Business
FTSE 100 starts new year higher but slips back after crossing 10,000
Blue chips began 2026 in positive fashion on Friday, although the FTSE 100 closed well below early highs which saw the index cross 10,000 for the first time.
The FTSE 100 index closed up 19.76 points, 0.2%, at 9,951.14.
It had earlier traded as high as 10,046.25, a record intraday level.
The FTSE 250 index ended up 61.17 points, 0.3%, at 22,409.21, and the Aim All-Share index closed up 2.44 points, 0.3%, at 768.83.
Dan Coatsworth, head of markets at AJ Bell, said: “Breaking through the 10,000 level is the best new year’s present Chancellor Rachel Reeves could want.
“She has been banging the drum about the merits of investing over parking cash in the bank, and the FTSE 100’s achievements just go to show what’s possible when buying UK shares.
“It also proves to cynics that the UK market is not stuck in the mud, and that the US stock market is not the only place to make money.”
Mr Coatsworth pointed out it has only been 171 days since the FTSE 100 hit 9,000, “so exceeding 10,000 at the start of 2026 makes it a record-breaking leap”.
“Previously, the fastest jump in blocks of 1,000 happened when the FTSE 100 went from 5,000 to 6,000, which took 229 days in the late 90s,” he said.
Jemma Slingo, pensions and investment specialist at Fidelity International thinks there could be more advances to come.
“Despite the milestone, valuations remain attractive – the FTSE 100 still trades at a discount to the US and Europe, even as sentiment towards UK companies improves,” she said.
“With around a quarter of FTSE 100 revenues coming from the US, investors are gaining exposure to global growth at a discount – and with a healthy dividend yield to match.”
Rolls-Royce, a top performer in 2025, was a prominent riser, up 4.1%, while another leading light in 2025, Airtel Africa, climbed a further 1.8%.
But Endeavour Mining, another star performer in 2025, shed 5.7% after Mali and Burkina Faso said they will bar US citizens from entering their countries in response to a similar move by the Trump administration.
The two West African states were recently placed under full entry restrictions under US President Donald Trump’s expanded travel ban.
Endeavour Mining primarily operates in West Africa and has significant gold mining assets in Burkina Faso.
With corporate news thin on the ground, the main early focus in London was on figures on house prices and manufacturing activity.
The final S&P Global UK manufacturing purchasing managers’ index rose to 50.6 points in December from 50.2 in November, a 15-month high, although below the earlier flash estimate of 51.2 points.
Chris Barlow, head of manufacturing at accountants MHA said the data confirmed that “at long last the UK manufacturing sector can look forward to 2026 with modest, albeit patchy, confidence”, following an increase in November and further improvement in December.
Meanwhile, the Nationwide house price index showed UK house price growth cooled to 0.6% year-on-year in December from 1.8% in November.
It is the slowest pace of annual growth since April 2024 and below FXStreet consensus which forecast an increase of 1.2%.
The building society said house prices fell 0.4% in December on-month, reversing a 0.3% gain in November and compared to market consensus which predicted a 0.1% rise.
Housebuilders were mixed after the report, with Barratt Redrow down 0.6% but Berkeley Group up 0.7%.
In European equities on Friday, the CAC 40 in Paris closed up 0.6% and the DAX 40 ended up 0.2% in Frankfurt.
Data showed the eurozone’s manufacturing sector contracted more than expected in December, hitting a nine-month low.
The final Hamburg Commercial Bank eurozone manufacturing purchasing managers’ index, compiled by S&P Global, fell to 48.8 points in December from 49.6 in November, pushing it further below the 50.0-point no-change mark.
The figure came in below the 49.2 flash reading reported in December.
The pound was quoted at 1.3491 dollars at the time of the London equities close on Friday, up from 1.3463 dollars at Wednesday’s close.
The euro was lower at 1.1745 dollars from 1.1754 dollars.
Against the yen, the dollar was trading at 156.64 yen, up slightly from 156.62 yen.
Stocks in New York were mixed at the time of the London close on Friday.
The Dow Jones Industrial Average was up 0.3%, the S&P 500 was flat and the Nasdaq Composite down 0.2%.
Tesla shares fell 1.3% as it reported lower sales than expected in the fourth quarter of 2025, ceding its position as the world’s biggest electric vehicle company in annual sales to Chinese auto giant BYD.
The American company led by Elon Musk logged 418,227 deliveries in the final three months of the year, taking its full-year sales figure to around 1.64 million EVs.
A day prior, BYD reported that it sold 2.26 million EVs last year.
