London’s largest shares have outperformed most of Wall Road’s main averages this 12 months — and because the benchmark FTSE 100 index edges towards an historic milestone, market watchers say its rally might have additional to run. The FTSE 100 index — dwelling to the U.Ok.’s most respected blue-chip corporations — hit a document excessive of 9,930 factors final week. Since then, a sell-off of world shares , fueled by mounting considerations about AI valuations, has dragged the FTSE 100 under the 9,700 degree. .FTSE YTD line FTSE 100 index Nonetheless, the index is simply round 3% off of the ten,000-point threshold, and with a year-to-date acquire of round 17%, it has outperformed each the S & P 500 and the Dow Jones Industrial Common . “The FTSE 100 is inside a whisker of hitting 10,000 and it might solely be a matter of days or hours earlier than reaching this triumphant degree,” Dan Coatsworth, head of markets at AJ Bell, stated in a Nov. 11 notice. Whereas the precise milestone itself may not be significantly vital, Coatsworth identified that the velocity at which the index was transferring between 1,000-point increments was value noting. “It is solely been 119 days for the reason that FTSE 100 hit 9,000, so exceeding 10,000 earlier than the top of 2025 would make it a document breaker,” he stated. “Beforehand, the quickest bounce in blocks of 1,000 occurred when the FTSE 100 went from 5,000 to six,000 which took 229 days within the late 90s.” The U.Ok. index, dwelling to quite a lot of mining giants, has benefited this 12 months from the rising worth of gold, and in addition a broad diversification away from U.S.-heavy fairness portfolios . A powerful presence of utilities companies, usually seen as secure investments in occasions of market volatility, and a European dedication to splurge on protection , have additionally helped raise the FTSE 100 greater over the course of the 12 months. Respite for Reeves? Because the FTSE 100 hovers near the ten,000-point milestone, Coatsworth identified that crossing that threshold could possibly be “a symbolic second for the market and Chancellor Rachel Reeves.” U.Ok. Finance Minister Reeves is because of ship her essential Autumn Finances on Nov. 26 , and is prone to make some unpopular selections when it comes to fiscal coverage updates as she seeks to steadiness the general public funds. Final week, bond markets reacted negatively to reviews that Reeves had U-turned on deliberate revenue tax hikes which might have landed badly with the voters however appeased monetary markets. 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Meadows additionally famous that if the Autumn Finances places strain on the British pound , FTSE 100 constituents — largely worldwide companies — may even see their earnings potential wanting extra engaging. Nevertheless, he burdened the necessity to take a cautious strategy to buying and selling the finances. “After run for the index, do not take a look at what has already gone up,” he suggested. “Watch for the finances mud to settle then revisit the housebuilders as they’re unloved and on low valuations, even in a U.Ok. context, however could be the beneficiaries of future [Bank of England] price cuts. There’s a worth for all the pieces however be selective.” Luca Paolini, chief strategist at Pictet Asset Administration, agreed that the FTSE 100 surpassing 10,000 factors wouldn’t, in itself, be vital — however what it symbolizes is value noting. “It reveals that, despite all dangerous information coming from the U.Ok. , the U.Ok. market has carried out significantly better than usually assumed — in reality, in sterling phrases, it has carried out in step with U.S. equities over the previous 5 years at round 14% [growth per annum],” he stated in an e mail. “We like U.Ok. equities as a result of they’re low-cost (13X worth/earnings ratio, decrease than China and rising markets) and are the most effective hedge towards a ‘stagflationary’ shock to the worldwide financial system due to the excessive share of defensive worth and commodity shares.” BRI’s Meadows famous that there was worth to be discovered within the U.Ok. market, which could possibly be benefiting from traders trying to hedge towards an AI bubble bursting. The FTSE 100, he famous, is basically comprised of conventional industries like banks, power companies, healthcare shares and different sectors which have extra defensive qualities than tech-dominated U.S. indexes. “Because the valuations of [tech stocks] rise, traders will fret in regards to the timing of returns from the large funding in synthetic intelligence infrastructure by the tech giants that dominate the U.S. and international index,” he stated. “So there comes some extent the place the ‘lowly’ valued ‘conventional’ shares that dominate the U.Ok. market grow to be extra comparatively engaging.”