The London stock market concluded 2025 with its most robust yearly performance since the global financial crisis, outpacing major Wall Street indices. The benchmark FTSE 100 index surged 21.5% over the course of the year, while the broader all-share market rose nearly 20%.
This rally was led by standout performers in specific sectors. Mining companies, particularly those focused on precious metals, saw extraordinary gains. Fresnillo led the charge with a staggering 450% increase, propelled by record-high gold and silver prices. The telecommunications sector also saw a major winner, with Airtel Africa’s shares more than tripling in value.
Defence contractors were another major driver of growth, as heightened geopolitical tensions and increased military budgets across Europe spurred investment. Companies like Babcock International and Rolls-Royce saw their share prices soar, reflecting strong demand for military equipment and technology.
Despite the overall bullish trend, the year was not without its volatility or losers. More than a fifth of the FTSE 100 constituents ended the year in negative territory. Notable decliners included distribution and consumer goods firms, with some seeing significant erosion in their market value.
Globally, equity markets experienced their strongest collective year since 2019, rising approximately 21%. The year was marked by significant turbulence, however. Early shocks included a major sell-off in US tech stocks, followed by market panic in spring due to the threat of expansive new international tariffs. Markets later recovered on hopes for future monetary policy easing.
Analysts note that investors sought value and diversification beyond traditional US tech giants, amid a weaker US dollar and ongoing global uncertainties. This shift in sentiment contributed to the strong performance of European and UK indices. The pan-European Stoxx 600 also posted its best year since 2021.
The surge in defensive assets was another hallmark of 2025. Gold recorded its best annual performance in decades as investors hedged against inflation and currency concerns. The US dollar itself had its weakest year since 2017, pressured by economic anxieties and interest rate cuts.
Looking ahead, financial strategists express a cautiously optimistic outlook for European equities, citing improving economic data and fiscal support measures. The strong finish to 2025 has reset expectations, marking a significant rebound for London’s main market.