How does commodity price affect stock market?
Most casual stock market investors are less concerned with the current prices of various commodities, such as oil, gold and copper. However, these current prices may have a significant impact on the value of major stock market indices.
Just look at the FTSE 100 index company. This is a weighted index, meaning that companies with the largest market capitalization, such as BP, Vodafone, GlaxoSmithKline, have a greater impact on FTSE 100 than on FTSE 100
You will see the company with the highest The market value of BP, the stock price is clearly affected by the serious impact of crude oil prices. At the time of this writing, you also have BHP Billiton, Rio Tinto, Anglo American, and Xstrata on the FTSE 100 Index Companies at 9, 11, 20, and 21, respectively. These are all mining companies whose share prices are largely determined by the prices of various commodities
Currently, prices of various commodities including copper, gold, lead, nickel and silver are very high The level is on an annual and historical basis. As a result, the prices of major mining companies have been pushed higher as they apparently earn more money to sell these commodities when prices are higher
The knock-on effect of this is that FTSE 100 includes many of these mining Companies, in fact, affected by their great, because they have a significant market value, so be driven higher. At the time of writing, you have mining stocks trying to create new highs, and the FTSE 100 is close to creating new highs.
If commodity prices plummet, you will undoubtedly see both the value of individual mining stocks and FTSE 100 overall plummeted as they are very closely related
So I would like to The focus of the discussion is that keeping your eyes on is a very important commodity price because they have a significant impact on the major stock market indices. When the commodity price is high, the major stock markets are also usually at a high level, and when the commodity price is at a very low level, the opposite is true. For long-term investors, commodity prices are cheap, but now it seems there is still a long way to go.