How to trade the FTSE
Author: Getdealing
The FTSE 100 is an Index made up of the 100 largest U.K companies by market capitalization listed on the London Stock Exchange. Market capitalization measures the size of the company and is calculated by multiplying the number of shares in issue by the share price. The FTSE was first calculated in 1984 with a base value of 1000 and now represents about 81% of the value of all stocks listed on the London Stock Exchange making it an accurate barometer of U.K business prosperity. The current stocks and weightings in the FTSE are as follows. Stock % Weight in Index 1 BP PLC 8.37 2 HSBC Holdings PLC 8.27 3 Vodafone Group PLC 5.75 4 GlaxoSmithKline PLC 5.42 5 Royal Dutch Shell PLC 5.05 6 Royal Dutch Shell PLC 3.92 7 AstraZeneca PLC 3.65 8 BG Group PLC 3.17 9 British American Tobacco PLC 3.17 10 Rio Tinto PLC 2.87 11 BHP Billiton PLC 2.74 12 Tesco PLC 2.63 13 Barclays PLC 2.34 14 Standard Chartered PLC 2.09 15 Anglo American PLC 2.06 16 Diageo PLC 2.04 17 Reckitt Benckiser Group PLC 1.82 18 Unilever PLC 1.77 19 Imperial Tobacco Group PLC 1.52 20 SABMiller PLC 1.37 21 Xstrata PLC 1.30 22 National Grid PLC 1.23 23 BAE Systems PLC 1.11 24 Centrica PLC 1.09 25 Scottish & Southern Energy PLC 0.97 26 Lloyds Banking Group PLC 0.95 27 Prudential PLC 0.95 28 Aviva PLC 0.84 29 BT Group PLC 0.73 30 Cadbury PLC 0.67 31 Tullow Oil PLC 0.65 32 WM Morrison Supermarkets PLC 0.60 33 Compass Group PLC 0.59 34 Rolls-Royce Group PLC 0.58 35 Royal Bank of Scotland Group PLC 0.57 36 British Sky Broadcasting Group PLC 0.55 37 J Sainsbury PLC 0.52 38 Reed Elsevier PLC 0.47 39 WPP PLC 0.47 40 Pearson PLC 0.46 41 Man Group PLC 0.45 42 Experian PLC 0.44 43 Marks & Spencer Group PLC 0.43 44 Shire PLC 0.43 45 Capita Group PLC/The 0.42 46 RSA Insurance Group PLC 0.38 47 Kingfisher PLC 0.38 48 Smith & Nephew PLC 0.37 49 Standard Life PLC 0.36 50 Old Mutual PLC 0.36 51 Land Securities Group PLC 0.33 52 International Power PLC 0.32 53 United Utilities Group PLC 0.32 54 Legal & General Group PLC 0.32 55 Carnival PLC 0.32 56 Autonomy Corp PLC 0.31 57 Cable & Wireless PLC 0.31 58 British Land Co PLC 0.31 59 Thomson Reuters PLC 0.29 60 Cairn Energy Plc 0.28 61 Associated British Foods PLC 0.27 62 Randgold Resources Ltd 0.27 63 Wolseley PLC 0.27 64 G4S PLC 0.27 65 Next PLC 0.26 66 Severn Trent PLC 0.24 67 Smiths Group PLC 0.24 68 Inmarsat PLC 0.22 69 Johnson Matthey PLC 0.22 70 Sage Group PLC/The 0.22 71 Eurasian Natural Resources Corp 0.22 72 3i Group PLC 0.21 73 Antofagasta PLC 0.21 74 Liberty International PLC 0.20 75 Home Retail Group PLC 0.20 76 Hammerson PLC 0.20 77 Lonmin Plc 0.20 78 ICAP PLC 0.19 79 AMEC PLC 0.19 80 Serco Group PLC 0.18 81 Cobham PLC 0.18 82 Alliance Trust PLC/The 0.17 83 Rexam PLC 0.17 84 Vedanta Resources PLC 0.17 85 Invensys PLC 0.16 86 Intercontinental Hotels Group PLC 0.16 87 Admiral Group PLC 0.16 88 Pennon Group PLC 0.16 89 Friends Provident Group PLC 0.15 90 Bunzl PLC 0.15 91 Intertek Group PLC 0.15 92 Foreign & Colonial Investment Trust PLC 0.14 93 Petrofac Ltd 0.14 94 British Airways PLC 0.13 95 Schroders PLC 0.13 96 Balfour Beatty PLC 0.13 97 London Stock Exchange Group PLC 0.13 98 TUI Travel PLC 0.12 99 Kazakhmys PLC 0.12 100 Fresnillo PLC 0.11 101 Thomas Cook Group PLC 0.08 102 Schroders PLC 0.04 N.B -- There are 102 stocks in the FTSE 100 as there are 2 classes of shares for RoyalDutch and Schroders. What makes it move? Company Earnings. Traders monitor the earning of companies in the FTSE which are normally released on a quarterly basis. There will be a consensus among analysts as to what that number will be and if the actual number is better than the analysts expected then the price should rise and if it is worse then the price should fall. The earnings for companies that make up a bigger percentage of the FTSE (i.e. the top 10 by market capitalisation) will have a bigger effect on the movement of the FTSE and should be watched closely. NEWS All day long traders are glued to their news screens watching for stories that may impact the economy and the markets. The news that will move the FTSE can vary from company specific news to global news stories and traders are looking for any news that will cause investors to enter or exit the market. It is essential to have access to live news as often financial markets will have already moved by the time most people read the story in the paper. Through Getdealings twitter market commentary we bring you the live news stories and rumours the professionals are discussing right now. Interest Rates. FTSE traders will keep their eyes open for any potential change in Interest rates as this will have an effect on stock market valuations. The general rule is that lower interest rates are good news for the FTSE as not only do the companies in the FTSE have lower debt payments( making them potentially more profitable) the returns the FTSE could offer look more attractive compared to the lower interest rate you will get from bondsAbout the Author:
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