Stock indices are tools that give an idea of the current state of stock markets, in other words, they show the direction of market movement. Often they are also called stock.
Stock indices are calculated based on a certain amount of securities. The number of stocks that influence the calculation of a particular stock index is usually indicated at the end of its name, for example, DAX 30, CAC 40, NASDAQ 100 and S&P 500. Thus, a change in the stock market index reflects the price dynamics of hundreds or tens of stocks. And different stock indices of the same stock market allow us to evaluate it from different angles.
Key stock indices and their characteristics
Nowadays, over two thousand different stock indices are in circulation. But among them it is worth highlighting some of the most popular - these are the indicators FTSE 100, S & P's 500, RTS, NASDAQ, Nikkei, DAX, Dow Jones, MICEX.
FTSE 100
This index characterizes the state of the UK stock market. FTSE 100 is one of the most significant indicators of Europe. It is built on the basis of 100 liquid shares, which are listed on the London Stock Exchange LSE. Calculated since 1984
Standard & Poor's 500
For particular indications, this indicator is often called the barometer of the US economy. As the name says, the United States Standard & Poor's rating agency has traditionally dealt with the determination of this stock indicator. It takes into account changes in the market value of securities of 500 US corporations, which are listed on two major US stock exchanges - NYSE and NASDAQ.
Rts
RTS (PTC, Russian Trading System) is a stock exchange created in 1995, with the aim of establishing a centralized market for all Russian securities on the basis of the regional stock markets operating at that time.
A number of PTC stock indices (RTC) includes stock indices S & P / RUX-OIL, S & P / RUX, RTSI, Rux-Cbonds and RTST and is designed to assess the capitalization of large Russian companies.
NASDAQ
The most popular in the NASDAQ family of stock indicators are the NASDAQ 100 stock indicators along with the NASDAQ Composite. NASDAQ, which, together with AMEX and NYSE, is one of the main US stock exchanges, appeared in early 1971 and is aimed at trading securities of companies specializing in high technology.
Nikkei
A number of Japanese stock exchange indices in Tokyo got its name because of a newspaper that has been publishing these main Japanese indices for several decades now: the Nikkei 500 indicator, Nikkei 300 indicator, Nikkei All Stock Index indicator.
The most popular in this family is the Nikkei 225 stock indicator, which shows the weighted average price of the securities of 225 companies that are listed in the first section of the Tokyo stock exchange.
Dax
This is the main stock indicator in Germany. The index, which appeared in 1988, takes into account the cost of 30 German companies that are leaders in various sectors of the economy: Deutsche Bank, Lufthansa, Commerzbank, Bayer AG, Allianz, Siemens, Deutsche Telekom, BASF and others.
Dow Jones (DJIA)
There is probably no person in the world who has not heard of this index. For the first time, the Dow Jones indicator was used more than a century ago. The number of companies whose shares were taken into account for the value of this exchange indicator has changed several times over time. At first, in 1896, there were 13, in 1916 - 25, and from 1928 to the present, the Dow Jones Index is invariably based on the share price of 30 companies. In fact, it is equal to the arithmetic average value of the securities of these largest American corporations.
In addition to the main one, they also calculate the Dow Jones stock indices for certain sectors of the economy: DJ transport indicator (by the value of securities of 20 industry giants), DJ communal indicator (by the value of securities of 15 companies), and a composite index based on the value of 65 shares, and a number of other stock indices.
MICEX
It is a composite index of the Moscow Exchange of the same name, for the calculation of which the price of the most liquid securities of Russian companies is taken into account. The initial value of this indicator was calculated at the end of 1997 and taken as 100. The price of the ten most liquid shares is taken into account for determination.