How is the footsie calculated?
Life for the FTSE 100 started in 1984 and its value was 1,000.
Don't ask why they decided to value it at 1,000.
They just did. Probably thought it was a nice round number.
As we already know, every time the shares of a FTSE 100 company move, the index moves.
So given it is now worth more than 6,000, the movement in the past 22 years has been upward – albeit with a few setbacks along the way.
Size Matters. Not all FTSE 100 companies are equal.
And neither is their impact on the index. Size buys influence. The larger the company, the more weight it is given in the FTSE 100.
Oil giant BP is worth more than £130bn, accounting for almost 10pc of the FTSE 100's value.
So it is not surprising that it exerts more influence than British Airways, worth just over £4bn.
A 1pc change in BP's share price leads to 5.4 point change in the FTSE 100.
A similar movement in BA, would barely register.