8.10am: FTSE starts 2026 higher
The FTSE 100 has started the new year on the front foot, but with markets still largely in holiday mode.
Early deals saw the index gain 39 points to just over 9,971, setting a new all-time high and approaching the five-digit milestone.
Precious metals miner Fresnillo PLC (LSE:FRES), up 4.5%, is top of the early risers, followed by aerospace parts makers Melrose Industries PLC (LSE:MRO, OTC:MLSPF) and Rolls-Royce Holdings PLC (LSE:RR.), both up just over 2%.
The London equity benchmark closed out 2025 at 9,931.38 points, down 9.3 points on New Year’s Eve but up over 1,600 points or 21.51% over the course of the year.
There’s barely any RNS news out from FTSE companies, though there will be some economic data later this morning in the form of the manufacturing PMI survey for the UK and several other major economies.
To summarise the market backdrop, here’s a helpful update from analyst August Hyldgaard at Danske Bank.
In geopolitics, he notes that US President Trump said the US has escalated attacks on Venezuela with a strike inside the country on a building allegedly connected to drug trafficking. The US also said it struck vessels allegedly carrying drugs in international waters and imposed sanctions on four oil traders.
“Following the meeting between US President Trump and Israeli President Netanyahu, Trump said that the United States would back Israeli strikes on Iran if Iran continued with its ballistic missile and nuclear weapon program.”
Trump said he has heard Iran is “behaving badly” and is looking to restart its nuclear program, while Iranian president Masoud Pezeshkian said that Iran was in an “all-out war” with the US, Israel and Europe.
After China began military drills around Taiwan at the start of the week, Hyldgaard noted that Taiwanese markets “reacted very calmly as the drills appear similar to what we have seen several times in the past”, though they followed just weeks after the US announced $11.1 billion of arms sale to Taiwan.
For the first time, China publicly stated that the goal of the drills is to serve as a warning not only to “separatist forces” within Taiwan, but also for “external interference forces”.
