UK100 – Trade the UK100
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 Founded in 1984, the UK100 index has since superseded the FT30 index as the foremost benchmark of UK equity.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.
Q1 2020 Outlook
Britain’s blue-chip index, the UK 100 or FTSE 100, has been having a rough time lately. An upbeat Pound Sterling, driven by a strong report from the Confederation of British Industry (CBI), caused the index to lose 39 points on January 22. Revived optimism in the UK business sentiment was good for the Pound Sterling, but bad for the Footsie, which has huge exposure to the overseas markets.
Further, heightened fears of a global epidemic of the China-born Coronavirus led to the index shedding 64 points to trade at 7,507 on January 23, 2020. The number of people infected by the virus has gone up to 600 in China, with the US and Singapore registering new cases too. While the death toll in China is increasing, a few people in Scotland are being tested too, which could bring the virus very close to British shores.
Economic Data to Look Out For: February and March 2020 Outlook
February 5, 2020: US Balance of Trade December 2019
Trade deficit in the United States narrowed to $43.1 billion in November 2019, almost matching market expectations of $43.8 billion. The trade gap for the US has shrunk for the third consecutive month. It is estimated at a deficit of $50 billion for the last quarter of 2019. Any strengthening in US Dollar against the Pound could cause the FTSE 100 to surge.
February 11, 2020: UK Balance of Trade December 2019
March 11, 2020: UK Balance of Trade January 2020
Britain registered a trade surplus of £4.03 billion in November 2019, with exports in fuels and non-monetary gold rising to an all-time high of 1.1%. The UK is set to leave the EU single market on January 31, 2020, and what terms it gets in the deal and what kinds of free trade agreements (FTAs) it can create with other countries will be crucial for the British Pound. Forecasts stand at £6.6 billion in trade deficit at the end of Q4 2019. This could narrow to £5.7 billion in January 2020.
February 13, 2020: US Inflation Rate YoY January 2020
The US consumer price inflation rate rose 2.3% YoY in December 2019, in line with market expectations. The US Federal Reserve has hinted at stable interest rates for some time in 2020. This report will be key to its policy decisions for the months ahead.
February 19, 2020: UK Inflation Rate YoY January 2020
March 25, 2020: UK inflation Rate YoY February 2020
UK inflation slipped to a 3-year low in December 2019, at 1.3%. Considering that the Bank of England’s target inflation rate is 2%, it could lead to a rate cut decision in January 2020. The markets don’t expect much improvement in the inflation rate in January 2020 either. Forecasts are at 1.3%. By the end of Q1 2020, inflation could rise to 1.5%. A falling Pound could be good for blue-chip stocks.
March 18, 2020: US Federal Reserve Interest Rate Decision
US interest rate policy will depend on inflation and unemployment reports being released earlier in the month. However, the market consensus is that the central bank will leave the target range untouched at 1.5%-1.75%.
March 26, 2020: Bank of England Interest Rate Decision
Policymakers are likely to take a wait-and-watch approach regarding how Brexit pans out and how the economy reacts to the fallout. Expectations of a rate cut from the current 0.75% are high. This could lead to a falling Pound Sterling and a soaring FTSE.
March 31, 2020: UK GDP Growth YoY Q4 2019 Final
GDP growth at 1.1% was the weakest in seven years, in the Q3 2019. The markets expect similar growth for Q4 2019, on account of low consumer spending and manufacturing growth before the elections.
Q1 2020 Predictions: Political Events That Could Impact the FTSE 100
The repercussions of Brexit will definitely be something to look out for. How the trade deal negotiations affect the value of the Pound Sterling will also need to be tracked. The Presidential impeachment trial in the US Senate could cause some market volatility.