The stocks extending FTSE 100 rally past 10,000
A Santa rally has spilled over into 2026 and investors remain optimistic. City writer Graeme Evans names the best-performing shares and FTSE 100 growth companies to watch in 2026.
6th January 2026 14:18
by Graeme Evans from interactive investor
A record Rolls-Royce Holdings (LSE:RR.) share price and strong starts to the year by Glencore (LSE:GLEN) and HSBC Holdings (LSE:HSBA) today highlighted optimism that the FTSE 100 index is well set to build on its 10,000 landmark in 2026.
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Rolls, BAE Systems (LSE:BA.) and Babcock International Group (LSE:BAB) have already added at least 9% in the first three trading days of the year, while Prudential (LSE:PRU) and British Airways owner International Consolidated Airlines Group SA (LSE:IAG) are among a large number of stocks up by 3% or more.
Their performances today helped the £2.4 trillion-valued FTSE 100 index set a new peak of 10,114, having closed above the five-figure threshold for the first time on Monday.
The milestone compares with the pandemic-low of 4,898.79 on 16 March 2020 and 7,544.83 in the wake of US President Donald Trump’s Liberation Day tariffs announcement in April.
The index increased by 1,758.36 points across 2025, with the 21.51% advance the largest annual percentage rise since 2009’s 22.07%.
Goldman Sachs today added another 100 points to its 12-month FTSE 100 index forecast at 10,400, while Panmure Liberum is even more bullish after predicting another year of double-digit returns in the UK and Europe.
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The City firm expects large fiscal spending programmes on defence and infrastructure to boost GDP growth and stock market returns alike. In the US, it predicts that the Federal Reserve interest rate cuts will create an artificial boost before the music stops in 2027-28.
Panmure Liberum added: “Crucially, we think the bond doom loop in the UK and eurozone towards higher long-term yields will be broken. Lower bond yields favour a rotation from value stocks into growth stocks in 2026.”
In terms of the FTSE 100 growth companies to watch, the investment bank highlights Aviva (LSE:AV.) as well as fellow insurers Prudential and Admiral Group (LSE:ADM), the software company Sage Group (The) (LSE:SGE) and the tech-adjacent London Stock Exchange Group (LSE:LSEG) and Experian (LSE:EXPN).
Growth stocks mentioned in the FTSE 250 include property companies Sirius Real Estate Ltd (LSE:SRE), Great Portland Estates (LSE:GPE) and Hammerson (LSE:HMSO).
The bank reiterated its analysis in March that UK and European markets are in the early stages of a secular bull market, which offers double-digit annual returns for the coming decade.
It said that oil and gas and telecoms are likely to be blessed with high earnings growth and high total returns, adding that UK real estate should outperform and Europe banks do well.
The bank warns that the decade will still see significant drawdowns, but that these will be less extreme than in a secular bear market and that time underwater will be substantially shorter.
Company | Price | Share price change today (%) | Share price change in 2026 (%) | Forward PE ratio | Forward dividend yield |
1389.5p | 3.2 | 11.8 | 24.2 | 0.7 | |
1891.25p | 2.2 | 10.3 | 24.8 | 1.9 | |
1256.5p | 2.0 | 9.3 | 43.8 | 0.7 | |
5438p | 2.1 | 6.9 | 19.2 | 1.6 | |
623.5p | 0.6 | 6.0 | 19.4 | 1.2 | |
3473.5p | 0.4 | 5.9 | 42.2 | 1.0 | |
2303.5p | 2.2 | 5.7 | 15.1 | 3.0 | |
3524p | 0.8 | 5.7 | 29.2 | 1.9 | |
1457.75p | 0.3 | 5.3 | 17.7 | 1.2 | |
1196.25p | 1.5 | 4.5 | 15.2 | 1.7 |
Source: ShareScope. Past performance is not a guide to future performance.
In the first three trading sessions of this year, the benefits of the “old economy” FTSE 100 index have been on show after strong demand for defence, commodity and retail stocks.
Geopolitical events have helped accelerate the return of BAE Systems towards the 2,000p threshold reached in October, while Rolls-Royce and Babcock International set fresh records during today’s session at 1,269.5p and 1,399p respectively.
Other strong performers at the start of 2026 have included Glencore and Antofagasta (LSE:ANTO) after copper futures traded at a new high, while Asia-focused HSBC has mirrored the strong progress of Hong Kong’s Hang Seng index by lifting 3.5% on top of 2025’s 50% advance.
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Prudential is up 4%, which includes today’s strong showing after it unveiled a share buyback programme worth $1.2 billion (£900 million). Chief executive Anil Wadhwani added: “I am pleased with the progress we are making in executing our strategy.”
“The significant growth opportunities ahead of us have not changed and we remain firmly focused on creating long-term shareholder value through high-quality, sustainable growth, and consistent delivery of shareholder returns.”
Pru shares have risen by more than 80% in the past year.
Sainsbury (J) (LSE:SBRY)posted one of today's best performances in the FTSE 100 after Worldpanel by Numerator figures showed the grocer’s sales rose 5.2% in the four weeks to 28 December.
Its market share now stands at 16.3%, which compares with a decade high for Tesco (LSE:TSCO) of 28.7% after sales rose 4.3% on a year earlier.
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