The UKs benchmark FTSE 100 has crossed the 10,000-point mark for the first time, hitting a high above 10,020 in early trading before easing back slightly, as global markets were buoyed by a late Santa rally. The move caps a strong year for the index, which rose by more than 21% over 2025, its best annual performance in 16 years. Gains on the day were led by Rolls-Royce, Melrose Industries and Fresnillo, each rising by about 3%. The final five trading sessions of the year and the first two of the new year are often referred to as the Santa Claus rally period, when markets tend to rise on lighter trading volumes. The FTSE 100 hit the 10,000 jackpot level immediately after rounding off a tremendous year for UK shares, said Dan Coatsworth, head of markets at AJ Bell. Breaking through the 10,000 level is the best new years present chancellor Rachel Reeves could want. It shows whats possible when investing in UK shares rather than parking cash in the bank. The rally in London also helped lift the Stoxx 600 to a record high, led by mining and energy stocks. Global markets have risen sharply over the past year on expectations of interest rate cuts, enthusiasm around artificial intelligence, and a relatively supportive economic backdrop. Although markets wobbled last April following tariff announcements by Donald Trump, shares later recovered as trade tensions eased. That uncertainty also prompted some investors to diversify away from the US and into cheaper markets such as the UK during 2025. Fresnillo was the FTSE 100s best-performing stock last year, up around 450% as gold and silver prices surged. Defence stocks also performed strongly, with firms such as Babcock and Rolls-Royce roughly doubling in value since the start of 2025. Neil Wilson, investor strategist at Saxo UK, said defence stocks had stood out globally. Pressure on Nato members to increase defence spending has triggered a shift in how Europe views security, and thats been reflected in the strength of UK and European defence shares. Created in 1984 at 1,000 points, the FTSE 100 tracks the UKs 100 most valuable listed companies, many of which earn a large share of their revenues overseas. Analysts expect global markets to continue rising into 2026, with a recent eToro poll showing that 53% of UK retail investors remain optimistic that the current bull market will continue this year..
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