Stock index is a composite indicator that is used to evaluate the behavior of a group of shares and then evaluate against their background the progress of global processes taking place in the securities market. As a rule, the absolute value of the stock index is of no interest from the analytical point of view.
Each stock market uses its own stock indexes, which characterize the state of the stock market of the country. The value of stock indices is calculated on the basis of the value of shares of companies (in a certain proportion). At each trading platform it is customary to highlight only the most important, which most closely reflect the state of the stock market and the economy of their country. Main stock indices:
The value of the stock index is directly dependent on the prices of shares included in the calculation base of the index. Therefore, for example, a change in the value of the DJIA index in the direction of increasing indicates the strengthening of the US economy. Converse is also true, when the fall of the DJIA indicates recession of the US economy.
Stock index DJIA (Dow Jones Industrial Average) - one of the oldest and most famous stock indices. The index covers the 30 largest U.S. companies. For the first time the Dow Jones index was applied more than a hundred years ago. Of course, during this period of existence of the stock index changed and the number of shares on which it is calculated, and the names of enterprises whose shares were used initially. Moreover, of the companies that were decisive in the nineteenth century, today there are only a few.
The prefix "industrial" is a tribute to history — currently, many of the companies included in the index do not belong to this sector. Initially, the index was calculated as a simple arithmetic mean of the share prices of the covered companies. Now, for the calculation used scalable average-the sum of prices is divided into a divisor, which changes whenever included in the index shares are split (split) or consolidation (consolidation). This allows the index to remain comparable with the changes in the internal structure of its shares. The index was first published on 26 may 1896. At that time, the index was the arithmetic mean of the share prices of 12 American industrial companies.
Of the twelve companies, only General Electric is represented in today's version of the index. The first published index value was 40.94. In 1916, the number of companies was increased to 20, and in 1928 — to 30. On November 14, 1972, the index for the first time exceeded 1000 (1003.16). In the 80s and especially in the 90s there was a rapid growth of the index. 21 November 1995, he first leapt over 5000 (5023,55), and on 29 March 1999, left behind a 10,000 (10 006,78).
The largest percentage collapse of the index occurred on "black Monday" in 1987, when Dow Jones lost 22.6 %. One of the significant drawbacks of the Dow Jones index is the way it is calculated — when the index is calculated, more expensive shares affect it more. This leads to situations where a large percentage change in the price of a relatively cheap share can be offset by a small percentage change in the price of a more expensive share. In addition, covering only 30 shares, the Dow Jones index is poorly suited to the role of the index of the overall activity of the stock market. For objectivity, the s&p 500 index is sometimes used together with the Dow Jones index. The editorial office of the Wall Street Journal is engaged in compiling the list of companies included in the index.
(DAX is derived from it. Deutscher Aktienindex) - the most important stock index in Germany. The index is calculated as the average capitalization-weighted value of the share prices of the largest German joint stock companies (while capitalization is calculated only on the basis of shares in free float).
The index also accounts for dividend income on shares, assuming that dividends are reinvested in shares. Thus, the index reflects the total capital income.
DAX was created on July 1, 1988.
Calculated by Deutsche Börse AG.
The family of German stock indices DAX is represented by a number of different stock indices: the index of high-tech companies TecDAX, extended stock index blue chips HDAX, mid-index MDAX, the index of shares of the second fifty SDAX. The main stock index of Germany is considered to be DAX (FDAX).
This stock index, introduced in 1988, is calculated by the share price of thirty German companies recognized as leading in various sectors of the economy: BASF, Deutsche Telekom, Siemens, Allianz, Bayer AG, Commerzbank, Lufthansa, Deutsche Bank and others.
Nikkei-225 Stock Average is one of the most important stock indices in Japan. The index is calculated as the average weighted value of the share prices of 225 most actively traded companies of the first section of the Tokyo Stock Exchange. The index was first published on September 7, 1950 by the Tokyo stock exchange under the name "TSE Adjusted Stock Price Average". Since 1970, the index is calculated by the Japanese newspaper Nihon Keizai Shimbun. The new name of the index comes from the abbreviated name of the newspaper — Nikkei.
The list of companies covered by the Nikkei 225 index is revised at least once a year, in October.
The Tokyo Stock exchange family of stock indices got its name thanks to the newspaper, which for several decades has published these indices, which are considered the main stock indices of Japan: Nikkei 500 (Nikkei 500 Stock Average), Nikkei All Stock Index, Nikkei Stock Index 300.
The most well-known in the NASDAQ family of stock indices are the NASDAQ Composite and NASDAQ 100 stock indices. The NASDAQ stock exchange (National Association of Securities Dealers Automated Quotation), which along with the NYSE and AMEX to the main us stock exchanges, was founded in February 1971 and is focused on trading shares of companies engaged in the field of high technologies (the introduction of biotechnology, electronics, computer equipment and equipment, the creation of telecommunications and software, etc.).) Today, more than 5,000 specialized companies ' shares are traded on this exchange – and almost all of them are used in the calculation of the NASDAQ Composite index.
