Like the CAC 40, DAX and IBEX, the FTSE 100 is one of the most important European indexes. Before you invest, read our guide for some essential information.
The FTSE 100 is one of the most important European indexes. Its share price is quoted as often as that of the CAC 40, DAX and IBEX. The UK's withdrawal from the European Union has brought major changes to the stock market and financial world, but the status of the FTSE remains unchanged. Despite Brexit taking effect, the Footsie remains one of the world's leading stock market indexes.
Many observers and stock market experts argue that the Footsie index is the benchmark and barometer of the UK's economic health. In this article, you’ll find information on the main British stock market index, including an introduction and its history, characteristics, how the index is calculated, composition, stock market news (prices and investment) and performance.
Investing in this stock requires knowledge and control of several internal and external economic, political and market factors.
FTSE is the acronym for Financial Times Stocks Exchange. Footsie is the colloquial usage of its name. The FTSE is a British stock market index created on January 3rd 1984. At the beginning, the value was 1000 points.
The FTSE is an index belonging to the London Stock Exchange and is the main index of the London Stock Exchanges, the main financial market in the UK. The FTSE 100 is one of several indexes of the FTSE Group, which includes the FTSE 250, FTSE 350 index, FTSE SmallCap Index, and FTSE all share Index.
Its name says it all: the number 100 refers to the 100 largest British companies listed on the FTSE 100 index. More than 80% of the companies that make up London's market capitalisation are listed on the Footsie.
The following is a list of the 41 largest companies in the Footsie 100 by market capitalization, listed in descending order based on the market capitalization value of each stock:
This list is not exhaustive and not definitive. It is reviewed and updated regularly every six months. You can access the current list on the London Stock Exchange website.
The performance of the FTSE 100 index has been correlated with other major stock markets for more than a decade, including the American Dow Jones index, the Paris CAC 40 index, the German DAX index, etc. Despite this, the index is calculated on the basis of the arithmetic average of the prices of the first 100 stocks in the index.
A market capitalization weighting is applied to determine the index. The FTSE 100 is calculated continuously and available online. The price can be followed in real time, online and is updated every fifteen seconds.
It is impossible to predict what the next two years may hold, especially in the finance world as given the current context. What is more reassuring is that the global immunization campaign is on track, and activities are beginning to pick up pace in several countries. As the FTSE price is influenced by the crisis, the future is hard to predict. In any case, the index is stable and promises favourable development at the beginning of the second quarter of 2020.
When the FTSE was launched in 1984, the Footsie 100 index held over 80% of London's market capitalisation. The value of the shares was estimated at over one hundred and sixty billion pounds. The base index was set at 1000 points.
From January 1984 to December 2020, the price has evolved and followed an increasing trend. However, it has experienced dark and mediocre periods with saw-tooth movements.
Here are the key dates to remember on the evolution of the FTSE over its 36-year history:
In 2020, the health crisis impacted the index, which saw a slowdown in activity among its constituent companies. Currently, the price of the FTSE 100 index is rising to nearly 5940 points.
The UK's exit from the European Union after Brexit impacted the London Stock Exchange or LSE. The immediate effect was the transfer of European stocks listed in London to the Amsterdam Stock Exchange. This event marked the first quarter of the year 2021.
As an investor, it is important to be aware of events that can impact the FTSE price. Here are some of those factors:
Falls in the GBP exchange rate can impact the FTSE index value. Indeed, this pushes economic players to export British products because of the lower purchase price. In addition, companies listed on the FTSE do more than 75% of their business abroad.
When interest rates rise, the value of the FTSE falls. As a result, when debt repayments rise, there is a fall in profits and the value of the index falls.
The periodic publication of FTSE company results also impacts the value of the index. Company results (profits or losses) have a direct impact on the index price.
Any global event in the political, social and economic sphere can influence the indexes that make up the FTSE. The economic crisis, the financial crisis and the subprime crisis are all events that had an impact on the FTSE.
To invest in the FTSE 100 index, the use of a broker or stockbroker is a must. Stock brokers offer many types of services for any individual or institutional investor. To invest in the FTSE, it is important to choose a reliable broker.
The FTSE 100 Index is one of the best indexes with high investment potential. Currently, it is a popular and widely followed index for many novice and experienced traders.
The Footsie is able to maintain its performance and follow an upward trend. It has little financial risk. The index offers a less volatile stock market than in other types of investments, such as cryptocurrency.
At present, there are dozens of websites that offer this service. Indeed, it is possible to follow the price of each share and the FTSE index on most specialized sites. These include:
In addition, these sites offer other important information on the evolution of each share price, detailed financial information and stock market news.
The global economy is experiencing a significant slowdown due to the coronavirus pandemic. Traders are worried about the future of the stock markets. But the current context seems positive especially after the launch of the vaccination campaign. The goal is to fight the spread of the coronavirus (to protect humanity), but also to allow the world economy to rebound.
In the coming periods, observers expect to see the FTSE price rise above the 6,000 point mark. For now, the forecasts are reasonable and show a glimmer of hope for investors. But the emergence of the coronavirus variants can still change the game.
The FTSE 100 is London's main stock market index of the top 100 UK companies. Investing in this index could be a good opportunity despite the coronavirus crisis and the UK's exit from the European Union. The analysis of the context, of all the events that can influence the price of the index, of the financial information of each stock of the index, and of the stock exchange news will allow it to settle. To invest, it is important to trade via the best online broker or stock broker of the moment.
What exactly is the FTSE 100?
The FTSE 100, Financial Time Stock-Exchanges, Footsie 100 is the main British stock market index belonging to the FTSE Group. It is based in London on the London Stock Exchange. The FTSE 100 comprises the 100 largest British companies.
The FTSE offers several index categories:
There are several ways to invest in the FTSE index
To invest in the FTSE 100, individual and corporate investors can trade on an online trading platform or an online brokerage site.
The FTSE 100 is calculated as an arithmetic average of the top 100 market capitalisations in the index. In reality, the FTSE 100 comprises just over 100 companies, but the calculation is based on the 100 best performing companies in the index. The calculation is done continuously every day and updated every 15 seconds.
In 2020, the year of the health crisis, the index price was between 5000 and 6000 points. This year, an improvement and probably a big rebound are expected.
