FTSE 100 passes 10,000 for the first time

The FTSE 100 index of leading shares has risen above 10,000 points for the first time in its history.

The milestone was reached on 2 January, the first trading day of the new year, capping a strong run for the London stock market.

A long climb

The FTSE 100 was launched on 3 January 1984, starting at a base level of 1,000 points. It tracks the share prices of the 100 largest companies listed on the London Stock Exchange, and is often used as a barometer of the health of British business.

It has taken more than 40 years to multiply ten times in value. The index suffered heavy falls during the dot-com crash in the early 2000s, the financial crisis of 2008 and the coronavirus pandemic in 2020.

What has driven the rise?

The index is dominated by large international companies, including banks, drug makers, energy groups and mining companies, many of which earn most of their money overseas. Among the biggest are AstraZeneca and HSBC.

Shares in banks and defence companies have performed strongly over the past year, as have those of mining companies, helped by rising prices for gold and other metals.

The London market has also been seen as good value by some investors, compared with the soaring prices of American technology shares.

Not the whole picture

A rising stock market does not necessarily mean the wider British economy is doing well. Many FTSE 100 companies earn most of their profits abroad, and a weaker pound can boost the value of those earnings.

The British economy has been growing only slowly, and unemployment has risen over the past year. Inflation remains above the Bank of England's target of 2 per cent.

Why it matters

Millions of people have a stake in the stock market through their pensions and savings, even if they do not own shares directly. A rising market increases the value of many pension funds.

London's challenges

The milestone comes as the government tries to make London a more attractive place for companies to list their shares. In recent years, several large companies have chosen to list in New York instead, and there have been concerns about the number of companies leaving the London market.

The government and regulators have made changes to listing rules to try to reverse that trend.

A symbolic moment

The milestone is largely symbolic, and markets can fall as well as rise. The outlook for 2026 remains uncertain.