FTSE 100 AND DJIA

FTSE 100 and Dow Jones Industrial Average Index



FTSE 100 and Dow Jones Industrial Average Index

Introduction

The FTSE 100 index (pronounced as "Footsie") is the most important British equity index. FTSE refers to the Financial Times Stock Exchange. The FTSE 100 is a Publisher that provides information on development and State of the British share prices of the 100 largest and most companies on the London Stock Exchange. Thus, forms the market segment of the British blue chips from and is the benchmark index for the UK stock market.

The Dow Jones industrial average (DJIA) is a price index and comprises 30 American companies on the New York Stock Exchange (NYSE). It is calculated without dividends, Options and special payments, which mean that it is a price-weighted index. The index level is determined exclusively on the basis of stock prices and only adjusted for income from stock options and special payments. The calculation is based on the summation of the individual stock prices and the subsequent division by the number of shares in the index.

The Dow Jones industrial average is calculated using the formula:

Here p is the sum of share prices and d the Dow divisor.

Discussion

The data for the point's index of the FTSE 100 index and Dow Jones Industrial Average have been taken from their official websites, the data set comprises of last five days i.e. from 8th of August 2011 to 12th of August 2011. We have taken the opening as “Open”, highest as “High”, lowest as “Low” and closing as “Close” points as the variables for our data set.

FTSE 100 INDEX

Date

Open

High

Low

Close

12-Aug-11

5,162.80

5,320.00

5,099.30

5,320.00

11-Aug-11

5,007.20

5,172.70

4,943.00

5,162.80

10-Aug-11

5,164.90

5,262.70

4,990.80

5,007.20

9-Aug-11

5,069.00

5,175.60

4,791.00

5,164.90

8-Aug-11

5,247.00

5,295.80

5,062.40

5,069.00

Dow Jones Industrial Average

Date

Open

High

Low

Close

12-Aug-11

11143.31

11,302.05

11,010.21

11,269.02

11-Aug-11

10,719.94

11,143.34

11,121.36

11143.31

10-Aug-11

11,239.77

10,719.94

10,700.45

10,719.94

9-Aug-11

10,809.85

11,243.98

11,150.31

11,239.77

8-Aug-11

10,932.78

10,810.96

10,799.65

10,809.85

a) Compare the highest and lowest values

FTSE Highest Points

5,320.00

12-Aug-11

FTSE Lowest Points

5,007.20

10-Aug-11

It can be seen from the above table that the highest points FTSE 100 index reached last week at 5320.00, which was on the 12th August, whereas the lowest was observed on the 10th August, when the index reached at 5007.20 points. The 6% difference between the highest and lowest points shows that index was fluctuated within a week, although it was only 6% but it matters a lot for an index to fluctuate this much.

DJIA Highest Points

11,269.02

12-Aug-11

DJIA Lowest Points

10,719.94

10-Aug-11

The above table shows the highest and lowest index points for DJIA; it shows the similar trend as in the FTSE index that the Dow Jones Industrial Average reached it highest points on the 12th August and lowest points on 10th August. The difference between the highest and lowest points is 5%, which means that DJIA also fluctuates within week a lot.

Comparing the highest and lowest points on the basis of indices suggest that there is a huge difference between the two indices, as the FTSE 100's highest value reached in the last week was 5320 while DJIA reached at the highest points of 11269.02, this is a very significant difference shown by the performance of their stock markets. These indices provide a general trend of the evolution of the market and therefore facilitate the comparison between the different stock ...