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FTSE 100 breaks 7000 explained - what does the new record mean? FTSE 100 breaks 7000 explained - what does the new record mean?
(3 days later)
The FTSE 100 hit a new record today, breaking the 7000 mark that many had come to see as a psychological barrier for lack of growth since the turn of the millennium.The FTSE 100 hit a new record today, breaking the 7000 mark that many had come to see as a psychological barrier for lack of growth since the turn of the millennium.
It took the FTSE just 7 months to break through 5k & get to 6k. It’s taken 204 months from there to 7k. #uselessfact #FTSEIt took the FTSE just 7 months to break through 5k & get to 6k. It’s taken 204 months from there to 7k. #uselessfact #FTSE
Market commentators took to Twitter to share the news, which may signal the start of a more prosperous period for UK stocks.Market commentators took to Twitter to share the news, which may signal the start of a more prosperous period for UK stocks.
Maybe the FTSE really can hit 10,000 by 2022 at the pace it's going now! http://t.co/TL26EPsJWFMaybe the FTSE really can hit 10,000 by 2022 at the pace it's going now! http://t.co/TL26EPsJWF
FTSE 100 hits 7000 pts! Momentous day!FTSE 100 hits 7000 pts! Momentous day!
An eclipse and the FTSE breaching 7,000 on the same day! I feel a bit light headed.An eclipse and the FTSE breaching 7,000 on the same day! I feel a bit light headed.
Not sure why? Here’s what it all means.Not sure why? Here’s what it all means.
  
The FTSE 100 is an index of the 100 UK stocks with the highest market capitalisation – or value of all the stocks added together – also known as blue chip stocks. At the moment that includes companies like Lloyds bank, Marks and Spencer, Royal Mail and Vodafone, but the constituents change like the football teams in the Premier League. Its name comes from joining together the initials of the Financial Times and London Stock Exchange, which used to own 50 per cent of the index each.The FTSE 100 is an index of the 100 UK stocks with the highest market capitalisation – or value of all the stocks added together – also known as blue chip stocks. At the moment that includes companies like Lloyds bank, Marks and Spencer, Royal Mail and Vodafone, but the constituents change like the football teams in the Premier League. Its name comes from joining together the initials of the Financial Times and London Stock Exchange, which used to own 50 per cent of the index each.
When the index started in 1984 is was given a value of 1000. That number goes up and down based on index constituents’ market capitalisation – or the value of all the shares added together. The more valuable the company, the more influence over the direction of the index the company will have. At the moment, Shell is highest valued company in the index with a market cap of £133 billion, followed by HSBC at £111 billion.When the index started in 1984 is was given a value of 1000. That number goes up and down based on index constituents’ market capitalisation – or the value of all the shares added together. The more valuable the company, the more influence over the direction of the index the company will have. At the moment, Shell is highest valued company in the index with a market cap of £133 billion, followed by HSBC at £111 billion.
Not exactly. The FTSE 100 is useful as an economic indicator. A peak like the 7000 mark shows that corporate profits are good and optimism is growing, though the effects of that might take a long time to trickle down into the wider economy. You may feel the effects through your pension, as funds are often tied to stock indexes. The index is not directly linked to the British economy, however. Many of the companies in the FTSE 100 are multinational. Even if the UK GDP grows by 2.6 per cent, like it did in 2014, the FTSE 100 can contract – as it did, by 2.7 per cent.Not exactly. The FTSE 100 is useful as an economic indicator. A peak like the 7000 mark shows that corporate profits are good and optimism is growing, though the effects of that might take a long time to trickle down into the wider economy. You may feel the effects through your pension, as funds are often tied to stock indexes. The index is not directly linked to the British economy, however. Many of the companies in the FTSE 100 are multinational. Even if the UK GDP grows by 2.6 per cent, like it did in 2014, the FTSE 100 can contract – as it did, by 2.7 per cent.
There could be a few reasons why the top stocks increased in value today:There could be a few reasons why the top stocks increased in value today:
Talk of 7000 as a ‘psychological barrier’ comes from the fact that it has taken 17 years for the FTSE 100 to climb above that level. The FTSE actually fell quite heavily during the financial crisis, bottoming out below 3500 in March 2009 before rising above 6000 in February 2011. After the events of September 2011 the index tanked again and has been climbing steadily since. It reached a new record high on March 5, at 6961 and then crept above it on March 20. Talk of 7000 as a ‘psychological barrier’ comes from the fact that it has taken 17 years for the FTSE 100 to climb above that level. The FTSE actually fell quite heavily during the financial crisis, bottoming out below 3500 in March 2009 before rising above 6000 in February 2011. It reached a new record high on March 5, at 6961 and then crept above it on March 20.
Sit back and watch. With low inflation, low interest rates and low oil prices, the steady ascent of the index is likely to continue.Sit back and watch. With low inflation, low interest rates and low oil prices, the steady ascent of the index is likely to continue.