London open: Stocks start 2026 on a high note

London stocks opened higher on the first trading day of 2026 on Friday, recovering from a weaker finish to last year as the market continued to hover around record territory.

The FTSE 100 rose 0.75% to 10,005.66 by 0831 GMT, pushing above the 10,000 level after closing 2025 just shy of that mark, while the FTSE 250 added 0.23% to 22,522.20.

It came despite a subdued backdrop, with trading volumes expected to remain thin as many investors stayed away for the New Year holiday and with little in the way of major corporate or economic catalysts.

Looking ahead, attention was set to shift quickly to next week’s data calendar, with US jobs numbers expected to set the tone for global markets.

Michael Hewson at MCH Market Insights said recent payroll data had already highlighted a loss of momentum in the US labour market, noting that “clear signs that the US labour market, after a strong H1, has seen a sharp slowdown in H2,” with hiring weakening further in recent months.

He added that the slowdown “is also being reflected in the ADP jobs report which has seen similar weakness in recent months, with three of the last four months showing a decline in hiring,” underlining why the December non-farm payrolls report could prove pivotal for sentiment.

In the UK, investors were also focused on a heavy slate of retail earnings, including updates from Tesco, Sainsbury’s, Next, Marks & Spencer and Greggs, expected to provide an early indication of consumer spending over the crucial Christmas period.

Hewson cautioned that the final quarter may prove challenging for discretionary names, saying that for Next “this last quarter is likely to be a challenging one given the lead-up to the budget which took place at the end of November, and the prevailing gloom which has seen a sharp slowdown in consumer spending in the last few weeks,” despite the retailer having been a “relative outlier over the past few quarters.”

UK house price growth slows at the end of 2025

On the economic front, UK house price growth slowed sharply at the end of last year, according to fresh data from Nationwide.

The lender’s monthly house price index fell to 543.0 in December from 545.2 in November, with average prices easing to £271,068.

Annual house price growth slowed to 0.6%, down from 1.8% in November and marking the weakest year-on-year increase since April 2024.

Nationwide chief economist Robert Gardner said prices “ended 2025 on a softer note”, though he noted that the slowdown partly reflected the strong 4.7% annual growth recorded in December 2024.

“Despite the softer end to the year, the word that best describes the housing market in 2025 overall is ‘resilient’,” Gardner said, adding that mortgage approvals remained near pre-Covid levels despite subdued consumer sentiment and mortgage rates running at around three times their post-pandemic lows.

For the fourth quarter as a whole, UK house prices rose 1.7%, with modest annual growth across most regions.

East Anglia was the exception, where prices fell 0.8%, marking the first annual regional decline since the second quarter of 2024.

Northern Ireland continued to outperform, with prices up 9.7% year on year.

Gardner said that despite these gains, prices in Northern Ireland remained around 5% below their 2007 peak, while UK prices are almost 50% higher over the same period, leaving the typical Northern Irish home priced at around 79% of the UK average, compared with around 25% above the average in 2007.

Small-cap tech firms among the morning’s movers

Corporate news was sparse within the FTSE 350, though among smaller stocks, vision-based monitoring technology group Seeing Machines slipped after announcing the creation of a dedicated Future Mobility Group to support growing demand from the autonomous driving sector, aimed at working with customers as self-driving vehicle programmes scale globally.

Battery manufacturer Invinity Energy Systems meanwhile edged higher after securing two new sales totalling 20MWh to Hungarian partner Ideona, comprising two Endurium systems due for delivery in the first half of 2026 for solar-plus-storage projects, marking its fourth and fifth sales into the Hungarian market and a repeat order from the customer.

Reporting by Josh White for Sharecast.com.

Market Movers

FTSE 100 (UKX) 10,005.48 0.75%
FTSE 250 (MCX) 22,520.47 0.22%
techMARK (TASX) 5,655.12 0.55%

FTSE 100 - Risers

InterContinental Hotels Group (IHG) 146.00p 39.58%
Fresnillo (FRES) 3,500.00p 4.98%
Melrose Industries (MRO) 610.40p 3.74%
Rolls-Royce Holdings (RR.) 1,181.50p 2.74%
Entain (ENT) 785.80p 2.50%
Croda International (CRDA) 2,756.00p 2.26%
Burberry Group (BRBY) 1,297.50p 2.25%
Antofagasta (ANTO) 3,345.00p 2.01%
Glencore (GLEN) 414.50p 1.96%
Babcock International Group (BAB) 1,267.00p 1.93%

FTSE 100 - Fallers

British American Tobacco (BATS) 4,150.00p -1.52%
Coca-Cola Europacific Partners (DI) (CCEP) 6,780.00p -1.02%
British Land Company (BLND) 400.40p -0.84%
Smith & Nephew (SN.) 1,229.50p -0.73%
SEGRO (SGRO) 717.00p -0.47%
DCC (CDI) (DCC) 4,610.00p -0.43%
Auto Trader Group (AUTO) 584.20p -0.38%
Imperial Brands (IMB) 3,108.00p -0.35%
Legal & General Group (LGEN) 261.10p -0.31%
Flutter Entertainment (DI) (FLTR) 16,090.00p -0.25%

FTSE 250 - Risers

Ocado Group (OCDO) 244.90p 3.77%
Diversified Energy Company (DI) (DEC) 1,110.00p 3.26%
Princes Group (PRN) 463.50p 3.00%
Pan African Resources (PAF) 124.40p 2.81%
Baltic Classifieds Group (BCG) 208.00p 2.46%
Foresight Environmental Infrastructure Limited (FGEN) 67.40p 2.43%
BlackRock World Mining Trust (BRWM) 823.00p 2.36%
Hochschild Mining (HOC) 525.50p 2.34%
Fidelity China Special Situations (FCSS) 308.50p 2.32%
Currys (CURY) 128.90p 2.30%

FTSE 250 - Fallers

Big Yellow Group (BYG) 1,018.00p -2.68%
IntegraFin Holding (IHP) 351.00p -2.50%
Target Healthcare Reit Ltd (THRL) 95.70p -1.95%
B&M European Value Retail S.A. (DI) (BME) 166.00p -1.66%
Unite Group (UTG) 551.00p -1.52%
Wickes Group (WIX) 232.00p -1.28%
Johnson Service Group (JSG) 133.40p -1.19%
Coats Group (COA) 83.50p -1.18%
RHI Magnesita N.V. (DI) (RHIM) 2,750.00p -1.08%
Caledonia Investments (CLDN) 377.00p -1.05%