FTSE 100

The FTSE 100 is Britain's 'blue-chip' stock index.But its makeup means it is more of a global index than a snapshot of UK plc.

The FTSE 100, often referred to as the "Footsie", is a stockmarket index that measures the performance of the shares of the 100 largest companies by market value listed on the London Stock Exchange. The FTSE 100 is often called the "blue chip" index as the companies are meant to represent the biggest and best of their kind the former adjective is true, the latter not necessarily so.

By the standards of other developed world stockmarkets, the FTSE 100 is unusually skewed towards the resources sector: oil and gas groups and miners collectively make up just over a fifth of the index. This helps to explain why it has trailed the performance of many of its major counterparts in recent years.

Note, too, that many of the UK's biggest companies are internationally focused (which is more typical for a big stockmarket index). Around 70% of the FTSE 100 companies' revenue is derived from abroad. That makes movements in the FTSE 100 a fairly weak indicator of how UK businesses and the economy are faring and also leaves it quite heavily exposed to currency fluctuations, particularly changes in the value of the US dollar.

A better measure of the health of UK-focused businesses is the FTSE 250, an index which lists the next-biggest 250 companies by market value, and which contains a smaller proportion of international companies.

The FTSE 100 was first created in 1983, when it had an index value of 1,000. It replaced the FT index. The index is calculated by FTSE Group, an independent company originally created by the London Stock Exchange and Pearson, then-owner of the Financial Times. The company calculates thousands of other indices a day, including the FTSE All Share, which is made up of the prices of every listed London share.

Recommended

The FTSE 100 has clawed back above 7,000 – how much higher can it go?
UK stockmarkets

The FTSE 100 has clawed back above 7,000 – how much higher can it go?

The FTSE 100 index has risen to over 7,000 for the first time in over a year – it now sits just above where it was in 1999. But its era of neglect cou…
19 Apr 2021
How the FTSE 100 could get propelled to 10,000
FTSE 100

How the FTSE 100 could get propelled to 10,000

It would have seemed crazy just months ago, but British blue-chip stocks are about to get a big boost that could take the FTSE 100 index to 10,000, sa…
21 Mar 2021
The FTSE 100 index is ready to rally
UK stockmarkets

The FTSE 100 index is ready to rally

The FTSE 100 index – made up of unfashionable “old economy” stocks – has lagged other major stockmarkets. But global reflation should see its weakness…
19 Feb 2021
UK stocks: how the FTSE 100 is finding its feet again
UK stockmarkets

UK stocks: how the FTSE 100 is finding its feet again

The FTSE 100, Britain’s blue-chip stockmarket index, has undergone constant churn in the 37 years since its inception, says Max King. But it is now …
12 Feb 2021

Most Popular

“Joke” cryptocurrency dogecoin goes to the moon. What’s going on?
Bitcoin

“Joke” cryptocurrency dogecoin goes to the moon. What’s going on?

Dogecoin – a cryptocurrency created as a joke – has risen by more than 9,000% this year alone. Saloni Sardana looks at how something that began as an …
19 Apr 2021
Lab-grown meat: how “moo’s law” will drive innovation
Soft commodities

Lab-grown meat: how “moo’s law” will drive innovation

Jim Mellon and Anthony Chow, co-founders of Aim-listed Agronomics, explain why they believe that “cellular agriculture” will benefit from massive long…
16 Apr 2021
The bitcoin bubble will burst: here’s how to play it
Bitcoin

The bitcoin bubble will burst: here’s how to play it

The cryptocurrency’s price has soared far beyond its fundamentals, says Matthew Partridge. Here, he looks at how to short bitcoin.
12 Apr 2021