The FTSE 100 is expected to open lower on Wednesday after reaching its highest-ever level, as investors take profits following a strong rally that has already delivered around 22% growth so far this year.
London markets remain firmly in positive territory for 2025, but early signs suggest a calmer session ahead as global cues and currency moves weigh on sentiment.
Why is the FTSE 100 expected to open lower today?
According to market data from IG, FTSE 100 futures point to a drop of around 22 points, or 0.2%, putting the index near 9,919 at the open.
This follows a blockbuster session on Tuesday, when the FTSE 100:
- Closed at a record high of 9,940.71
- Hit an intraday peak of 9,954.32
- Rose 0.8% in a single day
In simple terms, after such a sharp rise, some investors are choosing to lock in gains rather than push prices even higher straight away.
“After a near-20% year-to-date surge, a period of consolidation is healthy rather than worrying,” one UK-based market analyst told financial media on Tuesday.
How strong has the FTSE 100 been in 2025 so far?
The performance of the FTSE 100 this year has surprised many retail investors, especially after a more modest 5% gain in 2024.
FTSE 100 performance snapshot
| Timeframe | FTSE 100 Change |
|---|---|
| 2024 full year | +5% |
| 2025 year-to-date | ~+22% |
| Tuesday session | +0.8% |
The figures underline just how dramatic the turnaround has been for UK equities.
After years of lagging behind US and European markets, the FTSE 100 has become one of the standout performers of 2025, helped by its heavy weighting in banks, energy, mining, and defence stocks.
Market analysts say the current dip reflects natural profit-taking after rapid gains rather than a loss of confidence in the UK market.
“When an index hits fresh records after a near-20% run, it’s normal to see investors take some money off the table,” a London-based equity strategist told financial media on Tuesday.
Which sectors are driving the FTSE 100’s gains?
One of the biggest contributors this year has been the mining and precious metals sector. Fresnillo has emerged as a standout performer, with its share price rising roughly fivefold in 2025 alone.
The surge has been fuelled by strong commodity prices, particularly gold, which has hit several record highs this year. Although gold eased slightly on Wednesday morning, it remains far above levels seen at the end of 2024.
The aerospace and defence sector has also delivered exceptional returns. Rolls-Royce and Babcock have both roughly doubled in value, while BAE Systems is up around 50%.
Increased defence spending and long-term government contracts have made these stocks especially attractive to investors seeking stability and predictable revenues.
UK banks have staged a notable comeback as well. Lloyds, Barclays, and NatWest have all posted gains of more than 60%, while Asia-focused lenders Standard Chartered and HSBC have benefited from improved global growth expectations and stronger margins.
Which FTSE 100 stocks are under pressure?
Not all household names have enjoyed the rally. Diageo has been one of the weakest performers in the index this year, with shares down around 37%, reflecting concerns over slowing demand and cost pressures.
Advertising group WPP would have been the FTSE 100’s worst performer, down roughly 60%, had it not been relegated from the index earlier this month.
Its struggles highlight how company-specific issues can still outweigh broader market strength.
The housebuilding sector presents a mixed picture. While Persimmon has edged higher, other builders such as Barratt and Redrow remain under pressure due to higher mortgage costs and cautious UK buyers.
What are global markets and currencies signalling?
Sterling slipped slightly against the US dollar on Wednesday morning, trading near $1.3455, though it remains well above levels seen at the end of last year.
Oil prices have also cooled, with Brent crude hovering just above $61 a barrel, far below its 2024 highs.
Overnight, Asian markets were mixed, and US stocks closed marginally lower ahead of key American labour market data.
Investors are keeping a close eye on the US Federal Reserve, which cut interest rates to 3.50%–3.75% in December and has signalled that further reductions remain possible if inflation continues to ease.
“Most participants believed further downward adjustments would likely be appropriate if inflation declined over time as expected,” the Federal Reserve said in minutes from its latest policy meeting.
