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Financial Times Stock Exchange 100 Index (FTSE 100)

Financial Times Stock Exchange 100 Index (FTSE 100)
The FTSE 100, also known as the Financial Times Stock Exchange 100 Index, is a market capitalization-weighted index of the 100 largest publicly traded companies listed on the London Stock Exchange (LSE). It is one of the most widely recognized and followed stock market indices in the United Kingdom and serves as a barometer of the performance of the UK stock market.

Here are some key points about the FTSE 100:

  • Constituent Companies: The FTSE 100 index comprises the 100 largest companies listed on the LSE based on their market capitalization. The index constituents are reviewed every quarter, and companies can be added or removed based on their market capitalization rankings.

  • Market Capitalization Weighting: The FTSE 100 is a market capitalization-weighted index, which means that the weight of each constituent company in the index is determined by its market value. Companies with higher market capitalization have a greater influence on the index's movements.

  • Diversified Sectors: The FTSE 100 includes companies from various sectors, including finance, energy, consumer goods, healthcare, telecommunications, and more. This diversification across industries helps in providing a representation of the overall UK economy.

  • Global Reach: While the index is based in the UK, many of the companies listed on the FTSE 100 have significant international operations. As a result, the index's performance can be influenced by both domestic and global factors.

  • Index Calculation: The FTSE 100 index is calculated in real-time using the prices of the constituent stocks. It uses a base level of 1000, which was established in January 1984.

  • Benchmark and Investment Tool: The FTSE 100 serves as a benchmark for measuring the performance of UK equities and is often used by investors and fund managers to evaluate their portfolio performance against the broader market. Additionally, there are investment products, such as exchange-traded funds (ETFs), that track the performance of the FTSE 100.

It's important to note that the FTSE 100 is just one of several indices maintained by FTSE Russell, a subsidiary of the London Stock Exchange Group. Other notable indices include the FTSE 250 (mid-cap companies) and the FTSE All-Share (comprising the FTSE 100, FTSE 250, and additional companies).

Please keep in mind that the composition and performance of the FTSE 100 may change over time as companies are added or removed and market conditions fluctuate.