- FTSE 100 up 0.5%, FTSE 250 up 0.08%
- Banks, defense firms outperform peers
- Construction, real estate stocks down after housing prices data
Jan 2 (Reuters) - The UK's FTSE 100 flew past the 10,000 points mark for the first time on Friday, riding a wave of upbeat investor sentiment across global markets on the first trading session of 2026.
The blue-chip FTSE 100 rose 0.5% by 1023 GMT, after marking its strongest yearly performance in 16 years on Wednesday.
"(It) is a powerful signal for UK markets, reflecting ongoing confidence in earnings resilience, attractive valuations and the growing appeal of UK equities to international investors at a time when policy headwinds are beginning to ease," said Axel Rudolph, senior financial analyst at IG.
Benchmark stock indexes in Europe, Taiwan and South Korea, among others, hit record highs on Friday, while U.S. stock index futures advanced, as investor sentiment improved.
On the FTSE 100, the defence and aerospace sector led gains, rising 2.3%. Rolls-Royce jumped 2.9%, Melrose Industries advanced 1.9% and BAE Systems rose 1.4%.
Banks followed with a 1.3% advance.
The two were among the best-performing sectors in 2025.
The British benchmark gained nearly 22% in 2025, outperforming Europe's STOXX 600 and the S&P 500. Its gains largely reflect the diversification that the index offers, with little direct exposure to the artificial intelligence sector.
Commodity-linked stocks - oil firms and miners - are heavyweights on the FTSE 100, and have largely benefited from record metal prices and higher oil prices.
Rudolph also pointed out that diversified earnings, strong cash generation and the prospect of a more accommodative Bank of England suggest that the market's outperformance was sustainable even if gains moderate.
London's domestically focussed mid-cap index was up 0.08%.
Meanwhile, data from mortgage lender Nationwide Building Society showed UK house prices unexpectedly fell 0.4% in December, leaving annual growth at just 0.6% for 2025, the weakest since April 2024.
Construction and materials and real estate stocks fell 1.3% and 1%, respectively.
Reporting by Tharuniyaa Lakshmi in Bengaluru; Editing by Harikrishnan Nair
Source: Reuters