Is the FTSE 100 a real barometer of UK businesses?
As we see a growing number of changes in the makeup of the FTSE 100 index it is becoming evident that the UK influence on the leading stock market indicator is reducing. More and more foreign firms have been introduced to the UK stock market pushing many smaller UK operations into the second tier which is known as the FTSE 250. There have also been a number of acquisitions such as Cadbury which have reduced the influence of UK companies yet further.
Many now believe that the FTSE 250 is indeed the main barometer of the UK economy and this index is likely to become more influential in the longer-term. The fact there are so many overseas companies quoted on the London stock market is a testament to the international attractions of London and the international power of the London stock market. There is no doubt that London is still one of the major stock markets of the world and likely to remain so for the foreseeable future even if the European Union has for some time been looking to reduce the influence of London.
Whether overseas companies should be admitted to the FTSE 100 index with very little or no actual physical operations in the UK has been a point of discussion for many years.
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