Analysts had expected a more moderate decline in Tesla’s fourth-quarter sales, to 449,000 deliveries, according to a FactSet consensus.
The yield on the US 10-year Treasury was quoted at 4.19% on Friday, stretched from 4.11% on Wednesday.
The yield on the US 30-year Treasury was at 4.87%, widened from 4.80%.
Back in London, Spire Healthcare rose 1.1% after Sky News reported that the company has set a deadline for potential acquirers to signal takeover interest.
Boku rose 5.5% after launching a share buyback of up to 5% of its stock, saying the board believes the current valuation undervalues the business.
Brent oil was lower at 60.09 dollars a barrel at the time of the London equities close on Friday, down from 61.56 dollars late on Wednesday.
Gold was higher at 4,320.16 dollars an ounce at Friday’s close, against 4,315.0 dollars on Wednesday.
The biggest risers on the FTSE 100 were Rolls Royce, up 47.0 pence at 1,197.0p, Burberry Group, up 47.5 pence at 1,316.5p, Melrose Industries, up 21.6p at 610.0p, Centrica, up 4.8p at 174.3p and St James’s Place, up 39.0p at 1,423.5p.
The biggest fallers on the FTSE 100 were Endeavour Mining, down 222.0p at 3,650.0p, Coca-Cola Europacific Partners, down 222.0p at 6,570.0p, Sage Group, down 33.0p at 1,050.0p, Pearson, down 30.5p at 1,019.5p and Games Workshop, down 480.0p at 18,440.0p.
There are no local corporate events scheduled for Monday.
Later in the week, trading updates are due from retailers Next, Tesco, J Sainsbury and Marks & Spencer.
Monday’s global economic calendar has UK mortgage approvals data and the US ISM manufacturing PMI.
Later in the week, eurozone inflation figures and the US jobs report will be published.
– Contributed by Alliance News.
Eleanor LawsonWest Midlands
West Bromwich Emergency Pet Pantry“A lot of people seem to think you shouldn’t have a pet if you can’t feed it, but it’s a bigger picture than that.”
Anita Arthur co-founded Animal Foodbank UK with Robert Miller, after both had volunteered for animal charities and recognised how many people were struggling to feed their beloved pets.
With many food banks not offering pet food, Ms Arthur and Mr Miller, from Redditch, realised there was a need for one offering pet food.
What started off with two £20 donations from its co-founders has now exploded into a community of more than 120 volunteers, covering the expanse of the UK from Scotland down to Cornwall, donating food to almost 6,000 pet owners.
Over the last three years the group, which now has charity status, has donated 150,000 meals for pets in need across England, Scotland and Wales.
Ms Arthur believes they may be the only service in the UK that sends out pet food donations by delivery, as opposed to collection services.
“We don’t have to be referred to. Anybody can call, drop into our drop-in centres and we’ll help them,” Ms Arthur said.
Animal Foodbank UKPeople receive two weeks’ worth of food for their pets each month, and the group also works with other organisations such as homeless accommodation services to help people in need.
The charity does not request proof of low income or benefits in order to send out donations, and there are only two reasons they will not provide donations to an applicant.
“If anybody’s breeding dogs, we won’t help them, because we’ve got to promote responsible ownership,” Ms Arthur said.
“And if people have food off us, then go and get more pets and come back for more food, we will refuse.”
Animal Foodbank UKAnother pet food bank, established more recently in the West Midlands, is the West Bromwich Emergency Pet Pantry, run by 47-year-old Louise Colledge.
With donation points in West Bromwich and Smethwick, the pet pantry tries to cover the whole of Sandwell.
“I used to work for a local charity, which provided a food bank for humans, but a lot of people came in and asked for pet food,” Ms Colledge said.
“I thought it was something missing from the area.”
People can phone, text or email the group for a referral, and can receive a week’s worth of pet food three times over a six-month period, with longer-lasting support provided in more severe circumstances.
West Bromwich Emergency Pet PantryBoth groups recognise the difficult circumstances that can lead to people struggling to provide for their pets.
“We have had a lady who escaped domestic violence and had to leave with her two dogs and the children,” Ms Colledge said.
“We’ve supported her a bit extra, while getting back on her feet and sorting benefits out.”
Over at Animal Foodbank UK, Ms Arthur said they had seen a widow come to them after struggling to pay for her husband’s headstone, while another woman was set back by the cost of euthanising her dog.
“Using her money to end the suffering of her dog meant she was left without money to feed the rest of her pets,” Ms Arthur said.
West Bromwich Emergency Pet PantryWhat is important to both groups is supporting struggling pet owners without judgement and the wider implications that can have for the people they help.
