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What is the UK 100?
The UK 100 stock index is a key benchmark for the UK stock market. It comprises the 100 largest companies by market capitalisation listed on the London Stock Exchange (LSE). These sit in sectors as diverse as finance, energy, consumer goods, and technology.
Thanks to its composition, the UK 100 is a useful gauge of investor confidence in the UK – and therefore the country’s economic health. As such, traders can use the index to help inform their decisions on related assets like shares, GBP forex pairs and so on.
The UK 100 is managed by FTSE Russell, part of the London Stock Exchange Group. To ensure that it represents market conditions, the index is recalculated every 15 seconds during trading hours. Likewise, its composition is reviewed quarterly to ensure that its constituents are correct.
Frequently referenced in news and analyst reports, the UK 100 is a well-known and well-regarded benchmark – underlining its importance to the economy in the UK, and around the world.
UK 100 performance history
The UK 100 launched on 3 January 1984 with a base level of 1,000 points. Its price has been influenced by a range of economic events over the years. Let’s take a look.
Back in the late 1980s, the UK 100 enjoyed robust growth, a reflection of the booming UK economy. The seasoned traders among you will know what’s coming next, though. That’s right – October 19 1987, or Black Monday, which saw the index plummet 11% on the day.
In happier news, the roaring ‘90s saw the UK 100 recover and grow. As with many global indices, this was largely driven by the technology boom, with the index reaching new highs during the dot-com bubble in December 1999.
The early 2000s, however, brought fresh volatility. The dot-com bubble burst in 2000, and with the 9/11 attacks on top of that, the UK 100 declined steadily from the turn of the millennium. It hit a low in March 2003, but recovered steadily in the second half of the decade until the 2008 financial crisis, which led to a significant drop as global markets reeled.
The UK 100 showed resilience following 2008, reaching new highs in the following years as its performance was boosted by central bank interventions and economic recovery efforts. The COVID-19 pandemic in 2020 caused another sharp decline, but the index rebounded quickly from March through the rest of the year, reflecting the UK government’s response to the crisis.
Today, the UK 100 remains a crucial indicator of the UK’s economic strength as it responds to global economic events.
Past performance is not a reliable indicator of future results.
What are the UK 100’s trading hours?
The UK 100 is generally tradeable during the opening hours of the London Stock Exchange, which is open Monday-Friday at the following times:
| Session | UK time/UTC (in winter) | UTC (in summer, when BST is observed) |
|---|---|---|
| Pre-market trading | 5.05am-7.50am | 4.05am-6.50am |
| Regular trading | 8am-4.30pm | 7am-3.30pm |
| Post-market trading | 4.40pm-5.15pm | 3.40pm-4.15pm |
Please bear in mind that these times are set by the exchange and could change.
With Capital.com, you can trade our UK 100 CFD or market – which tracks the price of the UK 100 – outside of market opening hours too:
| Day | Times (UTC) |
|---|---|
| Monday-Thursday | 12am-9pm; 10.01pm-12am |
| Friday | 12am-9pm |
| Saturday | (Closed) |
| Sunday | 10.01pm-12am |
What companies are in the UK 100?
The UK 100 is made up of the top 100 companies listed on the London Stock Exchange, chosen by market capitalisation (calculated as share price x number of outstanding shares).
Companies have to meet other criteria to be included, too. At least 25% of a listed company’s shares must be available for public trading – i.e. not held by company executives or similar – for it to be included. Companies must also be actively traded, or liquid, to qualify.
Companies in the UK 100 span a range of industries and sectors. Some of the best-known include:
- HSBC, one of the world’s largest banking and financial services providers.
- BP, leading oil and gas company.
- Unilever, multinational consumer goods company.
- GlaxoSmithKline (GSK), global pharmaceutical leader.
- Diageo, top alcoholic beverages provider.
The UK 100 is reviewed quarterly – in March, June, September, and December – by the FTSE Russell Index Committee. The committee can add or remove companies during these reviews to reflect changes in market capitalisation.
How to trade the UK 100
Placing a single trade on the UK 100 gives you exposure to the top 100 companies listed on the London Stock Exchange. You can do this to take a position on where you think the UK economy is headed, and also use it to diversify your portfolio across different industries and sectors.
The UK 100 is an index, so you can’t trade it as you would a share, by buying or selling it outright on an exchange. To trade on an index’s price, you’ll need to use a derivative – a type of financial product that takes (or ‘derives’) its price from an underlying market like the UK100. Derivatives include contracts for difference (CFDs), for example.
A contract for difference is a contract between a trader and broker to exchange the difference in the price of an underlying market between the open and close of the contract.
If you want to trade on the UK 100 with Capital.com, you could use our UK 100 CFD market, which tracks the index’s price. Should you choose to do this, you should be aware that you won’t own any assets as you would if buying a share.
That may sound like a drawback. But you have some unique options open to you when trading CFDs that you wouldn’t have if you were buying or selling assets outright. For example, if you think the UK100’s price is headed for a fall, you can ‘go short’ – enabling you to trade on that falling price, which you can’t do when buying a share. Take a look at our ‘trading vs investing’ guide to find out more.
CFDs also give you access to leverage, meaning that you can open a comparatively large trade for only part of its full value. This initial capital outlay is known as ‘margin’. Find out more about margin trading with our helpful guide.
Along with these advantages, you should also remember that leverage can lead to both large, fast losses and gains. This makes trading CFDs a complex and high-risk strategy, so you should make sure that you’re well-versed in the product, markets and risks before you trade.
Take a look at our CFD trading guide to help you get on the right track.
FAQs
Why is the UK 100 important to traders?
The UK 100 is important to traders for a range of reasons.
Firstly, it provides a comprehensive snapshot of the top 100 companies listed on the London Stock Exchange – and as such can be used to gauge the overall health of the UK economy. This means that the index is often used as a benchmark for economic performance, so traders can use it to inform their decisions on assets outside of the index.
Secondly, it can offer a diversification strategy. Use a CFD to trade on the price of the UK 100, and you’ll gain exposure to diverse sectors like finance, energy, consumer goods, and technology. This enables you to diversify your portfolio in just a single trade.
This can help you mitigate concentration risk, where your portfolio is too concentrated on a single area, but remember – you’ll still be open to things like market risk if the trade doesn’t go the way you predicted. So it’s important to have a solid risk-management strategy in place.
What affects UK 100 prices?
The price of the UK 100 index is affected by a range of factors. Let’s take a look at a few of them.
Economic data like GDP growth, employment figures and inflation rates all affect investor sentiment and, therefore, the index’s performance. Positive economic news typically means that the UK 100 will increase in price – negative news tends to mean that it will fall.
Monetary policy decisions by the Bank of England, like interest rate changes or quantitative easing, also affect the price of the UK 100. If the bank lowers interest rates, for example, stocks can start to look more attractive as an investment strategy. If interest rates rise, however, stock prices can drop as saving starts to look appealing. If the price of the UK 100’s constituent stocks are on the rise, they’ll take the index with them.
Company earnings announcements therefore also have the potential to drive the UK 100’s performance. If a surprise announcement has an outsized effect on a constituent company’s share price, it can take the UK 100 along with it – particularly if it’s one of the top-weighted constituents by market cap.