 1990s.
"It proves to cynics that the UK market is not stuck in the mud, and that the US stock market is not the only place to make money," Coatsworth added.
Stock Movers and Economic Data
Individual stocks showed mixed fortunes. Engineering giant Rolls-Royce, a standout performer in 2025, continued its rally with a 4.1% rise. Telecommunications firm Airtel Africa also gained 1.8%. However, gold miner Endeavour Mining tumbled 5.7% after Mali and Burkina Faso announced they would bar US citizens in retaliation for an expanded American travel ban. The company has major assets in Burkina Faso.
Economic data released on Friday painted a nuanced picture. The UK manufacturing sector showed resilience, with the final S&P Global UK manufacturing PMI reaching a 15-month high of 50.6 points in December, indicating expansion. Chris Barlow of MHA said this suggested manufacturers could look forward to 2026 with "modest, albeit patchy, confidence."
In contrast, the housing market showed signs of cooling. The Nationwide house price index revealed annual growth slowed to 0.6% in December, the weakest pace since April 2024, with a monthly fall of 0.4%.
Global Context and Outlook
The performance in London came against a mixed global backdrop. In Europe, the CAC 40 in Paris rose 0.6% while Frankfurt's DAX 40 gained 0.2%, despite data showing the eurozone's manufacturing sector contracted more than expected. In New York at the London close, the Dow Jones was up 0.3% but the Nasdaq Composite was down 0.2%, pressured by a 1.3% drop in Tesla shares after it reported lower-than-expected Q4 sales.
Looking ahead, experts see potential for further UK gains. Jemma Slingo, pensions and investment specialist at Fidelity International, pointed out that FTSE 100 valuations remain attractive compared to US and European markets. "With around a quarter of FTSE 100 revenues coming from the US, investors are gaining exposure to global growth at a discount – and with a healthy dividend yield to match," she said.
Investors will now turn their attention to a busy week of corporate updates from major retailers including Next, Tesco, and Marks & Spencer, alongside key economic data such as eurozone inflation and the US jobs report.
