FTSE 100 hits new highs above 10,000
The UK stock market’s flagship index, the FTSE 100, is at record highs as investors seek out defensive positions and rotate away from the US
The FTSE 100, the index comprising the 100 largest UK-listed companies, has hit new highs during the opening days of 2026, continuing its momentum from a strong year in 2025.
The FTSE 100 returned over 21% in 2025, its best year since 2009.
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“The Footsie has been on the front foot again reaching fresh records of 10,150” early in the year, said Susannah Streeter, chief investment strategist at Wealth Club. Investors, she said, are “seeking solace in the defensive nature of listed multinationals”.
Why is the FTSE 100 at record highs?
The FTSE 100 has benefitted from geopolitical turmoil early in the new year.
“Equity markets are continuing to thrive in 2026 in the face of mounting geopolitical tension,” said Derren Nathan, head of equity research at Hargreaves Lansdown.
Some of the FTSE 100’s top stocks have been beneficiaries of that tension. European defence stocks rose following the US intervention in Venezuela, with Rolls-Royce (LON:RR.), BAE Systems (LON:BA.) and Babcock (LON:BAB) among the beneficiaries.
Positive updates from some of the index’s key constituents have also buoyed the FTSE 100 towards new highs.
These include Whitbread (LON:WTB), owner of Premier Inn, which announced improving Q3 demand as well as a less-than-feared impact from UK business rates on the morning of 13 January, and beverage giant Diageo (LON:DGE) whose plans to streamline its business by offloading some of its Chinese operations raised investors’ spirits.
Given the tariff-driven turbulence that rocked the US economy last year, many investors rotated out of US stocks. The FTSE 100 was one of the indices that benefitted, as (despite its recent gains) UK stocks are relatively undervalued.
“Perhaps momentum, US equities and tech are no longer the only game in town,” said Russ Mould, investment director at AJ Bell. “Further all-time highs could stoke further confidence and fresh interest in the still much-maligned UK equity market.”
How to invest in the FTSE 100
The FTSE 100 is worth considering for UK investors. While it is formed of the largest UK-listed companies, most of these are big and globalised – so it gives exposure to much of the global economy whilst generally sticking to companies that will be known and familiar to you.
Beginner investors looking for fund ideas could consider a tracker fund that follows the FTSE 100.
These include the Vanguard FTSE 100 UCITS ETF (LON:VUKG) or the HSBC FTSE 100 Index Fund.
Some investors prefer to use investment trusts. Active strategies aren’t necessarily the best way to invest in an index as they will incur higher fees and fund managers will, typically, have a specific strategy that aims to outperform the index, so holdings and returns won’t match the FTSE 100 in the same way that a tracker fund would.
But two investment trusts that hold large-cap UK stocks are CT UK High Income Trust (LON:CHI) and City of London Investment Trust (LON:CTY), both of which have around 77% of assets invested in FTSE 100 companies as of their latest updates.
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