May Commodity Prices Affect The top Stock Market?

Most casual Stock Market investors don't pay too much attention to the present price of the many different commodities such as petrol, gold and copper, for example. However these current prices may have a major bearing on immediately the main Stock Market indices.

Just take a assess the FTSE 100 companies, for example. This is a weighted index which means the companies with the largest market capitalisation seem like BP, Vodafone, Glaxosmithkline have more of an impact on the value of the FTSE 100 the smaller ones.

You notice the company with peak market capitalisation is HYPERTENSION LEVELS, whose share price is invariably heavily influenced by entertainment crude oil. At the time of writing is going to be BHP Billiton, Rio Tinto, Anglo U . s and Xstrata at 9, 11, 20 and 21 respectively inside the list of FTSE 100 providers. These are all mining companies whose share price is determined slightly by the price of the numerous commodities.

At the moment negotiated various commodities including real estate agent, gold, lead, nickel and silver are usually trading at very high levels on a yearly and track record basis. As a result the stock values of the major mining companies ended up being driven higher because they obviously make money from home selling these commodities marriage ceremony price is higher.

The knock-on effect of this would FTSE 100, which includes a large number of mining companies, and indeed is heavily really down to them because every one has significant market capitalisation strength, has been driven higher perfect after this. At the time of writing there's certainly mining Stocks scheming to make new highs, and the FTSE 100 in the vicinity making new highs as well.

If commodity prices would be to drop sharply, you would undoubtedly see the need for both the individual mining Stocks or go with the FTSE 100 typically fall sharply as well considering they are very closely correlated.

So the point I want to get across in this article always be very important that you keep an eye on commodity prices because there is a major impact on the fundamental Stock Market indices. When commodity affordability is high, the main Stock Market may want to generally be trading at high levels as well as the, whilst the reverse applies when commodity prices was at very low levels. For long term investors the bargains will be had when commodity charges are low, but that seems some distance off at the a few moments.

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