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Just a fortnight ago, the FTSE 100 share index looked certain to breach 10,000 points by the end of the year. We’ve been on quite a journey since then.
On 12 November, the Footsie closed at all-time highs of 9,911.42 points. Fears of an artificial intelligence (AI) bubble and a possible stock market crash then pushed it sharply lower.
However, the FTSE 100’s picked up momentum again. And today it’s just 4% away from reaching five-figure territory.
Could it really reach the magic 10,000 point marker before the end of 2025?
Pound pressure
One potential driver could be another fall in the value of the pound.
This could be sparked by a negative reaction to the Autumn Budget later on Wednesday (26 November). Other possible catalysts include fresh rounds of poor UK economic data, and if markets begin pricing in faster or deeper Bank of England interest rate cuts.
A reversing pound often has a powerful effect on where the FTSE heads next. This is because it’s packed with multinationals that earn most of their revenues overseas.
When these are translated back to sterling, the weaker pound provides a bottom-line boost that can lift the index.
Bargain hunt
There’s also a strong chance the FTSE 100 will hit 10k if Christmas bargain-hunting ignites.
Despite its 16% gain in 2025, the index still offers terrific value. Its trailing price-to-earnings (P/E) ratio is 18.8 times. Compare that with readings of 29.6 times for the S&P 500, for instance, or 23.3 for the Nikkei.
HSBC (LSE:HSBA) is just one blue-chip bargain that festive shoppers can consider. The bank’s forward P/E ratio is 9.9 times, while its price-to-earnings growth (PEG) multiple is just 0.9.
Any sub-1 reading shows a share that’s undervalued.
On top of this, HSBC’s prospective dividend yields a market-beating 5.1%.
This low valuation could set the stage for fresh share price gains before Christmas and into the New Year. The HSBC share price has risen 34% so far this year, though the impact of trade tariffs on its Asian markets remains severe.
The bank has so far remained resilient to such pressures — underlying pre-tax profit rose 3% in the last quarter. I think earnings could accelerate as personal wealth levels boom across its emerging markets.
Time to invest?
Guessing the near-term direction of stock markets is risky business, as we’ve seen in recent weeks. And threats remain that could limit the FTSE 100’s momentum for the rest of the year.
Yet history shows the long-term direction of stock markets is ultimately upwards. It’s a matter of time before the UK’s flagship index hits 10,000 points, in my view.
So for long term investors, I think now is a good time to consider buying FTSE-listed shares. I’m building a shopping list of my own before the festive period gets into full swing.
