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The FTSE 100 is the blue-chip market index in the United Kingdom with a bucket of a hundred biggest companies by market capitalisation listed on the London Stock Exchange. These large companies belong to different business segments, dominated by Energy, Banking and Retail sector. It is a weighted market capitalisation index. People use and trade FTSE 100 stocks to gain broad exposure of large UK listed entities. Investing in FTSE 100 means investing in a basket of a large group of top- performing companies from different sectors.
Many popular indices across the world tend to be volatile and the FTSE 100 had also shown strong volatility in short to medium term and is looked upon as a window of opportunity for traders. This volatility attracts the traders looking to time the market in the shorter period than the long-term investors. Equity as an asset class creates wealth in the long term despite this volatility. For instance, the FTSE 100 value rose to 7,585 in the last week of January 2020 despite major events like the Brexit and the general elections from 5,900 in January 2016. This implies that the market has always recovered and reached new highs despite several big corrections. The long-term investors who remain invested throughout the market cycles end up making profits.
FTSE 100 is largely driven by several factors such as the currency. A large proportion of the index is made by international companies; the movement of the currency is a huge factor. Another factor is Energy & Metal prices causes a significant impact as a lot of resource companies to operate in the UK. The result announcement of the FTSE 100 companies can also have a huge impact on the overall index.
How to invest in FTSE 100?
There is a concept called value investing. The companies in the FTSE 100 are mostly sound in their fundamentals and have resilient business models which are profitable. These companies have a lower risk profile and possess a stable outlook. They might not deliver double-digit growth but ensure stable returns even in the challenging times. The simplest way to invest in FTSE 100 is by investing is low-cost index funds that track the FTSE 100; however, it is a passive approach.
London’s broader equity benchmark index FTSE 100 regained 6,000 points mark today (29th April 2020) since its crash on 12th March 2020. The oil price has also shown signs of recovering this morning as US crude surged 13 per cent to $13.94 per barrel and Brent crude gained 3 per cent to $21.07 per barrel. Investors are hopeful for the resurrection of the world’s economy with a phased easing of the Covid-19 lockdowns. Energy, Telecommunication services and Basic Materials are the top-performing sectors while writing. Let us discuss some of these market movers.
Top Movers of the day
- Carnival Plc
Carnival Plc provides travellers with extraordinary vacations around the globe and is the world’s largest leisure travel company. The company’s turnover increased to $4.8 billion in the first quarter of 2020 as compared to $4.7 billion in contrast to the first quarter of 2019. The company has a robust business model in place to weather different market cycles.
The FTSE 100 listed group, with the ticker symbol “CCL” traded on LSE at GBX 1,101 on 29th April 2020 at the time of writing (GMT 12:31 PM before the market close), which was 10.50 per cent up from the previous day closing price. Stock’s 52 weeks High and Low are GBX 4,175.00/GBX 581.
The total M-Cap (market capitalisation) of the company while writing stood at £1,818.80 million along with an annual dividend yield of 15.95 per cent. The company provided a price return of nearly 21 per cent in the last one month.
- Barclays Plc
UK based Barclays PLC (LON:BARC) is into financial services offering retail, commercial and investment banking services. Barclays’ total income was up by 20 per cent to £6,283 million in the first quarter of 2020.
The FTSE 100 listed group, with the ticker symbol “BARC” traded on LSE at GBX 104.72 on 29th April 2020 at the time of writing (GMT 12:40 PM before the market close), which was 7.12 per cent up from the previous day closing price. Stock’s 52 weeks High and Low are GBX 192.99/GBX 73.04.
The total M-Cap (market capitalisation) of the company while writing stood at £16,943.92 million along with an annual dividend yield of 3.07 per cent. The company provided a price return of nearly 12.17 per cent in the last one month.
- Centrica Plc
Global energy solutions and services provider, Centrica Plc (LON:CNA) focuses on adapting to the evolving needs of the consumer with an aim to reduce carbon footprint in the long term. The company has a strong balance sheet and cash balances of £0.6 billion on 31st March 2020. S&P has rated the company stable (BBB) in March.
The FTSE 100 listed group, with the ticker symbol “CNA” traded on LSE at GBX 37.89 on 29th April 2020 at the time of writing (GMT 12:51 PM before the market close), which was 5.48 per cent up from the previous day closing price. Stock’s 52 weeks High and Low are GBX 107.40/GBX 29.10.
The total M-Cap (market capitalisation) of the company while writing stood at £2,091.13 million along with an annual dividend yield of 4.18 per cent. The company provided a price return of nearly 26 per cent in the last one week.
- Meggitt Plc
Meggitt Plc (LON:MGGT) is an engineering company, which provides advanced technologies, products and services, with a specialisation in high-performance components and sub-systems. The company recorded strong revenue growth of 8 per cent in the fiscal year 2019. The company announced an annual dividend of 17.50 pence in the fiscal year 2019.
The FTSE 100 listed group, with the ticker symbol “MGGT” traded on LSE at GBX 281.10 on 29th April 2020 at the time of writing (GMT 12:55 PM before the market close), which was 3.69 per cent up from the previous day closing price. Stock’s 52 weeks High and Low are GBX 701.80/GBX 196.15.
The total M-Cap (market capitalisation) of the company while writing stood at £2,107.99 million along with an annual dividend yield of 2.05 per cent. The company provided a price return of nearly 6.2 per cent in the last one month.
- WPP Plc
WPP Plc (LON:WPP) is a leading provider of communication services across the world. The company recorded a healthy revenue in the fiscal year 2019. The company declared a dividend of 60 pence per share in 2019.
The FTSE 100 listed group, with the ticker symbol “WPP” traded on LSE at GBX 623.40 on 29th April 2020 at the time of writing (GMT 1:03 PM before the market close), which was 5.59 per cent up from the previous day closing price. Stock’s 52 weeks High and Low are GBX 1,085.50/GBX 450.
The total M-Cap (market capitalisation) of the company while writing stood at £7,234.34 million along with an annual dividend yield of 3.84 per cent. The company provided a price return of nearly 21 per cent in the last one month.
Before you invest…
Some people tempt to choose growth stocks over FTSE 100. These are like dark horses and might be risky in challenging times. They might end up generating enormous gains, but at the same time, they are the ones which do not guarantee the safety of your capital.
The huge price correction in markets mostly driven by the pandemic is the best time to create a position in the markets for investors seeking capital appreciation in the long-term horizon. However, before investing investors should ensure that they have access to an emergency fund, health insurance, and enough liquidity to manage their living expenses for at least 8 to 9 months. To capitalise on these rarest of rare opportunities to time the market, they must research and if required, seek guidance from experts as well.
