What makes the ftse go up

How to buy shares — a beginners guide. What is market cap? A simple guide for beginners. Diversifying your portfolio — stock market investors. Two ways stock market beginners waste money. The FTSE index — a beginners guide. What is a shareholder? Definition and rights in a public company. Close this module. We have a free gift for you First Name John.

Your email johnsmith example. The answer lies in these two words: overseas earnings. Overseas earnings. What this means is that as our currency weakens, the dollar strengthens and the value of those overseas earnings rises when converted back into sterling. That in turn boosts share prices and by extension the FTSE index as a whole.

You can see this on the right hand side of the below image;. Reasons to be careful. Also, although the FTSE may rise when the currency falls, a drop in sterling suggests that the overall outlook is deteriorating, something to which share prices cannot usually stay immune forever Overall then, it is important to know what you are getting when you choose to either follow a particular index, such as the FTSE , or use it as a benchmark for a portfolio.

Sign up to our newsletter. First Name. Last Name. We will not share your details with anyone else and we will not bombard your inbox. You can find out more about how we use your data in our Privacy Policy. Please remember that we are an investment company and as is the very nature of investing, there are inherent risks. The value of your investments can both rise and fall over time and you cannot assume that past performance will repeat itself. You must be comfortable in the knowledge that you may receive less than you originally invested.

All rights reserved. Registered in England and Wales No. A list of partners is available to view here. By submitting your details, you are signing up to our newsletter and are agreeing to our Privacy Policy. Select basic ads. Create a personalised ads profile. Select personalised ads. Apply market research to generate audience insights. Measure content performance. Develop and improve products. List of Partners vendors.

An index is comprised of a hypothetical portfolio of stock holdings, so it can act as a representation of the performance of a particular market segment—also called a benchmark. Although the FTSE offers many indexes, its two most well-known indexes are the FTSE , which is comprised of the most highly capitalized blue-chip stocks listed on the London Stock Exchange, and the Russell Index, a small-cap stock market index of the smallest 2, stocks in the Russell Index.

The FTSE's indexes are available across asset classes, styles, and strategies and are designed to meet the needs of a wide variety of clients, including buy-side, sell-side, custodians, asset owners, exchanges, investment consultants, and exchange traded fund ETF providers. At its creation, in January , the index had a base level of 1, It has since reached highs of over 7, The level of the FTSE is calculated using the total market capitalization of the constituent companies and the index value.

Total market capitalization changes alongside individual share prices of the indexed companies throughout the trading day, so the index value also changes.

It is calculated continuously on every trading day—from a. LSE close. When the FTSE hits a new high, it means the total worth of all the indexed companies has increased. Readjustment of the index constituents the companies that make up the FTSE happens every quarter, usually the Wednesday following the first Friday in March, June, September, and December. Any changes to the underlying index constituents and their weighting comes from the values of the companies taken at the close of business the night before the review.

As such, it typically draws investors looking for exposure to big U. While several of its listings do include companies with homes outside of the U.