What is the UK100?
The Full name is Financial Times Stock Exchange 100 Index, also known as FTSE 100 index. It is not only the three major European stock market indexes with the GER40 index and the FRA40 index, but also a barometer of the UK economy.
UK100 was founded by FTSE Russell in March 1984 and replaced the FTSE 30 as the benchmark index for the UK stock market.
UK100 index consists of the top 100 listed companies with the largest market capitalization in the London Stock Exchange. It is including 9 major countries in Europe, mainly United Kingdom industry magnates include financial, insurance, industrial, energy, healthcare and etc. The total market capitalization accounts for about 81% of the overall market capitalization. That’s why it is generally regarded as a barometer of the British economy and the European economy.
Besides that, most of the financial products, ETFs and derivative options are linked to the UK100 index. Which makes the UK100 index the most important stock price in the world, same as the S&P500, Nasdaq100, Dow Jones index and other important stock indexes. Hence, it is one of the most important indices around the world.
But, most of the companies in the UK100 are multinational corporations around the world, the index is also vulnerable to fluctuations in the exchange rate of the pound. Hence, if investors want to reduce the impact of fluctuations in the exchange rate of the pound, there are other stock indexes that can be replaced.
Constituent stocks of UK100
The constituent stocks of UK100 include most United Kingdom companies, which is about 100 British and Europe companies. UK100 uses market capitalization weighting method as the calculation basis. Hence, the companies with the highest market capitalization would receive the most attention. This means that it is not only determined by the supply or volume of shares traded, but also by the aggregate value of all publicly traded shares.
Among the UK100 index, the financial industry accounts for the largest proportion, followed by consumer necessities, energy, raw materials, health care, etc. On the contrary, the proportion of information technology is quite low.
The Financial Times and the London Stock Exchange cooperate to select the top 100 companies listed on the London Stock Exchange with the total market capitalization for inclusion in the constituent stocks. Besides that, the daily trading volume will also be considered to ensure the liquidity of the constituent stocks.
The FTSE Group, the compiling company for the UK100, reviews the constituent stocks on a quarterly basis. In general, the company’s market capitalization have to be ranked in the top 90, so that it could be listed into the constituent stocks. On the contrary, if the company’s market value is out of the market value ranking of 111, it will be eliminated.
Although UK100 is the most popular index in the UK, most of its constituent stocks are mainly engaged in global rather than the UK domestic market. Therefore, it is considered that it does not response the economic situation of the UK very well. An index that better responses the performance of the UK economy is the FTSE250, which includes fewer international companies.
How to trade UK100 on HXFX?
1. First, click here to register an HXFX account for free.
2. Next, download the APP and log in to complete the real-name authentication.
3. Contact customer service to receive your exclusive free trial bonus.
4. Click “Quote”, select “UK100” and click “Trade”. Then you can click “Sell” or “Buy” to start your trading according to the trends.
5 advantages of foreign exchange trading
1. Leverage system
Investing a small amount of money will bring greater benefits, but may also bring greater risk of loss.
2. Low transaction costs
There are basically no handling fees, government taxes, etc.
3. Two-way transaction
Whether you are buying first and then selling in a bullish trend, or selling first and then buying in a bearish trend, you can get profit.
4. 24 hours trading
It is available in 24 Hours, investors can trade according to their own time.
5. High liquidity
In the foreign exchange market, investors could exchange foreign currency at any time, even complete their transactions in a short time.
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Disclaimer: Information above can only be use for references and doesn’t represent our platform’s opinions.
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