ftse

[dog breath]

what is the ftse? its down 200 today is that bad like?

[New Judge]

The �FTSE� (pronounced �Footsie�) stands for the Financial Times Stock Exchange. There are a number of FTSE indices. The most common are the All Share index, The FTSE 250, and the FTSE 100. There is also a FTSE 30 which is still maintained, but which is now largely redundant

In the context that you refer to, the FTSE is the FTSE 100. This is a list of 100 companies (the 100 largest by their capital value) which are listed on the London Stock Exchange. The index (which is down by about 200 today) indicates the combined share values of those companies.

Being around the 6,000 mark, a drop of 200 represents a drop of about 3.3% in the value of those companies. The drop today was caused by fears of a recession in the USA which will hit the global economy.

Such drops are not good. Many people have funds invested in the stock market either directly (through the ownership of shares) or indirectly through pension funds and investments such as unit trusts. A drop in share values represents a reduction in value of those holdings. Of course an actual loss is only incurred if the shares are sold at the lower price. There is nothing to stop the holders hanging on to their stock in the hope that the price will rise again.

Share values go up and down all the time and many investors hold a �portfolio� of shares to spread their risk. However, a drop like today�s affects virtually all shares. The exception today was Northern Rock which, despite the general drop, went up by about 30% on news that the government announced a better support package to help them over their troubles.