If you don’t know how to pick out good UK stocks and shares to invest in, maybe you can consider stock indices instead.

A stock index measures the price performance of numerous shares.

What is stock indices trading?

Trading stock indices enables you to get exposure to shares with a certain characteristic such as a specific industry, sector, or an entire economy at once.

Stock indices reflect the performance of a broader financial market. Adding them to your portfolio can provide diversification to your investment.

With CFDs, you can speculate on the index price movements without having to own the index itself.

What moves the stock index price?

Company Earnings:

Strong corporate earnings generally lead to a rise in stock prices, as they signal profitability and growth potential.

Economic Indicators:

Factors such as GDP growth, employment data, inflation rates, and interest rates can impact investor sentiment and thus affect stock index prices.

Market Sentiment:

Investor perception of market conditions and future outlook can drive buying or selling behavior, impacting stock index prices.

Geopolitical Events:

Events like political instability, trade disputes, or conflicts can create uncertainty in the market, affecting stock index prices.

Industry Trends:

Developments within specific industries or sectors can influence stock index prices, as they reflect the performance of companies within those sectors.

UK stock indices checklist

FTSE 100:

The FTSE 100 Index consists of the 100 largest companies from various sectors listed on the London Stock Exchange (LSE) by market capitalization.

It is regarded as a benchmark for the UK stock market. Constituents include many big names, such as AstraZeneca, BP, Shell, and Rolls-Royce.

FTSE 250:

The FTSE 250 Index comprises the next 250 largest companies listed on the LSE after the FTSE 100. These companies are considered mid-cap stocks and are often seen as a barometer for the performance of the broader UK economy.

FTSE All-Share:

The FTSE All-Share Index represents the performance of around 600 companies listed on the LSE. It includes companies from the FTSE 100, FTSE 250, and small-cap stocks, providing a broader view of the UK equity market.

FTSE AIM All-Share:

The FTSE AIM All-Share Index monitors the performance of companies listed on the Alternative Investment Market (AIM), a subsidiary market of the LSE tailored for smaller, expanding businesses. It is known for its focus on small-cap and high-growth stocks.

FTSE SmallCap Index:

The FTSE SmallCap Index comprises companies listed on the LSE that are not part of the FTSE 350 Indexes. These companies are typically smaller in size and represent a segment of the UK stock market with medium to small-sized businesses.