Stock Market Index

  • What is stock market index?
  • World indices
  • Indian indices
  • What do the ups and downs of index mean?
  • Why indices are important?

In simple words, “stock market index is a number that measures the relative value of a group of stocks.” as the stocks in this group change value, the index also changes the value. In other words we can say the stock market index is a method of showing the overall performances of all the companies that are listed in the stock market with a single number. This number is only called as stock market index. It is used by all the investors and traders to understand the current performance of the market and to forecast the future of the stock market that depends on the past values of the index. Different countries stock market index names are as follows that can help you to identify and differentiate the various stock market indices:

Amsterdam Stock Exchange Index – AEX
Argentina Stock Exchange Index – MERVAL
Brazilian Stock Exchange Index – BOVESPA
Canada Stock Exchange Index – TSX
China Stock Market Index – SHANGHAI
Dutch Stock Market Index – DAX
French Stock Market Index – CAC 40
Hong Kong Stock Market Index – HANG SENG
Indian Bombay Stock Exchange Index – SENSEX
Indian National Stock Exchange Index – NIFTY
Jakarta Stock Exchange Index – JAKARTA
Japan Stock Market Index – NIKKEI
London Stock Exchange Index – FTSE 100
Mexican Stock Exchange Index – IPC
New Zealand Stock Exchange – Index NZX 50
Singapore Stock Market Index – STRAITS
Taiwan Stock Exchange Index – TSEC
United States Stock Market Index – DOW
United States Stock Market Index – NASDAQ
United States Stock Market Index – S&P 500

In India NSE (national stock exchange) that is called NIFTY and BSE (Bombay stock exchange) that is called SENSEX are main indices where all major companies of the country listed. Currently the Nifty is working around 5400 points and Sensex is around 18200 points. If the points are in red colour then it shows the market is in negative direction and if they are green it gives positive indications.

The meaning of the ups and downs of the index:
When index goes up, it is because the stock market thinks the prospects of dividends in the future will be better than previously thought. When the dividend prospects become pessimistic, the stock market index drops. The movements of the stock market represent the returns obtained by the typical portfolios in the country.

Why indices are important?
The indices are the most important source of information for an investor as well as a trader. By looking at an index we can know how the market is faring. A stock market index should capture the behaviour of the overall equity market. The index is a lead indicator of market’s overall performance. For example: if your investments are consistently lagging behind the index then it is time for you to come up with a new investing strategy.



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