Why dose the FTSE100 and 250 in very similiar patterns??

adamt

Ive recently wondered about this.

I understand the FTSE100/250 represent the movement of the 100/250 stocks all combined.

So how come if the FTSE100 rises abit in the morning then sinks an hour later, the FTSE250 does a virtually identical movement?

Are the FTSE 100 shares included in the FTSE250?

I dont get why just because the top100 are being sold, that automatically the 260 are being sold?

could someone explain please.

thanks

cos69

The FTSE100 and the FTSE250 comprise different stocks, those stocks are combined into the FTSE350 index. There is also the AllShare index

As to why the 2 move in tandem, well that comes down to market sentiment with the same sentiment applying to both FTSE100 and FTSE250 companies.

dunstonh

I would say that the two dont tend to move in tandem. Obviously the daily data and sentiment impacts on both and gives a trend but its not uncommon to find the FTSE 100 ends up but the FTSE250 ends down or vice versa.

Different news is going to affect large caps, small caps and mid caps in different ways. The FTSE100 is also a very narrow focused index when it comes to diversification. Its make up is different to the 250.

adamt

thanks for explaining.

Looking on : http://www.moneyam.com/
The two always seem to mov in almost identical ways.

dunstonh

adamt wrote: »

thanks for explaining.

Looking on : http://www.moneyam.com/
The two always seem to mov in almost identical ways.

At the time I am looking that shows that just after 4 hours of trading in one day, that one is down 0.6 and the other 0.2. Look at longer periods and you will see the differences open up.

ses6jwg

I believe the FT100 is heavily weighted to the financial and commodoties (oil, gas, mining) sector.

The FT250 is more representative of the performanc of the UK economy.

gotmaintvtr

the two have a similar pattern over a 6mionth period too.

sabretoothtigger

They'll move together often because alot of movement is on the same news from america quite often, our biggest trading partner

Long term the 250 has done much better. If a company gets too big, its taken out of 250 and put into the 100. For that reason alone I think the 250 trackers do better as they sell off companies which have risen most in value.

250 is growth and 100 has the higher dividends I think

turbobob

Intraday the FTSE 100 moves quite closely with the European indices, and when the two are open together the US indices as well. I guess its to do with short term traders using leverage to move the markets. For example see today with the German DAX (in black) and the FTSE100 (in blue). They are obviously following the same general pattern.

purch

Sheep !!!!