What are the major stock indices, and what do they measure?
Short answer
A stock index tracks the combined price of a group of shares as a single number. Well-known examples include the S&P 500, Nasdaq Composite, Nifty 50, Sensex, FTSE 100, Nikkei 225 and DAX.
Most relevant for: भारत (India), United States, United Kingdom, 日本 (Japan), Deutschland
What an index is
An index is a calculated number that follows a basket of shares, so a single figure summarises how a market or segment has moved. You cannot buy an index directly; funds and exchange-traded funds (ETFs) that track an index hold its shares, and derivatives can reference it.
Providers decide which shares enter the index and how each is weighted. Most are weighted by free-float market capitalisation. The Nikkei 225 is a price-weighted average, in which shares with higher prices have more influence.
The main indices
The table lists indices that appear often in Agyata news.
| Index | Country | What it tracks | Exchange |
|---|---|---|---|
| S&P 500 | United States | About 500 large US companies, chosen by a committee | NYSE and Nasdaq (constituents list there) |
| Nasdaq Composite | United States | Most common stocks listed on the Nasdaq market | Nasdaq |
| Nifty 50 | India | 50 large companies listed on the National Stock Exchange | NSE |
| Sensex | India | 30 large, established companies listed on BSE | BSE |
| FTSE 100 | United Kingdom | 100 of the largest companies listed in London | London Stock Exchange |
| Nikkei 225 | Japan | 225 large companies, price-weighted | Tokyo Stock Exchange |
| DAX | Germany | 40 large German companies | Frankfurt Stock Exchange |
Reading an index level
The level (for example, "the index is at 20,000") has no meaning by itself. What matters is the percentage change over a period. Price indices show only price changes; total return versions also include reinvested dividends. Indices differ in rules, so they should not be compared level-to-level.
Index change (%) = (level now - level before) / level before x 100