NASDAQ-100 index reflects the largest issues of non-financial securities of the United States and other countries listed on the NASDAQ stock exchange on the basis of market capitalization. The index is calculated at the prices of 100 most liquid shares issued by companies in various sectors of the economy, including telecommunications, software, trade, biotechnology and others. The exceptions are financial companies, including investment banks. Initially, the main criterion for reaching the top of the index was the company's weight, expressed in us dollars - that is, market capitalization. But in December 1998, a "rebalancing" was carried out, in which the market capitalization of each company is already multiplied by a quarterly revised weight ratio. The NASDAQ-100 index is calculated from January 31, 1985 index Initial value was set to 250 points. On January 1, 1994, this initial value was reduced to 125 points by dividing the current index value by 2.
Stock indices of NASDAQ family are designed for reliable orientation in the situation of the American market of high technologies and help to adequately take into account the impact of political and economic events of the United States on the business related to the functioning of this market.
Industry stock indices of this family are also popular-such as NASDAQ Computer, NASDAQ Bank, NASDAQ Transportation, NASDAQ Biotechnology, NASDAQ Insurance, NASDAQ Telecommunications, NASDAQ other Finance, NASDAQ Industrial and others.
RTS, or the Russian Trading system (RTS), is a stock exchange founded in 1995 with the purpose of creating a centralized securities market of Russia on the basis of previously established regional stock markets.
The RTS family of stock indices (RTS) includes RTS, RTSI, S&p/RUX, Rux-Cbonds and S&P/RUX-OIL stock indices and is designed to assess the market capitalization of the largest companies of the Russian Federation. The exchange indices are calculated based on the amount of transactions on the index list bonds made during the main trading session of the MICEX Stock exchange (Moscow Interbank Currency Exchange).
This exchange index, which for special evidence was called "barometer of the American economy", traditionally calculates the rating Agency us Standard & Poor's, which is reflected in its official name. In the calculation of the weighted market value of stock exchange's S&P 500 index includes the stock price of five hundred us corporations traded on the new York stock exchange and the stock exchange National Association of Securities Dealers Automated Quotation (NASDAQ) - two major U.S. stock exchanges. To date, S&P 500 is recognized as the main indicator of the state of the stock market of high capitalization. They are known to account for almost 75% of the total capitalization of the US market. In order to enter the s&p 500 index's calculation base, the company must have a market capitalization of over $ 4 billion., as well as all companies of the calculation base of the American s&p indices, to meet the published standard & Poor's criteria.
The shares of all S&P 500 companies are traded on major us stock exchanges such as the new York stock exchange and the NASDAQ. The average weighted value of the share prices of these companies is the S&P 500 index. Capitalization is used as weights in the calculation of the index.
The SP500 competes in popularity with the industrial Dow Jones index and is deservedly called the barometer of the American economy. S&P 500 is not a simple list of the largest us companies. It does not include privately owned companies and companies whose shares are not sufficiently liquid. But, nevertheless, in drawing up the list, the authors try to present the most complete various sectors of the American economy.
The family of market-weighted Russell stock indices is published by Frank Russell Company (Frank Russell company in Tacoma, Washington). Stock index Russell 1000 is a good correlation between the stock index S&P500 stock index, the Russell 2000 has the confidence as a criterion of estimation of market prices of shares of small businesses among the most popular stock indexes include the Russell 3000.
Russell 2000-us stock index, which consists of 2000 shares of American companies, which are capitalized after the 1000 largest. The capitalization of these companies is approximately 8% of the total capitalization of the investment-accessible us stock market. This index was developed with a base value of 135.00 - 31 December, 1986.
Two indices based on the Russell 2000 index are based on stocks with a specialized growth rate. The Russell 2000 Value index contains securities that have a low growth rate. Shares of such companies usually have a low ratio (multiplicity) of prices and book value and prices and profits, high dividend income and low projected growth rates.
The Russell 2000 Growth index contains those securities that have growth rates above average and usually a high ratio (multiplicity) of price and book value and price and earnings per share.
The Russell 2000 index is the most well-known and most cited indicator of the us stock market for low capitalization companies. The calculation base of this index includes the shares of 2000 companies, which are at the bottom of the list of 3000 largest public companies, whose shares are included in the quotation lists of American exchanges.
Since 1999, the Russell 2000 each year showed more positive dynamics of growth than the S&P 500. Even in those years when the increase was negative, Russell 2000 declined less than the S&p 500.
