FTSE HITS 14 YEAR HIGH

FTSE 100 hits the high notes

The FTSE 100 index shook off the Ukrainian blues yesterday (13 May) to hit a 14 year high  of 6877.39, exceeding last year's high of 6875. Although it dipped during the day, at the close it was threatening to break its high again. The stockmarket seems optimistic in spite of the uncertainty in the Ukraine, and the possibility that China may lower bank reserves to stimulate the economy.

The UK gain mirrors the USA, where both the Dow Jones and the S&P 500 indexes reached record highs on the 12th, boosted by an upturn in technology shares. To beat the all-time high, the FTSE 100 needs to go above 6950.62, which it last reached in 1999.

What is the Financial Times Stock Exchange 100? It is an index tracking the performance of the top 100 UK companies by market capitalization - i.e. value of shares issued, or outstanding. Started in 1984, its component companies must meet certain criteria to be eligible for inclusion, such as free float requirements (number of shares publicly available) and liquidity (share turnover). The index is reviewed quarterly.

The 100 index is one of several FTSE indexes available (FTSE 250 and FTSE all share indexes being two others), and is seen as the primary measure of the health of UK stocks.

So what industry sectors make up the FTSE 100? The table below has been ordered by sector, and should give you a clear picture. The figures for market capitalization were correct at May 2nd. The largest company by market capitalization is Shell, and the smallest is William Hill. Bear in mind that the list will be reviewed at the end of the second quarter, so a few companies might be superseded by new entrants.

