FTSE 100 hits record highs in 2026: how oil, mining and banks powered London past 10,000

London's leading share index has been on a remarkable run. The FTSE 100 has climbed to a series of record highs in 2026, standing out at a time when some of the world's largest markets have faced sharp swings.

In this article, we look at how far the index has risen and the main reasons behind its strength. It is a story less about a booming economy and more about the particular mix of companies that make up the UK's benchmark.

A record-breaking run

According to Fidelity, the FTSE 100 reached a new all-time high in late July 2026, recovering and then exceeding its previous record set in late February. Market reports note that the index had already passed the symbolic 10,000 point mark earlier in the year.

The milestone caps a sustained advance. Fidelity states that the index has posted six consecutive quarterly gains, its best run since the recovery from the Covid pandemic, and points to an annual return of 23.6 percent across 2025 and 2026.

Old-economy strength

One of the key reasons is somewhat counterintuitive. According to Fidelity, technology makes up only about 2 percent of the FTSE 100, compared with roughly 40 percent of the S&P 500, which has helped insulate London from sell-offs in technology and artificial-intelligence stocks.

Traditional sectors have done much of the heavy lifting. The source highlights the strength of oil majors such as BP and Shell, together worth around a tenth of the index, alongside mining and commodity firms including Rio Tinto, Glencore, Anglo American and Antofagasta.

Banks and valuations

The banking sector has also supported the rally. According to Fidelity, higher interest rates have benefited major lenders such as HSBC, Barclays, Lloyds, NatWest and Standard Chartered by widening the margins they earn on lending.

Valuations have added to the appeal for investors. The source notes that the FTSE 100 has traded at around 12.5 times earnings, against 20.1 times for the S&P 500, while offering a dividend yield of 3.5 percent compared with 1.4 percent in the United States.

A calmer political backdrop

Politics has played a part too. According to Fidelity, markets responded favourably to new government leadership, with a more stable political backdrop helping to support sentiment towards UK assets during the period.

Taken together, these factors help explain why the index has outperformed. Rather than resting on a single catalyst, the rally reflects a combination of sector strength, attractive valuations and a steadier domestic backdrop.

The bigger picture

It is worth noting what the rally does and does not represent. Much of the strength stems from the make-up of the index, particularly its weighting towards energy, mining and finance, rather than from a broad transformation of the wider economy.

As always, past performance is not a guarantee of what comes next. Share indices can fall as well as rise, and a market that has benefited from high commodity prices could be exposed if those conditions change.

What to watch

Looking ahead, investors are likely to keep a close eye on oil and commodity prices, global swings in technology shares and the path of interest rates. Each of these could influence whether the FTSE 100 can hold its recent gains.

In short, 2026 has been a standout year for London's blue-chip index. Its record run highlights the value of a diversified, old-economy market at a moment when parts of the global market have looked far more volatile.