What moves the FTSE 100?
When you are buying the FTSE100 you are actually buying or selling fractions of 102 different shares (if you watch the index in real-time you will see that it updates every 15 seconds). Also, as the index is cap-weighted bigger companies listed on the FTSE dominate the index. Because the futures market is so heavily traded, it can sometimes happen that economic news will be priced into the futures contract before it is reflected in the index. Suppose, for example, that the minutes of the Bank of England’s monetary policy committee show a surprisingly thin majority in favour of keeping base rates on hold. Higher or lower-than-expected interest rates will affect lots of sectors within the FTSE 100, as well as altering demand for equities as an asset class. Note also that not all of a company’s shares are included in the FTSE. Shares that are held by an insider such as in the case of a company founder for instance, which shares are unlikely to be sold, or in the case of shares held by the
