What is the FTSE 100 index?
- The UK 100 is a derivative product based on the FTSE 100 index
- The FTSE 100 is a stock market index representing the 100 largest publicly-traded companies listed on the London Stock Exchange (LSE)
- It is pronounced ‘Foot-sie 100’
- It is market capitalisation-weighted, meaning that companies with higher market capitalisations have a greater impact on the overall index value
- The FTSE 100 index tracks the performance of the 100 top blue-chip companies in the UK
- It is often used as a gauge of the health of the UK’s economy
What is the history of the FTSE 100 index?
- The UK 100, better known as the FTSE 100 index, was created by the Financial Times and the London Stock Exchange to track the performance of the UK’s 100 largest companies by market capitalisation
- It was launched in January 1984 with a base value of 1,000, but it now sits around 8,500 (current as of January 2025)
- During the 1990s it experienced steady growth, reflecting the strong performance of the UK economy
- The FTSE 100 was impacted by the dot-com bubble and the global financial crisis in 2007-2008, but it steadily recovered and continued to climb
- In 2020 the FTSE 100 was seriously impacted by the COVID-19 pandemic, but it has since recovered and reached record highs
- It continues to be the leading benchmark for the UK stock market
What are some of the largest stocks that make up the FTSE 100 index?
(This list is current as of January 2025)
- AstraZeneca
- Shell
- Unilever
- BP
- HSBC Holdings
- GlaxoSmithKline
- RELX
- British American Tobacco
- Rio Tinto
- National Grid
- Glencore
- Diageo
- Rolls-Royce
- BAE Systems
- Lloyds Banking Group
What factors influence the price of the FTSE 100 index?
UK economic data
- Inflation: Rising inflation can erode corporate profits and consumer spending, leading to a decline in the FTSE 100 index. Conversely, lower inflation can boost economic growth and corporate earnings, supporting the index
- Gross Domestic Product (GDP): A strong UK economy, measured by GDP growth, can bolster investor confidence and drive up the FTSE 100 index. Conversely, a weak economy can dampen demand for goods and services, leading to lower stock prices
- Employment: Low unemployment rates indicate a strong economy and can support consumer spending and corporate profits. Conversely, high unemployment can weaken economic growth and put downward pressure on the FTSE 100 index
Global commodity prices
- Oil and gas: The UK economy is heavily reliant on oil and gas exports. Fluctuations in global commodity prices can significantly impact the FTSE 100, particularly the energy companies
- Other commodities: Changes in the prices of other commodities, such as metals and agricultural products, can also affect the FTSE 100 index, particularly for companies involved in these sectors
Changes in the British pound’s value
- Currency appreciation: A stronger British pound can make UK exports less competitive in global markets, potentially hurting the profits of UK companies
- Currency depreciation: A weaker British pound can make UK exports more competitive, boosting corporate earnings
Geopolitical risks and Brexit-related developments
- Global conflicts: Geopolitical tensions and conflicts create uncertainty and volatility in financial markets
- Brexit and EU relations: Negotiations related to the UK’s relationship with the European Union following Brexit introduces uncertainty
- Trade agreements: The outcome of trade negotiations between the UK and other countries influences the competitiveness of UK businesses
Interest rate changes
- Bank of England (BoE) policy: The BoE’s monetary policy decisions, including interest rate changes, can significantly impact the FTSE 100
- Higher interest rates: Higher interest rates can increase borrowing costs for businesses, reduce corporate profits, and dampen investor sentiment
- Lower interest rates: Lower interest rates can stimulate economic growth, boost corporate earnings and making borrowing cheaper for businesses
What are the benefits of trading the FTSE 100 index using CFDs?
