The UK100 – or Financial Times Stock Exchange (FTSE) 100 – is one of the most popular stock market indices in the world for traders. The liquidity and volatility of the UK100 index allows it to present traders with dynamic opportunities for speculating on the UK100 price with contracts for difference (CFDs), without owning any underlying assets.
What is the UK100 index?
The UK100 index is a capitalisation-weighted share index that comprises 100 companies listed on the London Stock Exchange with the largest full market value. Founded in 1984, the UK100 index has since superseded the FT30 index as the foremost benchmark of UK equity.
For traders, the UK100 index can provide an insight into the health of the wider UK economy – representing around 80% of the value of the UK market on the London Stock Exchange. There is also an intricate relationship between the UK100/GBP for prospective traders to be aware of.
How does the UK100 index work?
Trading on the UK100 index is open on week days between 8am until closing values are issued at 4.30pm. During these hours, the index is calculated in real time and updated every second – making it an extremely liquid market index in which traders can long or short their position(s).
With many of the listed companies earning from overseas business/operations, the UK100/GBP relationship is often inverted. If GBP sterling weakens on the currency markets, the UK100 can often strengthen due to the increased profitability of revenues earned overseas e.g. in USD.
What drives the UK100 price?
Factors that can impact and drive the UK100 price are varied, and can include:
− The weightings of individual companies listed on the UK100 index
− UK economic performance, as well as other closely aligned economies e.g. eurozone
− UK government fiscal policy
− Bank of England interest rates and inflation reports
The real-time UK100 chart on this page can provide prospective and current traders with the ability to spot existing trends in this fluid stock market – and opportunities for strengthening their position. Updated to reflect the most current UK100 conditions, this chart should not be used as a guarantee for future performance – but is available to traders around the world.
UK 100: Q4 2021 Outlook
The UK 100 or the FTSE 100 remained highly volatile through the third quarter. In mid-July the index sank on concerns around rising covid-19 cases derailing the economic recovery. However, investor fears proved short-lived, and the UK 100 staged a steep climb from mid-July to mid-August, breaching the 7,200 resistance level on August 11. September proved rough, and the blue-chip index was dragged down to near 6.900, weighed by rising inflation fears. The FTSE 100 showed its resilience once again and remained above the 7,000 resistance level for the back half of September. Analysts on average believe the UK 100 is looking to breach the 7,200 level again soon and seems on course to reaching 7,300 by yearend.
Economic Data to Watch Out for in Q4 2021
October 11, 2021/ November 11, 2021/ December 10 & 22, 2021: UK GDP Growth Rate
The growth in the UK slowed down in July, with the gross domestic product expanding by 7.5% year-over-year in July following a 15.2% growth recorded in the prior month. Analysts expect a further slowdown in growth rate, with GDP likely to grow 5.9% annually in August.
October 12, 2021/ November 16, 2021/ December 14, 2021: UK Unemployment Rate
The UK unemployment rate dropped to 4.6% in the three months to July, notching the lowest level since the quarter ending August 2020, showing signs of a rebound in the labor market. However, the jobless rate still remained 0.6% points higher than the pre-pandemic level. Analysts expect unemployment rate to remain unchanged for August.
October 1 &22, 2021/ November 1 &23, 2021/ December 1 & 16, 2021: UK Manufacturing PMI
The IHS Markit/CIPS manufacturing PMI fell to 56.3 in September, compared to 60.3 in the previous month, according to preliminary estimates. It was the slowest growth in the country’s factory activity since February driven by material shortages. The final reading for September is expected to confirm the decline in manufacturing index, while remaining in expansion zone.
November 4, 2021/ December 16, 2021: Bank of England Interest Rate Decision
The Bank of England held its benchmark interest rate at a record low level of 0.1% during its September meeting, also leaving its bond-buying program unchanged. Analysts expect the country’s central bank to keep rates unchanged during its upcoming meeting.
October 20, 2021/ November 17, 2021/ December 15, 2021: UK Inflation Rate
Rising inflation has remained one of the major concerns for investors recently as the annual inflation rate in the UK climbed to 3.2% in August, recording the highest rate since March 2012, in comparison to the 2% rate recorded in July. For September, analysts are expecting the annual rate to remain unchanged.
October 11, 2021/ November 11, 2021/ December 10, 2021: UK Industrial Production
UK’s industrial production rose 1.2% on a monthly basis in July recovering from a 0.7% decline in June and also well above analysts’ estimates of a 0.4% growth. However, analysts expect some slowdown in growth rate, with industrial output likely to increase 0.8% in August.
Q4 2021 Predictions: Other Events That Could Impact the UK 100
M&A (merger and acquisition) activity could keep the UK 100 buoyant through the final quarter of the year. So far, the British economy has been bolstered by the reopening of only a few sectors. A more broad-based reopening in the fourth quarter could propel the economy and UK equities.