FTSE 100 Index — United Kingdom large-cap stock market benchmark

Characteristics and calculation

The FTSE 100 is a market-capitalization weighted index with an adjustment for free float, meaning companies with a larger freely tradable equity base have a greater influence. The index exists in multiple variants: a price return version that reflects movements in share prices and a total return version that reinvests dividends. Values are computed continuously and disseminated in near-real-time; historically, many market feeds have published updates in regular short intervals to support traders and index funds.

Composition, eligibility and reviews

Constituent companies are selected from those listed on the London Stock Exchange and meeting standards for market capitalisation, liquidity and free float. The index is reviewed regularly (typically on a quarterly schedule) to promote or demote stocks based on changing market values, and corporate actions such as mergers or delistings can also trigger immediate changes.

Uses and practical importance

• Benchmark: The FTSE 100 serves as a principal barometer for the large-cap segment of the UK market and a reference point for investors.
• Investment products: Many exchange-traded funds, index funds, futures and options are built to track the FTSE 100, allowing broad exposure or hedging strategies.
• Market analysis: Economists and strategists use it to gauge investor sentiment and compare performance across regions, including comparisons to markets in London and the wider United Kingdom.

History and governance

The index replaced the earlier FT30 in the 1980s and has since been maintained by the specialist index provider often identified as FTSE Russell. It was created to provide a more representative and investable measure of the UK's largest companies and has become integral to both domestic and international investors interested in UK equities.

Notable facts and limitations

Although the FTSE 100 reflects large-cap market moves, it is concentrated in certain sectors (such as finance, energy and consumer goods) and includes many companies with significant international operations. As a result, its movements do not always map neatly to the domestic economy. For detailed index data and methodology explanations consult the FTSE 100 resources and official documentation provided by index administrators.

For further reading and data, use dedicated market portals and official pages that publish constituents, methodology, historical values and derivative contracts linked to the FTSE 100.