“If we can feed a pensioner’s dog for two weeks, that could allow them to have the heating on. If someone’s car’s broken on the way to work, we can step in,” Ms Arthur said.
“Lots of these people would rather feed their pets than feed themselves.”
Ms Colledge believes in giving people the support they need to keep pets at home with their owners.
She has also seen homeless people turn down accommodation so they can stay with their pets.
“Some people love their pets so much they’ll hand them into a rescue if they can’t afford food, so [our work] also supports the rescues,” she said.
“We do have people that are having to choose whether they feed themselves or their pets.”
Pakistan’s inflation rate slowed more than expected in December, largely due to easing food prices. According to the Pakistan Bureau of Statistics, the consumer price index (CPI) rose 5.6% year-on-year in December, down from 6.1% in November and below the 5.8% median estimate in a Bloomberg survey.
Food prices increased 3.24% year-on-year in December, down from 5.53% in November, while housing and energy costs rose 6.86%.
In response to the slower-than-expected inflation, the State Bank of Pakistan cut the policy rate by 50 basis points on December 15, bringing it to its lowest level in nearly three years.
The central bank cited stable price pressures and the need to support economic growth after keeping rates unchanged for four consecutive policy meetings.
The Finance Ministry had forecast December inflation between 5.5% and 6.5%. Experts say improved food supplies, subdued global oil prices, and limited energy price adjustments helped contain inflation.
However, risks remain from fiscal slippages, global energy supply shocks, and climate change.
Border tensions with Afghanistan disrupted trade, but alternative sources helped maintain food supply, keeping broader inflation pressures under control.
Last Updated:
The All-India Consumer Price Index for Industrial Workers rose by 0.5 points to 148.2, keeping the 12-month average firmly on track to take DA/DR to 60%, from 58% currently.
January 2026 DA Hike.
DA Hike January 2026, DA Hike Latest News: Central government employees and pensioners are set for a 2 percentage point hike in dearness allowance (DA) and dearness relief (DR) from January 1, 2026, with the latest inflation data pointing to the 60% DA/DR level under the 7th Central Pay Commission (CPC).
The trigger is the All-India Consumer Price Index for Industrial Workers (AICPI-IW) for November 2025, released by the Labour Bureau under the Ministry of Labour & Employment on December 31, 2025. The index rose by 0.5 points to 148.2, keeping the 12-month average firmly on track to take DA/DR to 60%.
November AICPI-IW confirms 60% DA trajectory
As per the standard DA formula used for the 7th Central Pay Commission, the rolling 12-month average of AICPI-IW (base year 2016=100) is used to compute the percentage increase over the base index of 261.42. With November’s reading, the calculated DA has reached 59.93%, effectively at the doorstep of 60%.
Month-wise calculations show a steady climb:
- July 2025: 58.53%
- August 2025: 58.94%
- September 2025: 59.29%
- October 2025: 59.58%
- November 2025: 59.93%
Only the December 2025 index reading remains, but scenario analysis indicates that the outcome is now largely locked in.
December scenarios still point to 60% DA
Even under different assumptions for December inflation, the DA outcome does not materially change:
- Index unchanged at 148.2: DA works out to 60.34%
- Index rises to 150.2: DA increases to 60.53%
- Index slips to 146.2: DA still holds at 60.15%
Since the Government of India announces DA only in whole numbers, any figure between 60.00% and 60.99% is officially rounded to 60%. This makes a 2% hike, from the existing 58% to 60%, almost certain.
When will the hike be announced?
While the DA revision takes effect from January 1, 2026, the formal announcement is typically made later. Based on past trends, employees can expect the government to notify the revised DA around March or April 2026, with arrears paid retrospectively from January.
Why this DA hike matters more than usual
This revision is especially significant because January 1, 2026 also marks the formal start of the 8th Central Pay Commission cycle. Historically, when a new pay commission is implemented, the prevailing DA is merged into basic pay and the DA clock is reset to zero under the new structure.
In that sense, the expected 60% DA under the 7th CPC becomes a crucial reference point. It effectively acts as an inflation buffer, influencing discussions around the fitment factor and overall salary restructuring under the 8th CPC.
What employees can expect
If approved as expected, the 2% DA hike will translate into a modest but meaningful increase in monthly take-home salary for serving employees and higher pension payouts for retirees, at a time when retail inflation pressures continue to persist.
Barring an unexpected collapse in December inflation data, the numbers now clearly indicate that 60% DA from January 2026 is a done deal, making this one of the most closely watched DA revisions in recent years.
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January 03, 2026, 10:22 IST
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