European shares hit a record high on Friday in the first trading session of 2026 – with London’s FTSE 100 breaching 10,000 for the first time – after capping the previous year with stellar gains, as defence shares led the advances.
The pan-European Stoxx 600 index rose 0.6 as investors returned from new year celebrations. The benchmark index has advanced for three weeks in a row.
The index finished 2025 up 17 per cent, marking its best showing since 2021 on the back of falling interest rates, Germany’s fiscal boost, and a rotation out of lofty US tech names.
DUBLIN
The Iseq All-Share index rose to an all-time high of 13,152.17 during trading before ending the session up 0.4 per cent at 13,145.49.
READ MORE
Banking stocks were in demand – in line with a broader trend across Europe – as investors continued to speculate that the next European Central Bank move will be a rate hike.
AIB added 1.3 per cent to close at €9.32, while Bank of Ireland gained 2.1 per cent to €16.71 and PTSB – which doubled in value last year to make it the best-performing Iseq stock – advanced 2.5 per cent to €2.93.
Another huge corporate tax take to AI’s next phase: What’s in store for 2026?
However, Kerry Group lost 2.2 to close at €76.25, continuing a downward trend from last year amid concerns over its sales volumes. Ryanair edged 0.5 per cent higher.
LONDON
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 index was not able to stay above the key psychological level for long and ended the session up 0.2 per cent at 9,951.14.
On the FTSE 100, the defence and aerospace sector led gains, with Rolls-Royce, Melrose Industries and BAE Systems each advancing.
Banking stocks were also in demand.
Meanwhile, data from mortgage lender Nationwide Building Society showed UK house prices unexpectedly fell 0.4 per cent in December, leaving annual growth at just 0.6 per cent for 2025, the weakest since April 2024.
Construction and materials and real estate stocks fell.
EUROPE
Bourses across the region were mostly higher, though trading volumes remained thin. The market in Switzerland was closed on the day and will resume trading from next week.
Within the Stoxx 600, defence stocks and heavyweight banking shares were in demand.
Basic resources shares ended the session higher, while the energy index also rose, tracking strength in precious metals and crude prices on the day.
On the flip side, real estate shares were generally lower.
In other moves, shares of Orsted rose 4.6 per cent after the Danish offshore wind developer said it was challenging the US government’s suspension of a $5 billion (€4.3 billion) offshore wind project in which it is involved.
NEW YORK
The S&P 500 and Nasdaq were ahead in early afternoon trading, with technology stocks leading the rally, as risk sentiment improved after multiple dour sessions in the final days of a roller-coaster 2025.
On Friday, tech stocks staged a comeback, with heavyweight Nvidia up and Broadcom also rising.
The final sessions of 2025 bucked expectations for a Santa Claus rally, a seasonal pattern in which markets tend to get a late boost over the last five trading days of December and the first two of January, according to the Stock Trader’s Almanac.
Still, the S&P 500, Dow and Nasdaq ended the year with double-digit gains - their third consecutive year in the green, a run last seen during 2019-2021. The Dow posted its eighth monthly gain on the trot, the longest such streak since 2017-2018.
On Wednesday, US president Donald Trump signed a proclamation to delay increases in tariffs for upholstered furniture, kitchen cabinets and vanities for another year, the White House said.
Shares of several furniture retailers, including Wayfair, Williams-Sonoma and RH rose.
However, Tesla declined on confirmation that it has ceded its crown as the world’s top electric vehicle maker to China’s BYD after annual sales fell for a second year, with intensifying competition, the expiration of US tax credits and damage to the automaker’s brand hurting demand. – Additional reporting: Reuters
