To get a flavour of the economic circumstances and to judge the tenor of the market as a whole, a wide range of indices specify sector movements in most of the markets in the world. In Britain the most commonly used is the FTSE100. It contains the largest hundred companies by market capitalization – their worth by the total value of their issued shares. That inevitably means the constitution of the index changes as some corporations fall from grace or get taken over, and others grow or become popular. And sure enough, the Stock Exchange does indeed continuously update the constituents of the FTSE100.
A little further down the pecking order is the next crop of large companies, the FTSE250, and those two are sometimes combined into the FTSE350. Wider still is the 650 All Share (which does not in fact include all shares). The Financial Times produces a full list of the FTSE indices compiled and calculated under formulae developed by actuaries. Newspapers sometimes print figures for the movement of indices for industrial sectors such as engineering and machinery, or construction and building materials – which are then aggregated to form wider industrial indices such as Basic Industries, General Industrials – and some describe the type of company, such as ‘small cap’ (small total market value of the shares).
Every stock market around the world has its indices to indicate market movement as a whole, but the ones reproduced in Britain are generally confined to the local equivalents of the FTSE100. Some of the better known and more commonly used ones are the Dow Jones (actually the Dow Jones Industrial Average), Nasdaq 100, NYSE Composite, and Standard & Poor’s for the United States, though there are larger coverage indices as well such as the Russell 2000 and the Wilshire 5000; Toronto 300 for Canada; Nikkei 225 for Japan; Hang Seng for Hong Kong; Dax for Germany; CAC40 for France; AEX for Amsterdam; BEL20 for Brussels; IBrX for the hundred largest Brazilian companies; and Eurotop 100 for the hundred largest market capitalization companies on European exchanges. There is also the MSCI world index.
In The Daily Telegraph there are two tables of indices on the prices page. One is for the 12 largest foreign stock markets excepting New York and Toronto, which are in the Key Markets table on the facing page (the newspaper owner is Canadian), though Tokyo’s Nikkei index appears on both pages. The other table shows the major British share indices including the FTSE100 and 250 (plus the 350, which is just those two together) and the 30, which was the FTSE100’s predecessor. There is also the Techmark, which is the Stock Exchange’s attempt to show backing for the newcomers and high-technology companies by separating them into a go-go index, which has turned into a bit of a go-stop-go. There is also a table of the highest volumes of trade.