Russell index is widely used by managers of investment companies for index funds and in the development of passive and active investment strategies. According to statistics, the assets of the funds are 2.5 trillion. USD. The investment managers who control these funds buy the shares according to the weight of the companies in the respective indices. An annual review of the index Russell 3000 touched on the largest joint stock companies in the US. Based on their market capitalization, the companies were ranked in the Russell 3000 index. A thousand of the largest companies were included in the Russell 1000 index. The remaining 2000 companies were included in the popular Russell 2000 index.
The FTSE 100 Index, called FTSE 100, FTSE, or, informally, the "footsie 100". It is jointly owned by the financial Times Agency and the London stock exchange – companies with the highest level of capitalization. Also at the investor level, it is considered a world index because the FTSE listing includes companies such as HSBC, BP, Vodafone and Unilever. The FTSE 100 (financial Times Stock Exchange Index) is calculated as the average weighted value of the stock prices of the 100 companies with the highest capitalization included in the LSE list.
The total capitalization of these companies is 80% of the exchange capitalization. The index is calculated by the financial Times Agency. It is considered one of the most influential stock indicators in Europe.
It began to pay off on January 3, 1984 at the level of 1000 points.
Companies whose shares are accounted for in the calculation of the FTSE 100 index must meet the conditions set by the FTSE Group:
- to enter the list of the London stock exchange;
- the value of shares the FTSE 100 should be expressed in pounds or euros;
- to pass a test on belonging to a particular state;
- shares the FTSE 100 should be in free circulation and be well liquid.
The FTSE 100 index includes 100 companies, although in fact the list consists of 101 companies, since the international gas concern Royal Dutch Shell acts with two classes of shares.
Straits Times Index (STI) is a listed index on the Singapore stock exchange based on the shares of 30 listed companies. It was established as a result of a major industry reclassification of listed companies on the Singapore stock exchange and began trading on August 31, 1998. Later, Straits Times represented 78% of the average daily trading volume during the 12-month period and 61.2% of the total market capitalization on the stock exchange.
The Kuala Lumpur composite index is a capitalization-weighted stock market index introduced in 1986.
The s&p/ASX 200 index represents the market of Australian stocks listed on the Australian securities exchange and selected by Standard & Poor's. It has a balanced market capitalization and is resistant to volatility. The index began trading on 31 March 2000. It gives investors the opportunity to trade in one of the largest markets when the us and European markets are closed.
Traded on the Shanghai stock exchange, the SSE 180 is a composite index (also known as Shanghai Composite). This is the most frequently used indicator reflecting the Shanghai stock exchange. The components of the composite index are shares on the Shanghai stock exchange. It reflects 180 shares of the largest companies on the stock exchange and includes shares of such companies as BANK of CHINA and AIR CHINA.
Representing a fast growing economy of India, the BSE Sensex or Bombay Stock Exchange Sensitive Index is a weighted average index composed of the 30 most actively traded on the Bombay stock exchange the shares of major companies representing different sectors of the market. These companies account for about one fifth of the BSE market capitalization. The index has grown more than 10 times since June 1990. The long-term dividends of the index are 18.6% per annum, which, taking into account the compensation for inflation, is 9% per year. The index includes stocks such as TATA MOTORS and HDFC BANK.
The Kuwait stock exchange is the national exchange of the state of Kuwait. Despite the fact that several joint-stock companies (such as NBK in 1952) existed in Kuwait prior to the creation of the KSE, in October 1962, a law was passed on the organization of the stock market. The Kuwait exchange is also among the largest exchanges in the Persian Gulf.
The stock market in Doha is the main one in Qatar. It was founded in 1997 and is located in the capital of Qatar Doha. The market currently has 43 listed companies.
The EGX 30 is an index of the Cairo and Alexandria stock exchanges in Egypt. It includes the 30 most actively traded shares in the Egyptian stock market. The index is weighted by their market capitalization. Indexing began on January 1, 1998 with a base level of 1000.
The index is weighted by market capitalization and is normalized by the number of shares in free float. The adjusted market capitalization of index-listed companies is the number of shares of the company multiplied by the closing price and the percentage of shares freely placed.
Saudi stock exchange (Saudi Stock Exchange) or Tadawul is the only exchange in Saudi Arabia. The exchange is controlled by the state body for supervision of financial markets. The Tadawul All-Share Index (TASI) reached its highest value on 20 634.86 on 25 February 2006. It lists 115 publicly traded companies.
Muscat stock exchange Is the main exchange of Oman. It is located in Muscat and was founded in 1988. The main stock index at the MSM is the MSM-30. The MSM-30 index (also known as Muscat Securities Market Index) was created in 1992.
The index consists of the following sectors:
Banks and investment sector: 69 companies;
Industrial sector: 89 companies;
Service (s): 61 company.
The index includes stocks of banks and BANK DHOFAR NATIONAL BANK OF OMAN.
