Key facts
- The FTSE 100 gained 5% in the first six months of 2026, closing at 10,497.12.
- The FTSE 100 hit a record high of around 10,911 points in February.
- The S&P 500 rose 9.3% in the first half, closing at 7,499.3.
- The Nasdaq Composite surged 12.8% in the first half, closing at 26,213.7.
- The FTSE 250 rose 3.1% in the first half, ending June on 23,013.4 points.
London's primary stock market index, the FTSE 100, concluded the first half of 2026 with modest gains, falling short of the record highs achieved by its New York counterparts. The index closed at 10,497.12, marking a 5% increase for the period. Earlier in the year, it had surpassed the 10,000-point mark for the first time and reached a peak of approximately 10,911 points in February.
The geopolitical turmoil stemming from the outbreak of war in Iran in late February, coupled with a surge in oil prices that fueled inflation, sent ripples through global markets. In contrast, the S&P 500 in New York set new record highs, advancing 9.3% in the first half. The tech-focused Nasdaq Composite led the rally, driven by enthusiasm for AI-related stocks, and recorded a 12.8% gain. The Nasdaq saw a significant rebound in April, jumping 15% after initial war-related losses, boosted by strong earnings from chipmakers.
London's market has struggled to reclaim its previous record closing high, partly due to a lack of the high-growth tech stocks that have propelled US and Asian markets. However, major mining stocks have provided support, alongside improved global sentiment following a peace deal between the US and Iran and a subsequent fragile truce. Dealmaking activity involving five prominent FTSE 100 companies—Schroders, Beazley, Segro, Intertek, and DCC—has also contributed to the index's advance, with international buyers viewing these firms as undervalued.
Schroders, a financial services firm with a 200-year history, is set to be acquired by US asset manager Nuveen for nearly £10 billion, a deal expected to close in the fourth quarter. This takeover, along with other significant bids totaling around £150 billion, has been interpreted by market experts as opportunistic bargain hunting rather than a strong vote of confidence in the London market. Dan Coatsworth, head of markets at AJ Bell, noted that takeovers dominated the UK stock market, partly because the UK market was perceived as undervalued.
The underperformance of some FTSE 100 constituents has been linked to the domestic UK economy's struggle for sustained growth. Housebuilders, in particular, have been impacted by the energy price shock from the Iran war, which stoked inflation and diminished hopes for Bank of England interest rate cuts. This has led to concerns about persistently high mortgage rates, pushing the sector to the bottom of the market. The FTSE 250, considered a better indicator of the UK's domestic economy, rose 3.1% in the first half, ending June at 23,013.4 points, buoyed by companies like Raspberry Pi, Ceres Power, and CMC Markets.