Investor confidence may have soured on the FTSE 100 in the 2020s, but the trend seems to have been bucked in 2025. London’s leading index is on course for a 19.5% gain for the year – surpassing even the AI-filled American counterpart, the S&P 500!
It seems investors like the look of a range of ‘defensive’ blue-chips with world-beating dividend yields and this trend could continue into this year. I think the FTSE 100 could even pass 12,000 in 2026. Here’s how it might happen.
Strength
First, a word on the numbers here. The FTSE 100 sits at 9,871 points as I write in late December, meaning an increase of 21.5% is required to hit that magical 12,000 mark. That’s not far off the 2025 increase.
Crucially, this ignores dividends. That means the overall return of the FTSE 100 over the last year has been even higher. But overall, climbing in points is a tough task.
Much will depend on the types of sectors that make up the Footsie. Banks, insurers and finance stocks are a huge part of the index, for example. One of the reasons for 2025’s strength was interest rates staying higher for longer, which benefits firms like Standard Chartered and Lloyds.
Defence is another heavily weighted aspect of the FTSE 100. If military spending continues to climb globally, then 2026 could be a banner year for firms like Rolls-Royce, BAE Systems and Babcock, which could help carry the index to that 12,000 mark.
The best sector for 2025 was undoubtedly mining as Endeavour Mining posted a 166% gain and Fresnillo a 402% one. This was on the back of increased asset prices as gold and silver soared to new records. Looking ahead to 2026, I think this could be one to watch.
For the future?
One FTSE 100 stock that might lead the vanguard is Glencore (LSE: GLEN). Shares in the mining giant fell 59% from 2023 to 2025, but its fortunes might be turning around in the year to come.
One of the major metals it produces is copper which will be key in all sorts of modern industries. The metal is crucial for electric vehicles, and solar and wind power. Glencore could benefit from higher demand as the green revolution progresses. Add in its role in the data centres used for artificial intelligence and there could be something of an AI play here too.
The firm mines nickel and cobalt as well – two more metals that will be very much required in the push to net zero. If prices of these metals rise like gold and silver did in 2025, then that will be good news for Glencore.
It’s worth bearing in mind that substantial revenues are still drawn from coal mining – an industry that looks like it has a shelf life. This could drag on the share price in the next year too.
The bottom line? If the FTSE 100 surges past 12,000 in 2026 then there’ll be plenty of big names to surge alongside it. Glencore could be one of these and I’d say it’s worth a look.
