The FTSE 100 index has reached the 10,000 milestone during the New Year rally.

The FTSE 100 index has climbed above 10,000 points for the first time on the first trading day of the year, surpassing an important stock market milestone.

The stocks included in the index performed strongly in 2025, pushing the benchmark 21% higher than a year ago, when it stood at a little over 8,260. It set a new all-time record by reaching 10,046 points and then came back to close the day at 9951.

Despite much talk of high stock valuations in the US last year, the London index outperformed the major US indices in 2025.

Shares of British brands such as Currys and Next rose sharply, along with gains in precious metal miners, defence and financial services companies.

The FTSE 100 tracks the performance of the 100 largest companies listed on the London Stock Exchange.

The big rise is positive news for investors, including those with pensions or other savings who have invested in the stock market, but it is not a direct measure of the performance of the UK economy.

Many of the constituent companies have large overseas operations as well as a presence in the UK, and around three-quarters of the revenues of FTSE 100 firms are generated overseas.

Rising gold and silver prices boosted companies like Rio Tinto in 2025, while a surge in global defence spending amid economic uncertainty and geopolitical tensions lifted contractors like Babcock and Rolls-Royce.

The British benchmark index set a new all-time intraday record as it resumed trading after the New Year holidays, rising more than 1% within the first hour to 10,046 points – 115 above its previous level – before falling back below range.

Twelve months of gradual growth followed the brief occurrence of trading above $10,000.

Susannah Streeter, an independent financial commentator, said the 10,000-point benchmark was “a psychologically important milestone” and showed that London’s blue-chip index was “back in favour” with investors.

“Concerns remain about the ultra-high valuations of the US tech sector,” making the UK market more attractive, he said.

Dan Coatsworth, head of markets at investment platform AJ Bell, said crossing the 10,000 mark was a New Year’s gift to Chancellor Rachel Reeves, who is calling for more investment in the UK stock market to boost economic growth.

“She is emphasising the importance of investing instead of storing cash in the bank.”

The achievements of the FTSE 100 demonstrate the potential benefits of investing in UK shares, he said.

“The achievements of the FTSE 100 show what is possible when buying UK shares,” he said.

While London-quoted companies were sometimes considered “old and boring,” a mix of industries, including mining and banking, attracted investors seeking stability during uncertain times, he said.

“Investors often seek solace in companies whose goods and services should be in demand, regardless of what is happening in the world.

“For example, we all have to pay insurance or water bills, or those who have a habit are still likely to buy cigarettes or vapes, and there are many companies playing on these topics in the FTSE 100.”

The Chancellor described the FTSE’s success as a ” vote of confidence in the UK economy and a strong start to 2026″.

Large international companies dominate the FTSE Index, which closed 2025 at 9,931 after repeatedly reaching record highs throughout the year.

Although it is often considered a measure of Britain’s corporate strength, the FTSE 100 largely reflects global business activity, as most of its companies earn a significant portion of their revenues overseas rather than in the UK economy.

Its growth follows a global trend in which stock markets have surged on expectations that artificial intelligence (AI) will boost company earnings.

However, some experts warn that if high expectations for AI are not met, or do not materialise quickly enough, enthusiasm could fizzle out – and share prices could fall sharply.

Share prices rise or fall based on investors’ expectations of what they think companies will earn in the future. In 2025 fashion retail,

Strong performers included Next, which quadrupled its profit outlook for the year, and luxury brand Burberry, which returned to profitability after experiencing consecutive annual losses.

However, shares of the bakery chain Greggs have seen a decline of 39%, and investors are concerned about its expansion plans and weak sales growth. Diageo and WH Smith also suffered steep declines.