Stocks around the world have soared in 2025, partly thanks to a rally in artificial intelligence-related companies, although UK stock markets have little exposure to the sector.Instead, the biggest winners in 2025 included mining companies like Fresnillo, boosted by rising precious metals prices, defense companies like Babcock and Rolls-Royce as Europe ramped up defense spending, and banks like Lloyds, which benefited from still high interest rates alongside decent economic growth.
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“It’s nice to go into 2026 with a good news story,” said Danni Hewson, head of financial analysis at AJ Bell.
“We’ve been talking about UK equities for a long time, so to start the year on the front foot, and to carry the momentum from 2025 into 2026, that will be impactful psychologically.” UK markets have been plagued in recent years by a lack of IPOs and by companies delisting or moving their primary listings to other markets.
Political instability, bond market volatility and post-Brexit uncertainty have not helped, and with relatively few technology and AI-related companies listed in London, Britain-focused fund managers have battled the feeling that the excitement lies elsewhere.
Hewson said the latter issue could also be an advantage for London-listed shares.
“Investors have once again been looking at UK listed shares, particularly the FTSE 100. People are concerned about a potential AI bubble and are looking for shares that retain value over time, that operate in a global context and don’t fight against geopolitical issues that could impact businesses,” she said.
The FTSE, which is heavily weighted towards internationally focused companies, has also outperformed the domestically focused mid-cap FTSE 250, with the latter up around 9% in 2025.
Yet in 2025, the blue chip index lagged behind other markets such as Japan, Hong Kong, Korea, Spain and Italy.
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