- Leverage: CFDs allow traders to control larger positions with a smaller initial investment, potentially magnifying both profits and losses
- Flexibility: CFDs enable traders to go long or short, profiting from both rising and falling markets
- Cost-efficiency: CFDs often have lower transaction costs compared to traditional stock market transactions
- 24-hour trading: Many brokers such as MarketMates offer 24-hour trading on FTSE 100 CFDs, enabling traders to capitalise on market movements outside of regular stock market trading hours
- Diversification: Trading the FTSE 100 provides exposure to a diversified basket of UK companies, potentially reducing risk
- Access to a major UK index: The FTSE 100 index is a prominent benchmark for the UK stock market, providing opportunities to participate in the growth of the UK economy
24-hour market
Unlike other financial markets, the forex market operates 24-hours a day, five days a week, allowing you to trade at any time that suits you, regardless of your location
Trade long or short
With forex trading,you have the flexibility to profit in both rising (long) and falling (short) markets, giving you more opportunities to make profitable trades
Diverse trading opportunities
With a wide range of currency pairs to choose from, you’ll be able to find trading opportunities in most economic conditions and market types
Access to leverage
Let your trading benefit from high leverage opportunities, allowing you to control a larger position with a smaller capital investment, potentially increasing your profits
Trade long or short
Trading the FTSE 100 using CFDs allows you to trade both long and short in both rising and falling markets, offering flexibility in various market conditions
Margin trading
Like other index CFDs, the FTSE 100 can be traded using margin, allowing traders to deposit only a fraction of the full value of the trade
Broad market exposure
Trading indices such as the FTSE 100 allows you to gain exposure to an entire market, rather than concentrating on an individual stock
Hedging opportunities
CFDs such as the FTSE 100 index can be used to hedge existing positions in other related assets
Frequently asked questions
What are the trading hours for the FTSE 100 index?
The London Stock Exchange (LSE) operates during the following hours in UTC (Coordinated Universal Time):
- Pre-market (opening auction): 7.00am to 8.00am UTC
- Regular trading hours: 8.00am to 4.30pm UTC (Monday to Friday)
- Post-market (closing auction): 4.30pm to 5.00pm UTC
Key notes for traders
- The LSE is closed on weekends and UK public holidays
- During British Summer Time (BST), which typically runs from late March to late October, trading hours are shifted one hour earlier in UTC
- Check with your broker for any platform-specific variations in trading availability
What are the risks of trading the FTSE 100 index?
1. Market volatility: The ASX200 can experience significant price fluctuations due to economic data, geopolitical events, or company-specific news. High volatility increases the potential for both gains and losses, making it essential to have a solid risk management strategy
2. Economic dependence on China: Australia’s economy is closely tied to China’s due to strong trade relationships, particularly in commodities. A slowdown in China’s economy or changes in its trade policies can have a significant impact on the ASX200
3. Exposure to specific sectors: The ASX200 is heavily weighted towards financials and materials (e.g., mining and resources.) This lack of sector diversification can amplify risks during sector-specific downturns, such as a banking crisis or a commodity price collapse
4. Liquidity risk: While the ASX200 is highly liquid compared to smaller indices or individual stocks, certain times of day or market conditions (e.g., during economic announcements) can lead to reduced liquidity, causing wider spreads and slippage
What is the difference between trading indices and trading share CFDs?
- Diversification: Indices give exposure to a group of stocks, while individual stock CFD trading focuses on one company
- Volatility: Individual stocks can be more volatile due to company-specific events, whereas indices reflect broader market trends
- Risk: Indices spread the risk across many stocks, while individual CFD stock trading concentrates the risk on one company
- Price movement: Indices tend to move more steadily, while individual stock CFD prices can be more unpredictable and volatile
Why MarketMates?
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FTSE 100 Index Chart
A powerful chart for you to use with all the customisable options you’d expect from TradingView.
Change the ticker, the time view, the type of chart you wish to view, and then add your favourite indicators.
Indices Market Data
This market data list provides a broad overview of indices market performance, including value, change per cent, open, high, low and previous price.
Indices Market News
Keep track of what’s happening in the financial markets with this daily news summary, filtered to bring you the most important news as it happens.
Use the slider on the right-hand side to reveal more news items.
UK Economic Calendar
Never miss vital upcoming economic events with this customisable economic events calendar. See all the events and announcements you need to know, with the ability to set up filters for:
- Event importance
- Country or region
