The ‘Footsie’ or Financial Times Stock Exchange, is a market capitalization index. It’s not linked to a stock exchange, but does have the London Stock Exchange as a co-owner, with the Financial Times being the other owner. Surprisingly, it’s only one of many indexes by FTSE but by far the best known of the bunch. It’s a great way to track blue-chip stocks on the London Stock Exchange.
FTSE 100 Overview
The FTSE 100 is one of most actively traded indices worldwide as it tracks the performance of the most valuable 100 companies listed on the London Stock Exchange as well as other exchanges across the world.
As such, traders and speculators tend to keep a close eye on the FTSE 100 in order to gain insights into the health of the British economy. However, it’s worth noting that since the index tracks companies outside of the UK as well, it’s not the most accurate benchmark and should be utilized as confirmation of entry signals along with other indicators.
What drives price fluctuations in FTSE 100?
As already mentioned, the companies included in this index are mostly based in the UK, but may have revenue streams outside the UK as well. Therefore, any political and economic developments that may affect the GBP, the EUR and the USD will likely trigger market volatility.
Important economic indicators on the calendar to watch on the economic calendar are interest rate decisions by the Central banks, manufacturing PMIs, inflation and GDP figures.
Also, commodity markets such as oil and gas and their value on the global stage can indirectly influence the revenue of energy stocks tracked by the FTSE 100 and these are keenly watched by speculators when trading FTSE 100 CFDs.
Did you know…?
The current companies that compose the index include big names such as Royal Dutch Shell, HSBC Holdings, BP, GlaxoSmithKline, AstraZeneca, Barclays and Vodafone.