The new share index launched yesterday by The Independent has received widespread backing from the City and industry.
Fund managers and manufacturing groups both gave an enthusiastic welcome to the Indy 100, which aims to provide a better stock market reflection of the health of the UK economy.
Martin Temple, the director general of the EEF, the manufacturers' group, said the Indy 100 would provide a better reflection of the diversity of Britain's economy than existing stock market indices. "Above all, it reflects the fact that we are an economy no longer dominated by a handful of large multinationals but a wide range of companies across many different sectors," he said.
The index has also won plaudits from leading financial services companies. Mike Fairey, the deputy chief executive of Lloyds TSB, said: "Whilst our business is subject to global competition, we are predominantly a UK-based bank and a major UK employer. So it is useful to look at our position in the context of other UK organisations."
Gary Wilkinson, the director of accounting and taxation at Alliance & Leicester, said: "There's nothing else that shows the British economy in this way - the Indy 100 should produce a valuable insight into the health of the UK economy."
The Indy 100 includes a wide cross-section of companies that is designed to reflect the make-up of the UK economy. It deliberately excludes many of the largest constituents of the FTSE 100 which derive most of their sales and profits from overseas.
The index closed at 3,595.89 last night, down 1.36 per cent on Monday night's level of 3,645.47.
Savers may soon be able to invest in funds that track the performance of the Indy 100.
Gerard Lane, an investment strategist at Norwich Union, another major player in passive fund management, said: "This is an intriguing idea that would be of interest to many investors."
Mr Lane said investors would be particularly attracted to the structure of the Indy 100. Unlike the FTSE 100, which gives greater weighting to the performance of larger companies, each member of the newspaper's index has an equal impact on its overall performance. "In the FTSE 100, the top 12 to 15 companies represent more than 50 per cent of the index."
Andrew Freye-Sanders, a vice-president at the investment bank JP Morgan, said new funds tracking the Indy 100 would attract large institutional investors. "Creating an index that tracks UK GDP should be quite popular among pension funds. I think it is a good idea - the FTSE 100, like many other European indices, suffers from the problem of not reflecting the performance of that country's underlying economy very well."
Neil Woodford, a manager at Invesco Perpetual, said: "The FTSE 100 is a particularly poor guide to the direction of UK GDP because of the huge number of foreign companies, so fund managers are likely to find the Indy 100 interesting."
Simon Pistell, the retail investments manager at Legal & General, one of Britain's biggest managers of index tracking funds, said: "I think there may be a real demand for this kind of product from retail investors and it would be simple to track if there is a market for it. People do like investing close to home and they feel comfortable with many of the names in the FTSE 100, but there is a large international dimension to that index."