FTSE 100

On an ordinary day over the last month of trading, FTSE has moved about 0.65%, making it a little calmer than most of the indices Kinzan tracks (their median is 0.75%).

At +0.2σ, the last 24 hours have been an entirely ordinary session for FTSE.

It sits in the lower half of its 24-hour range of 10,628.19–10,715.13, measured on hourly closes.

The New York block (13:00–22:00 UTC) did most of the work — roughly 89% of the movement over the last 24 hours.

Over the last 60 sessions of daily returns, it has moved most closely with SMI (+0.71, a strong relationship), and most inversely to HEATOIL (−0.45).

Market read: The FTSE is losing steam, with New York session selling dragging it down from earlier highs.

What it is

The FTSE 100, often called “the Footsie”, comprises the hundred largest eligible companies on the London Stock Exchange’s main market, weighted by free-float market capitalisation and reviewed every quarter. It was launched in 1984 with a base value of 1,000. Its make-up differs markedly from US benchmarks: oil and gas producers, miners, banks, insurers, pharmaceutical groups, tobacco and consumer-staples companies carry heavy weight, while technology is a small slice.

What drives it

Although it is London’s headline index, the FTSE 100 is only loosely a barometer of the British economy. Most of its constituents’ revenue is earned overseas, frequently in US dollars, which creates a distinctive relationship with sterling: a weaker pound raises the sterling value of those foreign earnings and has historically tended to support the index, while a strong pound can weigh on it. Commodity prices matter more than for most developed-market indices because energy and mining companies are large members, so crude oil and metals prices can drive the index as a whole. Global growth expectations, bank earnings and interest-rate moves feed in, as do Bank of England decisions through their effect on both domestic lenders and the pound. The index’s high dividend yield and value tilt mean it has often behaved differently from growth-heavy markets.

How it trades through the day

The cash market is open from 08:00 to 16:30 London time, which corresponds to the London block (07:00–13:00 UTC) and the first hours of the New York block (13:00–22:00 UTC). A closing auction follows the continuous session. Futures on the index trade on ICE for longer hours, and in the Asia block (22:00–07:00 UTC) the index’s likely direction is usually inferred from Asian markets and from futures. The afternoon is often steered by the Wall Street open.

What it tends to move with

The FTSE 100 has historically tended to move inversely to GBP/USD over short periods because of its overseas earnings. It shows positive sensitivity to Brent crude and copper through its energy and mining weight, and it usually moves in the same direction as the DAX 40 and S&P 500, though with lower exposure to technology.