Introduction to indices
Generally, indices are financial products that are constructed from the constituents of a particular global exchange, such as the UK 100 or US 30. Some of the most popular global indices are listed below. To view the full list, please click here.
UK 100
Description
The UK 100 consists of the largest companies in the UK and is similar to the FTSE100. The larger the company, the greater the influence it has on the index price. In the UK, banking, energy and mining companies dominate the mix. The index is a popular short-term indicator for the UK economy.
Influencing factors
As the UK is one of the leaders in financial services, the health of the global financial services industry and the strength of the domestic property market are important factors. A large percentage of the UK 100 constituents are mining and oil companies, so monitoring demand and supply in these areas is also important.
Germany 30
Description
The Germany 30 index consists of a mixture of the largest companies in Germany and is similar to the DAX. The larger the company, the greater its influence is on the index price. In Germany banks and automobile companies dominate the mix.
Influencing factors
Germany is a key member of the Eurozone, so economic stability in the region plays a major role in influencing its value. Germany’s key industries are technology, chemicals, automobiles and pharmaceuticals. Changes in export demand for these sectors could play a role in influencing its value. Other factors include Germany’s labour costs relative to other markets, currency and credit risks, the stability of government and prevailing levels of public sector borrowing.
US 30
Description
The US 30 consists of the largest companies in the United States and is similar to the Dow Jones Industrial Average. The larger the price of a stock, the greater its influence on the index price. In the US, banking, energy and technology companies dominate the mix.
Influencing factors
The health of the global financial services industry and the strength of the domestic property market, coupled with the available money supply.
US SPX 500
Description
The US SPX 500 Shares consist of the largest companies in the United States and is similar to the S&P 500. The larger the company, the greater its influence on the index price. In the US, banking, energy and technology companies dominate the mix.
Influencing factors
The health of the global financial services industry and the strength of the domestic property market, coupled with the available money supply.
Japan 225
Description
The Japan 225 index consists of the largest companies in Japan and is similar to the Nikkei 225. The larger the stock price, the greater the influence it has on the index price. In Japan, banking and manufacturing companies dominate the mix.
Influencing factors
Japan is a net commodities importer due to a lack of natural resources, so cost of raw materials can affect the index price. The price of domestic business, political reforms and volumes of manufactured goods for export are also influencing factors.
Australia 200
Description
The Australia 200 index consists of a mixture of the largest companies in Australia and is similar to the S&P/ASX200. The larger the company, the greater its influence is on the index price. In Australia, banking and mining companies dominate the mix.
Influencing factors
Global demand for natural resources, particularly base metals, as well as the health of the global financial services sector, greatly impact this index. Continuation of favourable trade agreements between Australia and China would further benefit the economy. Other factors include currency and credit risks, the stability of the government and the prevailing levels of public sector borrowing.