The FTSE 100 closed above 10,000 for the first time last night as mounting global tensions following the US attack on Venezuela sent defence stocks soaring.
With Donald Trump issuing threats against Greenland, Colombia and Mexico in the wake of the capture of Venezuelan leader Nicolas Maduro, the blue-chip index in London closed up 53.43 points at 10,004.75.
Jason Hollands, managing director of online investment platform Bestinvest, hailed ‘a major symbolic milestone for a market that has been somewhat unloved in recent years’.
Britain’s defence giants were among the biggest risers with Babcock International up 5.8 per cent, BAE Systems gaining 5.5 per cent and Rolls-Royce jumping 2.9 per cent to a record high.
Mining stocks were also onthe march as the latest bout of geopolitical uncertainty drove the gold price up as much as 2.9 per cent and silver up 7.2 per cent.
The oil price fluctuated, with Brent crude dropping as low as $59.75 a barrel before rising back towards $62 as investors digested Trump’s plans to overhaul the Venezuelan oil industry.
FTSE rally: Britain’s defence giants were among the biggest risers with Babcock International up 5.8%, BAE Systems gaining 5.5% and Rolls-Royce jumping 2.9% to a record high
While Venezuela accounts for less than 1 per cent of global output, the Latin American country holds around 17 per cent of reserves.
Trump has said he expects the biggest US energy companies to return to Venezuela and spend billions of dollars upgrading the oil industry’s creaking infrastructure to boost output.
Analysts at JP Morgan said the nation could triple oil output within a decade – with production rising from 800,000 barrels a day now to as much as 2.5m.
The prospect of increased production sent oil prices lower in early trading. But crude later bounced back as experts cast doubt over how quickly output can be boosted.
Jack Janasiewicz, a portfolio manager at Natixis, said: ‘We have heard much about the vast oil reserves that Venezuela sits upon.
Given the dilapidated state of the oil infrastructure within the country, harnessing such reserves would likely take years and significant investment.
While President Trump has insinuated that US oil companies stand to benefit from the reconstruction effort, we remain a bit sceptical.’
Nevertheless, shares in US oil firms rallied in New York amid hopes they will cash in on access to Venezuela’s vast reserves.
Chevron, the only major US oil company still operating in Venezuela, rose 5.8 per cent, ExxonMobil gained 2.4 per cent and ConocoPhillips added 3.6 per cent.
Back in London, the record-breaking start to the year for the FTSE 100 follows gains of more than 20 per cent in 2025, its best performance since 2009.
Gerald Toledano, head of equities at FTSE Russell, said: ‘The FTSE 100 passing 10,000 points is a landmark moment for the UK market.
It demonstrates the enduring dynamism of British companies and the important role London continues to play as a global financial centre.’
But Neil Wilson, UK investor strategist at Saxo, warned of uncertainty ahead. ‘Markets are never very good at pricing geopolitical risk or events.
Usually, as an investor, it’s best to keep calm and carry on – fundamentals win out in the end,’ he said.
DIY INVESTING PLATFORMS
Affiliate links: If you take out a product This is Money may earn a commission. These deals are chosen by our editorial team, as we think they are worth highlighting. This does not affect our editorial independence.