No dinosaur

How the ‘Jurassic Park’ FTSE 100 roared back to life

- Nils Pratley

It was a bumper year for stock markets globally and the surprise, perhaps, is that the FTSE 100 index more than kept up. The London market has sometimes been derided as lacking dynamism - the hedge fund manager Paul Marshall called it the Jurassic Park of exchanges a few years ago - but its main index enjoyed its best 12 months since 2009. The Footsie didn’t quite make it to 10,000 but still improved by 21.5%, slightly outperforming the S&P 500 index in the US.

How did that happen amid weakening UK growth, pre-budget chaos and general gloom? The short answer is that a stock market index reflects only its constituent parts, not a nation’s economic virility. That is especially true of the Footsie, whose members make about three-quarters of their combined revenues overseas.

The tale of 2025 was one of helpful breezes blowing through many important sectors. Defence stocks enjoyed commitments by Nato’s western European members to spend more on equipment. That assisted companies such as Rolls-Royce, whose remarkable run has taken the shares from sub-100p in 2022 to £11-plus today. Banks have had near-perfect conditions of low defaults and falling interest rates. The bill (for some) from the car finance scandal was brushed off.

Global mining companies, still a significant slice of the Footsie, enjoyed the gold-inspired rally in precious metals plus the demand for copper that comes with energy transition and electrification.