Why does the ftse work

Next article. The latest quarterly review of the FTSE revealed common misunderstandings about how the index is drawn up. Read the latest news Find all the latest industry news, all written by our in-house industry experts.

Economic commentary: What is tapering and how could it impact financial markets? Read now. The Footsie is an index that tracks the largest public companies by market capitalization that trade on the London Stock Exchange LSE. The level of the FTSE is calculated using the total market capitalization of the constituent companies and the index value.

It is calculated continuously on every trading day from AM at the market opening until the p. LSE close. The FTSE hitting a new high means the total worth of all the indexed companies increasing.

The FTSE was launched in Because many of the listed companies are foreign-based or do most business overseas, the value of the pound is a factor as well. A weaker pound means a dollar-based company would be worth more in pounds, and a rising pound means companies doing business in Europe would earn less in the U.

FTSE Russell. London Stock Exchange Group. Accessed Jan. Stock Markets. Your Privacy Rights. Alex Watkins , Investment Analyst. What is the FTSE? Why does it matter to investors? Existing client? Please log in to your account to automatically fill in the details below. Title: Please select First name:. Last name:. Email address:.

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London Stock Exchange. Accessed Jan. Compare Accounts. The offers that appear in this table are from partnerships from which Investopedia receives compensation.

This compensation may impact how and where listings appear. Investopedia does not include all offers available in the marketplace. The Russell index measures the performance of the 2, smaller stocks that are listed in the Russell Index.

The acronym PLC for public limited company indicates that shares in the firm are publicly traded. It is the British equivalent of the U. The LSE provides access to electronic trading for thousands of stocks. Discover more about the BSE here. Partner Links. Related Articles. Russell What's the Difference? Investopedia is part of the Dotdash publishing family.