The FTSE 100, short for the Financial Times Stock Exchange 100 Index, is a stock market index that tracks the 100 largest companies listed on the London Stock Exchange (LSE) by market capitalisation. It is one of the most widely followed benchmarks for measuring the performance of the UK equity market.
Often referred to as the “Footsie”, the FTSE 100 includes many of the UK’s best-known companies across sectors such as financial services, energy, healthcare, consumer goods, and mining.
In simple terms, the FTSE 100 provides a snapshot of how the largest UK-listed companies are performing and is commonly used as an indicator of market sentiment and economic confidence.
The FTSE 100 is a market capitalisation-weighted index, meaning that larger companies have a greater influence on the index’s performance than smaller constituents.
The value of the index changes throughout the trading day as share prices of the constituent companies rise and fall.
The index is reviewed quarterly, and companies may enter or leave the FTSE 100 depending on changes in their market capitalisation.
Before looking at individual companies, it is useful to understand that the FTSE 100 does not represent the entire UK stock market. Instead, it focuses on large-cap businesses that account for a significant portion of the London Stock Exchange’s total value.
The FTSE 100 contains some of the largest and most established businesses listed in the UK. Constituents change over time as company valuations rise or fall.
| Company | Sector |
|---|---|
| HSBC Holdings | Banking |
| BP | Energy |
| Shell | Energy |
| AstraZeneca | Healthcare |
| Tesco | Consumer Goods |
Because the index includes companies from multiple industries, it provides a broad representation of large-cap business activity within the UK market.
The FTSE 100 is widely used by investors, analysts, and financial institutions to assess the performance of the UK stock market.
Key reasons why the FTSE 100 matters:
It serves as a benchmark for UK equity performance.
It reflects investor sentiment toward major UK-listed companies.
It helps investors compare portfolio performance.
It provides insight into broader economic and business conditions.
Many investors view movements in the FTSE 100 as an indication of confidence in large publicly traded companies and the wider economy.
There are several ways investors can access the FTSE 100 without purchasing every individual company included in the index.
Common investment methods include:
Buying shares of individual FTSE 100 companies.
Investing in FTSE 100 index funds.
Purchasing FTSE 100 exchange-traded funds (ETFs).
Trading FTSE 100 derivatives such as CFDs.
These products allow investors to gain exposure to the performance of the index while using different trading or investment strategies.
The FTSE 100 remains one of the world’s most recognised stock market indices. By tracking the largest companies listed on the London Stock Exchange, it offers valuable insight into UK market performance and provides investors with a benchmark for analysing opportunities in large-cap equities.
In short: the FTSE 100 is an index that tracks the 100 largest companies on the London Stock Exchange by market capitalisation. It serves as a key benchmark for the UK stock market and is widely used to measure the performance of large-cap UK-listed companies.
Risk Warning: Trading CFDs involves significant risk and may not be suitable for all investors. Losses can exceed your initial deposit. Please ensure you fully understand the risks involved before trading.
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