The FTSE 100 index represents the top UK companies, but not all of them are performing optimally – Glencore PLC is a case in point. The FTSE 100 index is currently trading at 6,371.18, with over 552.53 million shares traded, and a year-to-date change of +0.49%. While this pales in comparison to top performing individual stocks and Asian stock markets, it is nonetheless a solid performer given the tumultuous activity in global markets since August. Between January 2015 and April 2015, the FTSE 100 index gained 6.39%, followed by a 3.72% drop between April 2015 and July 2015. From July through to the present day the FTSE 100 index has slid by 2.3%, but it is currently on an upward trajectory. My gut instinct tells me that short-term bulls will dominate the market, and ultimately so will long-term bulls. The shocks that we witnessed from the May highs to the September lows were largely the result of the China equities rout that decimated markets around the world.

The top/bottom performing equities in the FTSE 100

The constituent components of the FTSE 100 have fared poorly of late, although the 1-year percentage change in value for many of them has been positive. The Top 5 performers in the FTSE 100 index (by percentage appreciation) over the past 1 year include:

• Taylor Wimpey PLC– up 82.25% over 1 year
• Barratt Developments PLC – up 66.76% over 1 year
• Berkeley Group Holdings PLC – up 55.60% over 1 year
• Sage Group PLC – up 49.67% over 1 year
• Hargreaves Lansdowne PLC – up 45.35% over 1 year

By contrast, the bottom 5 performers in the FTSE 100 index (by percentage depreciation) over the past 1 year include:

• Glencore PLC – down 61% of 1 year
• Anglo American PLC – down 47.82% over 1 year
• Standard Chartered PLC – down 30.54% over 1 year
• BHP Billiton PLC – down 21.71% over 1 year
• Royal Dutch Shell PLC (RDSB) – down 19.66% over 1 year

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When you analyse the markets according to the top performers and the bottom performers, it is clear that the mining and energy sector companies are dragging the FTSE 100 index lower. On Monday, 12 October the FTSE 100 index fell after posting its best weekly performance in 4 years. No surprise – mining stocks led the rout, followed by aerospace stocks. The mining index surged by 19 percentage points in the first week of October, but it is already 2.7 percentage points lower at the start of the new week. Leading the rout was Glencore PLC, despite its plans to shutter copper mines in Zambia, and the Democratic Republic of Congo. Glencore PLC also has plans to sell copper mines in Chile and in Australia.

However, the general consensus among analysts is that these divestitures will do little to inspire investor confidence in the absence of a turnaround in China, and higher commodities prices overall. Glencore PLC is facing a mountain of debt, and potential downgrades to its credit rating. That does not bode well for the stock. We should also bear in mind that whenever an index like the FTSE 100 goes through a week of strong gains, profit-taking is going to come into play. This is precisely why the index is trading lower, and in choppy sessions.

Constituent components of the FTSE 100 index

The breakdown of the constituent components of the FTSE 100 index is as follows:

• Banks comprise 13.34%
• Personal & Household Goods comprise 12.89%
• Oil and Gas comprises 12.33%
• Healthcare comprises 9.92%
• Industrial Goods and Services comprise 6.02%
• Telecommunications comprise 6.10%
• Basic Resources comprise 5%

The highlighted 3 constituent components are among the companies that have performed the worst in the bottom 5 performers in the FTSE 100 index for the year-to-date. This means that if these sectors continue to perform at sub-optimal levels, they will also drag the FTSE 100 index into the red. It is also interesting to point out that the percentage weight of the largest constituent in the FTSE 100 index is 6.26% (HSBC Holdings), and that there are 101 constituents in the FTSE 100 index. The mining sector in the UK has plunged by 28.24% for the year to date, while the 1-year decline is even higher at 31.86%. Not surprisingly, industrial metals dovetail with the performance of the mining sector with a -38.87% decline for the year-to-date and a 26.48% decline for 1 year. Standard Chartered was downgraded recently and this helped to drag the FTSE lower, after Investec downgraded it from a buy to a hold.

Sage advice for investing in the FTSE 100 index

Any uptick in the mining sector will boost the FTSE 100’s performance. This will naturally be followed by an uptick in industrial metals, since the two go hand-in-hand. The banking sector has declined by 7.91% for the year to date, and 8.05% over 1 year. Oil and gas producers have recorded a 9.91% decline for the year-to-date and are trailing over a 1-year period by 14.51%. With the oil price steadily rising, and copper mines being shuttered in emerging market countries, we can expect a slow and steady increase in commodities prices. This will naturally lend itself to a stronger performance of the mining sector, and the FTSE 100 index. Go long on the index, but watch for day-to-day volatility with individual companies like Glencore PLC.