FTSE 100 by industry sector

EPIC	Name	Mkt cap (m)*	Sector
BA.	BAE Systems	13,037.40	Aerospace & Defence
MGGT	Meggitt	3,798.50	Aerospace & Defence
RR.	Rolls-Royce Group	19,291.80	Aerospace & Defence
GKN	GKN	6,243.70	Automobile and Parts
BARC	Barclays	41,649.20	Banks
HSBA	HSBC Holdings	114,051.10	Banks
LLOY	Lloyds Banking Group	56,823.20	Banks
RBS	Royal Bank of Scotland Group	20,573.20	Banks
STAN	Standard Chartered	31,245.40	Banks
CCH	Coca-Cola HBC AG	5,388.40	Beverages
DGE	Diageo	45,822.40	Beverages
SAB	SABMiller	52,176.60	Beverages
JMAT	Johnson Matthey	6,778.70	Chemicals
CRH	CRH	12,531.30	Construction & Materials
SSE	SSE	14,783.10	Electricity
AND	Aberdeen Asset Management	5,347.20	Financial Services
HL.	Hargreaves Lansdown	5,658.60	Financial Services
LSE	London Stock Exchange Group	4,950.30	Financial Services
SDR+SDRC	Schroders	7,034.50	Financial Services
BT.A	BT Group	29,849.70	Fixed Line Telecommunications
SBRY	Sainsbury (J)	6,109.70	Food & drug retailers
TSCO	Tesco	23,080.90	Food & drug retailers
MRW	Wm Morrison Supermarkets PLC	4,580.40	Food & drug retailers
ABF	Associated British Foods	22,958.50	Food producers
ULVR	Unilever	34,142.70	Food producers
MNDI	Mondi	3,571.00	Forestry & Paper
CAN	Centrica	16,719.40	Gas, water & multiutilities
NG.	National Grid	31,278.30	Gas, water & multiutilities
SVT	Severn Trent	4,379.70	Gas, water & multiutilities
UU.	United Utilities Group	5,413.50	Gas, water & multiutilities
REX	Rexam	3,990.70	General Industrials
SMIN	Smiths Group	5,208.30	General Industrials
KGF	Kingfisher	10,118.20	General retailers
MKS	Marks & Spencer Group	7,123.80	General retailers
NXT	Next	10,247.60	General retailers
SPD	Sports Direct International	4,718.90	General retailers
SN.	Smith & Nephew	8,188.10	Health Care Equipment & Services
BDEV	Barratt Developments	3,690.10	Household Goods & Home Construction
PSN	Persimmon	4,039.60	Household Goods & Home Construction
RB.	Reckitt Benckiser Group	34,838.40	Household Goods & Home Construction
IMI	IMI	4,133.10	Industrial engineering
MRO	Melrose Industries	3,078.10	Industrial engineering
WEIR	Weir Group	5,657.20	Industrial engineering
RMG	Royal Mail Group	5,385.00	Industrial transportation
AV.	Aviva	15,412.50	Life insurance
FLG	Friends Life	4,251.49	Life insurance
LGEN	Legal & General Group	12,679.60	Life insurance
OML	Old Mutual	9,921.70	Life insurance
PRU	Prudential	35,024.30	Life insurance
STJ	St James's Place	4,043.00	Life insurance
SL.	Standard Life	9,138.00	Life insurance
BSY	British Sky Broadcasting Group	14,151.10	Media
ITV	ITV	7,426.90	Media
PSON	Pearson	8,954.50	Media
REL	Reed Elsevier	10,233.50	Media
WPP	WPP Group	17,297.40	Media
AAL	Anglo American	21,818.40	Mining
ANTO	Antofagasta	7,793.20	Mining
BLT	BHP Billiton	40,764.90	Mining
FRES	Fresnillo	6,131.00	Mining
GLEN	Glencore Xstrata	41,820.40	Mining
RRS	Randgold Resources Ltd	4,373.80	Mining
RIO	Rio Tinto	45,869.20	Mining
VOD	Vodafone Group	58,930.90	Mobile telecommunications
ADM	Admiral Group	3,841.10	Non-life insurance
RSA	RSA Insurance Group	4,952.30	Non-life insurance
BG.	BG Group	42,664.40	Oil & Gas producers
BP.	BP	95,619.20	Oil & Gas producers
RDSA+RDSB	Royal Dutch Shell	153,517.30	Oil & Gas producers
TLW	Tullow Oil	8,043.70	Oil & Gas producers
PFC	Petrofac Ltd	5,060.70	Oil equipment & services
BRBY	Burberry Group	6,615.50	Personal Goods
AZN	AstraZeneca	60,360.50	Pharmaceuticals & biotechnology
GSK	GlaxoSmithKline	79,029.10	Pharmaceuticals & biotechnology
SHP	Shire	20,318.70	Pharmaceuticals & biotechnology
BLND	British Land Co	6,886.60	Real Estate Investment Trusts
HMSO	Hammerson	4,077.60	Real Estate Investment Trusts
LAND	Land Securities Group	8,331.10	Real Estate Investment Trusts
SGE	Sage Group	4,633.60	Software & computer services
AGK	Aggreko	4,425.50	Support Services
AHT	Ashtead Group	4,394.20	Support Services
BAB	Babcock International Group	4,373.90	Support Services
BNZL	Bunzl	5,509.20	Support Services
CPI	Capita Group	7,208.60	Support Services
EXPN	Experian	11,246.00	Support Services
GFS	G4S	3,692.80	Support Services
ITRK	Intertek Group	4,724.60	Support Services
TPK	Travis Perkins	4,309.80	Support Services
WOS	Wolseley	9,233.00	Support Services
ARM	ARM Holdings	12,406.00	Technology hardware & equipment
BATS	British American Tobacco	64,089.90	Tobacco
IMT	Imperial Tobacco Group	24,204.30	Tobacco
CCL	Carnival	5,114.50	Travel & leisure
CPG	Compass Group	17,540.60	Travel & leisure
EZJ	easyJet	6,507.30	Travel & leisure
IHG	InterContinental Hotels Group	5,675.50	Travel & leisure
IAG	International Consolidated Airlines Group SA	7,545.80	Travel & leisure
TT.	TUI Travel	4,827.60	Travel & leisure
WTB	Whitbread	7,357.20	Travel & leisure
WMH	William Hill	3,039.36	Travel & leisure

In the ten years to 2012 the best performer was Rangold Resources (mining). A £100 investment in 2002 would have grown to £2,438 ten years later. BHP Billiton also did well, as did Tullow Oil. It seems that if you have the patience and nerve to stick with commodities over the longer term it pays off. British American Tobacco also generated a good return. By contrast, the banking sector was best avoided. An investment of £100 in RBS would be worth just £4 today.

In 2013 the Travel and Leisure sector took the spotlight, specifically air travel. International Airlines Group gained 117%, and Easyjet rose 100%. The mining sector underperformed, with Randgold Resources dropping 36%.

Where next? Pundits are predicting the FTSE 100 index to break 7000 this year. But before that happens, a word for those technical traders among you. The monthly chart shows a steady(ish) uptrend since 2009. But if you drop down to the daily level you'll notice that the index has traded in a range between 6425 and yesterday's high of 6877. There could be room for a pullback now, and there's a level of resistance around 6840, that if broken could signal a further fall. Bear in mind that this is an observation and not a recommendation to trade, I leave you to make your own decisions. Right now the mood is bullish, so let's see what happens next.

Darren Winters