Before proceeding further let’s give a quick word about the FTSE and FTSE 100.
What Is the FTSE group?
FTSE stands for Financial Stock Exchange Group which is also known as ‘Footsie’. FTSE is an independent organization made it is very familiar to the Standard and poor’s which specialized in making index offerings for the global financial markets.
An index will showcase a market segment it is a hypothetical portfolio of stock holdings. It is one of the most popular indexes in the FTSE 100. FTSE 100 is composed of the blue-chip stocks which are listed on the Landon Stock Exchange.
FTSE 100:
FTSE 100 is one of the most popular indexes which is maintained by the FTSE Group. FTSE 100 consists of the 100 most highly capitalized companies in the UK listed on the LSE. FTSE group manages other indices which are ranging from the FTSE All-Share to ethical indices that focus on corporate responsibility such as the FTSE4GOOD Global index.
Some recognizable companies trading on the FTSE 100 involve:
- BP plc (NYSE: BP)
- BHP Billiton plc (NYSE: BBL)
- Randgold Resources Ltd. (NASDAQ: GOLD)
- Rio Tinto plc (NYSE: RIO)
- GlaxoSmithKline plc (NYSE: GSK)
- A complete and updated list of indices and their prices can be found on the FTSE Group’s website.
How is it calculated?
The level of FTSE 100 is calculated with the help of the total market capitalization of the constituent companies which produce a single figure. We all know, share prices change throughout the day and the total market capitalization gets affected by the particular share prices of the companies. Whenever the FTSE 100 goes up or down then the chances are quoted against the previous days.
FTSE 100 as the FTSE Group
FTSE indices are followed by market analysts, traders, and investors. One of the most popular of the many indexes FTSE Russell is the FTSE 100. FTSE 100 is the most popular and widely accepted stock market index in Europe.
Examples:
The FTSE 100 is the largest 100 companies
The FTSE 100 consist of the largest 100 companies of the total market capitalization of the exchange and it is a market-cap-weighted index. FTSE 100 has individual stocks with higher market capitalization which showcases the correspondingly higher weight in the index. The FTSE group uses real-time calculations for the value and the index is updated every 15 seconds.
Readjustment of the index occurs every quarter time in the company which creates FTSE 100. Changes to the underlying index constituents and their weight comes from. its value of the companies which are taken at the close of the business.
The FTSE 100 is considered as the leading indicator of the prosperity for the United Kingdom companies and its economy.
Real-World Example
FTSE 100 is the market-cap-weighted index. For example, consider the impact of BP PLC on the index which ranks fourth in the market cap reported a powerful fourth-quarter earnings report. This allows to lift the stock price nearly about 1 percent but the FTSE 100 claimed up to 2 percent.
DAY RANGE 6,400.24 4,898.79
52 WEEK RANGE 7,689.67
DAY RANGE 6,263.60 - 6,400.24
52 WEEK RANGE 4,898.79 - 7,689.67
PERFORMANCE 5 Day -0.74% 1 Month 10.33% 3 Month 8.92% YTD -15.35% 1 Year -10.81%