Free float indices

Telecom Italia, L'Oreal SP and Allianz AG are among dozens of European companies whose shares may tumble amid growing pressure to recalculate benchmark stock indexes to eliminate shares that cannot be bought by investors. Many fund managers decide which stocks to own based on indices created by companies such as Dow Jones Stoxx and Morgan Stanley Capital International. Those indices are typically based on the market capitalisation of their constituents rather than the value of accessible shares, known as the free float. That is set to change, however, as index compilers acknowledge that th...