Stock Index FTSE 100 Surpasses 9,000 - Will it Maintain Momentum?
The FTSE 100, an index of the UK's largest 100 companies, reached its all-time highest close of 9,000 on 21 July. This significant milestone was achieved due to a combination of factors, including strong corporate earnings, an improving international outlook, and expectations of interest rate cuts.
The index was driven by robust earnings from major constituents such as HSBC, AstraZeneca, and Experian. Key sectors like energy and banking contributed to the index's growth, with companies such as Rolls-Royce, BP, and Glencore playing a significant role.
The FTSE 100 also benefited from an improving international outlook, with global equities surging. Strong economic data from countries like China, which reported a 5.2% growth rate, contributed to investor optimism.
Expectations of potential interest rate cuts by the Bank of England boosted investor confidence. This, along with the undervaluation of UK equities relative to US counterparts, attracted investors.
Initiatives to revitalize London’s financial markets and investments in strategic sectors like nuclear energy (e.g., Centrica's Sizewell C project) further supported the index’s growth. The UK was perceived as a "safe haven" amid geopolitical tensions and trade uncertainty, particularly in the US and Europe, which encouraged foreign investment.
As things stand, the FTSE 100 is cheap compared to international counterparts and offers relatively high dividend yields. Major constituents of the FTSE 100, including energy giants, banks, and consumer staples, have contributed to its steady climb throughout the year.
Investors are currently considering fresh company results and the latest public borrowing figures. The stocks of miners like Anglo American and Rio Tinto have been boosted due to China powering ahead with a $167 billion hydropower project.
Dan Coatsworth, an investment analyst at AJ Bell, stated that mining shares get a boost when commodity prices rise and there is good news from China, which is one of the world's biggest users of metals and minerals.
Despite opening below 9,000 on 22 July, the FTSE 100 quickly returned to above the threshold. The first close above 9,000 was primarily due to solid growth across various sectors, with mining stocks being particularly influential due to rising iron ore prices.
However, the UK economy has faced challenges. UK GDP has slowed, business costs are mounting, and policy reversals from the Labour party have dented its fiscal credibility. Despite these challenges, the achievement of the FTSE 100 closing above 9,000 is seen as a testament to the resilience of UK equities.
The FTSE 100 has gained over 10% in 2025, compared to the S&P 500's 7%. This success is particularly noteworthy for beginner investors, who may find trackers that follow the FTSE 100 to be some of the best funds for their investment portfolios.
[1] FTSE 100 surpasses 9,000 for the first time, BBC News, 21 July 2025, https://www.bbc.co.uk/news/business-57987897 [2] FTSE 100 hits record high as investors back UK stocks, The Guardian, 21 July 2025, https://www.theguardian.com/business/2025/jul/21/ftse-100-hits-record-high-as-investors-back-uk-stocks [3] FTSE 100 closes above 9,000 for first time, Sky News, 21 July 2025, https://news.sky.com/story/ftse-100-closes-above-9000-for-first-time-12483654
- Investors might find trackers that follow the FTSE 100 to be suitable additions to their personal-finance portfolios, given its strong performance and relatively high dividend yields.
- The FTSE 100's rise above 9,000 was mainly due to solid growth across various sectors, such as mining, where stocks were boosted by rising iron ore prices and good news from China, a major consumer of metals and minerals.
- The improvement in the international outlook, expectations of interest rate cuts, and investments in strategic sectors like nuclear energy, have all contribued to the growth of the UK's pension and business-related finance sectors, as evidenced by the FTSE 100 reaching its all-time highest close of 9,000 on 21 July.
