The FTSE 100 capped off a stellar week by charging towards record levels, powered by the prospect of a colossal mining merger and a significant recovery in the price of oil.
Market Indices Finish Strong on Deal Speculation
The FTSE 100 index closed up 79.91 points, or 0.8%, at 10,124.60 on Friday the 9th of January 2026. For the entire week, the blue-chip index posted an impressive gain of 1.7%. The FTSE 250 also advanced, firming by 2.8% over the week to close at 23,036.80, while the AIM All-Share index climbed 3.1% to 790.42.
The primary catalyst for the rally was the confirmation from Glencore late on Thursday that it has re-entered merger discussions with rival mining giant Rio Tinto. The proposed deal, structured as an all-share merger with Rio acquiring Glencore, sent shockwaves through the sector. Under UK takeover rules, Rio Tinto has until the 5th of February to announce a firm intention to make an offer.
Mining and Energy Stocks Lead the Charge
Shares in Glencore surged by 9.6%, making it the top riser on the FTSE 100. The news lifted other major miners, with Antofagasta gaining 4.1% and Anglo American, fresh from its own merger with Teck Resources, rising 2.7%. Rio Tinto's shares, however, fell 3.0% on the day.
Analysts were not entirely surprised by the move. Bank of America noted that for miners of this scale, organic growth has become increasingly challenging. "M&A, while not without its risks, mitigates other risks such as project delays, capex overruns and technical issues," the broker stated. RBC Capital Markets highlighted that the core logic for a merger rests on copper, with Glencore offering a strong pipeline and Rio providing balance-sheet strength.
The energy sector also provided a substantial boost. BP and Shell rallied 2.4% and 3.0% respectively as Brent crude oil bounced to $63.42 a barrel from $61.12. David Morrison, senior market analyst at Trade Nation, linked the rebound to heightened geopolitical risks and new sanctions on Russian oil buyers, though he cautioned that expectations of a crude surplus later in the year continue to weigh on sentiment.
Global Markets and Economic Data Provide Mixed Signals
European markets mirrored London's positive mood. The CAC 40 in Paris closed up 1.4%, while Frankfurt's DAX 40 gained 0.5% after hitting an all-time high. In New York, the Dow Jones, S&P 500, and Nasdaq Composite were all higher at the London close.
Investors were digesting mixed US employment data. While nonfarm payrolls increased by a weaker-than-expected 50,000 in December, the unemployment rate edged down to 4.4%. Wells Fargo analysts suggested the report was unlikely to alter the Federal Reserve's immediate policy outlook, with the labour market cooling at a "orderly and gradual pace." Morgan Stanley revised its forecast, now expecting rate cuts in June and September rather than sooner.
Back in London, it was a difficult session for J Sainsbury, whose shares fell 5.8%. Despite strong Christmas grocery sales, weak performance at its Argos division and in general merchandise disappointed the market. In contrast, Marks & Spencer continued its recent positive run, gaining 2.4%.
The week ahead promises further action with a trading statement from Oxford Nanopore Technologies due Monday, followed by updates from Persimmon and Whitbread. Key economic data includes US inflation figures, eurozone industrial production, and a crucial UK GDP print.
