Associated British Foods (LSE:ABF) fell further than HSBC on Tuesday, yet it was HSBC's smaller decline that did more damage to the index, a quirk explained by how the FTSE 100 is built.

Look only at the percentage moves from Tuesday 3 November 2026, and Associated British Foods (LSE:ABF) appears to be the story. Its shares fell 2.2% at the close, after being down about 3% at midday, and it was among the FTSE 100's fallers after forecasting lower annual profit. HSBC (LSE:HSBA), by comparison, slipped 2.0%.

Yet according to reports of the session, HSBC was the biggest approximate drag on the FTSE 100 in points terms. On a day when the index closed at 10,638.43, down 122.90 points or 1.14%, the bank's modest-looking dip mattered more to the headline number than the larger percentage fall at ABF. The reason lies in how the index is weighted.

How the FTSE 100 is weighted

The FTSE 100 is a market capitalisation-weighted index. Each company's influence on the index depends on its size, measured by the Market Value of its shares, rather than counting every member equally. FTSE Russell also adjusts for free float, which broadly means it counts only the shares that are realistically available for investors to trade, excluding large strategic holdings and similar blocks.

The practical consequence is simple. A company with a large weighting will move the index more for each percentage point its shares change than a company with a small weighting. The index level reflects the combined value of its constituents, so a fall in a very large company removes far more value from the total than the same percentage fall in a much smaller one.

For illustration, suppose two hypothetical constituents, one with twice the index weight of the other. If both shares fell by the same percentage, the larger company would knock roughly twice as many points off the index. Reverse the situation, so that the smaller company falls by a slightly bigger percentage, and the larger company can still do more damage. That is the pattern seen on Tuesday with HSBC and ABF. This example is purely illustrative and uses no actual index weights.

Why HSBC carries so much weight

The fact that a 2.0% move made HSBC the day's largest points drag suggests a heavy index weighting, and banks as a group make up a meaningful part of the FTSE 100. That is why a move in the sector can shift the headline index substantially, even when the percentage changes seem unremarkable.

On Tuesday, the FTSE 350 banks index fell 1.6% ahead of the Bank of England's Interest Rate decision on Thursday 5 November, when a 25 basis point rise from 3.75% to 4% is widely expected. It would be the first increase since August 2023, and money markets had fully priced four quarter-point hikes by next September, according to LSEG data cited by Reuters. Rate expectations can cut both ways for banks: higher rates may support interest margins, but a long cycle can also raise concerns about borrowers and economic growth. Whatever the reasoning, HSBC's size meant its decline translated into a large points contribution.

ABF, by contrast, has a smaller weighting, so its 2.2% fall had less impact on the index level. That does not make its news less significant for its own shareholders. The company reported a 14% fall in adjusted operating profit to £1,508m, an 11% drop in adjusted Earnings Per Share to 156.0p, and said it expects both measures to be lower again in its 2027 financial year, "mainly due to Sugar".

HSBC was not the only large company pulling the index lower. Mining stocks, which also include several sizeable constituents, came under pressure as copper fell to a multiweek low. The FTSE 350 basic resources index fell 2.6%, with Antofagasta (LSE:ANTO) down 3.5%, Glencore (LSE:GLEN) down 2.8%, and Anglo American (LSE:AAL) down about 2.8% at midday. Rolls-Royce (LSE:RR.) and RELX (LSE:REL) were each down more than 1.6% at midday, with no company-specific reason given.

Coca-Cola Europacific Partners (LSE:CCEP) fell 2.1% after flagging cost pressures, while Hiscox (LSE:HSX) bucked the trend with a 2.9% rise after a 9.5% increase in nine-month premiums.

The interplay of size and percentage move explains why the biggest fallers by percentage are not always the companies that matter most to the index on a given day. Market commentators often highlight both: the top movers for their company-specific news, and the largest points contributors for their effect on the headline level.

Why this matters for index investors

For anyone tracking the FTSE 100 through a fund, the weighting system has practical implications. An index fund's performance is shaped disproportionately by its largest holdings. Concentration in a few sectors, such as banks, energy and mining, means those industries can dominate returns, for better or worse.

Weightings are not fixed. FTSE Russell reviews the index each quarter. For the December 2026 review, the market-cap data cut-off is Tuesday 1 December, the results will be announced on Wednesday 2 December after the UK close, and changes will take effect from the open on Monday 21 December. The September review saw easyJet and Ithaca Energy join and Entain and Persimmon leave, and since then Balfour Beatty replaced Schroders and WPP replaced Beazley on 1 October 2026. Between reviews, weights still change naturally as share prices rise and fall.

Key dates to watch

Thursday 5 November:Bank of England MPC decision, with a 25bp rise to 4% widely expected.

Tuesday 1 December:FTSE Russell December review market-cap data cut-off.

Wednesday 2 December:December review announcement, after the UK close.

Monday 21 December:December review changes take effect at the open.

The bottom line

ABF's 2.2% fall made it Tuesday's leading FTSE 100 faller, but HSBC's 2.0% decline did more damage to the index in points terms. The difference comes down to Market Capitalisation weighting, adjusted for free float, which gives larger companies more influence over the headline level. Understanding that mechanism helps explain why the index can move sharply on modest changes in a handful of giants, and why sector concentration matters for anyone following the FTSE 100.