Britain’s main stock market index is ending 2025 close to record territory, rounding off one of the strongest years for London shares in more than a decade.
The FTSE 100 edged higher in early trading on the final day of the year, rising by around nine points to 9,949, just shy of the intraday high of 9,954 set a day earlier.
The Ftse 100 had already closed at a fresh all-time high of 9,940 on Tuesday, as late-year optimism continued to lift markets in the City.
Up more than 21 per cent since the start of January, the index is on course for its strongest annual performance in 16 years, its best showing since the rebound that followed the 2008 financial crisis.
This marks the fifth consecutive year of positive returns for London’s premier stock gauge.
Mining companies, precious metals producers, defence firms and banking stocks have powered this year’s exceptional performance.
The surge in gold prices throughout 2025, combined with a weakening US dollar, created favourable conditions for many of the internationally-focused businesses listed on London’s top-flight index.
The City has outperformed Wall Street, with the S&P 500 posting a comparatively modest 17.2 per cent gain over the same period.
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GETTY/GOOGLE
For the first time in years, the City has outperformed Wall Street, with the S&P 500 posting a comparatively modest 17.2 per cent gain over the same period.
Europe also lagged behind, as the pan-European STOXX 600 rose by 16.6 per cent across the year.
Hopes of further Bank of England interest rate cuts, combined with the attraction of UK shares as a relatively cheap diversification option during a period of global uncertainty, helped draw investors back to British equities after a long spell of underperformance.
Markets are due to close at 12.30pm ahead of the New Year’s Day bank holiday
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GETTYTrading was quieter on Wednesday morning, with markets due to close at 12.30pm ahead of the New Year’s Day bank holiday.
The shortened session brought little in the way of company news, with thin volumes as investors wound down for the festive break.
Danni Hewson, head of financial analysis at AJ Bell, highlighted how the international composition of London’s leading index shielded it from the sluggishness affecting the more domestically oriented FTSE 250.
European markets had delivered strong annual returns
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GETTY“Investors have been looking beyond the usual suspects for value and diversification as the US dollar came under pressure and the world continued to be beset with geopolitical turmoil and fears of an AI bubble,” she said.
Ms Hewson added that European markets had delivered strong annual returns, with recent gains likely to sustain momentum heading into 2026.