When it comes to the FTSE 100 Index will it, or won’t it reach 10,000? Is the question on most investors’ minds.
As I type we are some 450 points or approximately -5.0% beneath that round number.
The index has added +15.39% year to date, so we would need to see that jump by+ 30.0% to hit the target, and that might be asking too much before year end.
On a five year view the index has rallied +50.0% and to some extent the OoVID 19 downturn has faded from our memory.
If we are to see the index at, and above 10,000 I think it’s more likely to happen in 2026.
And the move may be driven by external factors
Let’s not forget that 70.0% or more of FTSE 100 revenues are generated abroad and not in the UK. Stocks that have performed well in the index over the last 52 weeks included silver miner Fresnilo +258.0%, which has benefited from a weak dollar, combined with fears about global inflation, and excessive national debt levels.
That said, some businesses that make their money in the domestic economy have also fared well, with retailer Next and bankers Natwest Group, up by +47.0% and +46.0% respectively.
There is also a certain amount of survivorship bias in the FTSE 100 index, whose constituents are reviewed on a quarterly basis.
Weak links such as WPP -61.0% and B&M European Value Retail down -50.71%, could well find themselves demoted in the December reshuffle.
From an investors perspective the +3.18% dividend yield offered by the FTSE 100 remains attractive.
FTSE 100 dividends make up the bulk of the £24.60 billion, paid out by uk companies in Q3 2025.
And despite concerns about the health of both the domestic and global economies, we saw dividend increases in 17 out 21 uk sectors in Q3 year over year ,with 8 out of every10 dividend payers, either holding or increasing their dividend.
Overall then there are reasons to be optimistic about the prospects of the FTSE 100.
However there is an elephant in the room in the shape of the forthcoming UK budget.The biggest risk from which would be the introduction of measures that hurt investor confidence.
Particularly, if those measures spook the bond markets ,drive up borrowing costs, and perhaps precipitate a fiscal crisis in the UK.