The HIS index first appeared on November 4, 1969, and is currently compiled and controlled by HSI Services Limited. It is a branch of Bank Hang Seng Bank, the largest Bank by market capitalization, registered in Hong Kong. He is responsible for compiling, publishing and managing the Hang Seng Index.
Dubai financial market (UAE) is a stock exchange founded on March 26, 2000. Of the approximately 57 listed companies, most are in the UAE, and some are in other countries in the region.
The index includes stocks such as DUBAI ISLAMIC BANK and the EMIRATES TELECOMUNICATION COMPANY.
The Istanbul Stock Exchange (ISE) is the only company in Turkey engaged in the exchange of securities. It provides opportunities for trading capital, bonds, government securities, various certificates and foreign securities. ISE is home to 320 national companies. Trading hours of the exchange on working days: 9: 30-12:00 (first session), 14:00-17: 00 (second session). All ISE members are incorporated banks and brokerage houses.
A capitalization-weighted index developed by S&P and Borsa Italiana. The index reflects the characteristics of the main Italian stock market. Free float shares are used to calculate the index. At the moment it includes shares of 40 companies. The index was developed with a base value of 10,000 as at 31 December 1997. The index is weakly technical, as it has low liquidity. On the other hand, it allows you to earn some lag relative to other stock exchanges.
This tool shows a strong correlation, primarily with the German DAX. Despite the fact that the country produces many crops, it has no clear correlation with one of them; the closest correlates are orange juice.
SWISS MARKET INDEX (SMI) - the blue-chip index of the Swiss stock exchange SWX Swiss Exchange. It represents about 85% of the market capitalization of the Swiss stock market. SMI is the most important stock index in Switzerland. The index is calculated as the average capitalization-weighted value of the share prices of the 20 largest and most liquid joint stock companies in Switzerland and Liechtenstein. The index does not take into account dividend income on shares. The list of companies included in it is reviewed annually in September. Their rating is reviewed quarterly based on trading volume and market capitalization.
The FTSE/JSE Top40 Index (South Africa) is a capitalization-weighted index. This index combines 40 of the largest market capitalization companies from the FTSE/JSE all Shares Index of the Johannesburg Stock Exchange.
The index was developed with a base value of 10399.53 as at 21 June 2002.
The Budapest Stock Exchange Index (BUX) (Hungary) is a capitalization - weighted average and free-float adjusted index. It reflects changes in the prices of actively traded shares of large companies on the Budapest Stock Exchange. These shares represent 58% of the capitalization of the domestic stock market in Hungary.
The index was developed with a base value of 1,000 as of 2 January 1991.
PRAGUE STOCK EXCH INDEX (px) (Czech Republic) - the official index of the Prague Stock Exchange. This index was first calculated on 20 March 2006 and replaced the indices PX50 and PX-D. Its historical values included the value of the index PX50. PX is a price index, its calculation does not take into account dividend income. Its base value is 1,000 points as of 5 April 1994.
WIG INDEX (Poland) is an index of total return, including dividends and pre - emption rights. The index includes shares of all companies traded on the Warsaw Stock Exchange, with the exception of foreign companies and investment funds.
The index was developed with a base value of 1,000 as of 16 April 1991.
Athens Stock Exchange General Index (ASE) (Greece) is a capitalization - weighted index of Greek shares traded on the Athens Stock Exchange. This index was developed with a base value of 100 as at 31 December 1980.
Austrian Traded ATX Index (Austria) is a capitalization - weighted index of the most actively traded shares on the Vienna Stock Exchange. Free float shares are used to calculate the index.
The index was developed with a base value of 1,000 as of 2 January 1991.
OMX Stockholm 30 Index (Sweden) is a capitalization - weighted index of 30 shares with the highest trading volume on the Stockholm Stock Exchange. Free float shares are used to calculate the index.
This index was developed with a base value of 125 as of 30 September 1986. On 27 April 1998, the value of the index was divided by 4.
The OBX Index (Norway) is a capitalization-weighted stock index of the 25 largest companies listed on the stock exchange the Oslo Stock Exchange. Free float shares are used to calculate the index. Since 21 April 2006, the index has become an index of total income and its value has been divided by 4.
OMX Helsinki 25 (Finland) is a capitalization - weighted index that includes the 25 most traded shares from the main list of the Helsinki Stock Exchange. The index is used as the main criterion of the Finnish market. The index takes into account the factors of free circulation, and the weight of each company is limited to 10%.
OMX Copenhagen 20 index (Denmark) includes the 20 most actively traded shares on the Copenhagen Stock Exchange. The composition of the OMXC20 index is reviewed twice a year. This is a market-weighted index.
This index was developed with a base value of 100 as of 3 July 1989.
EL 20 Index (Belgium) is a modified capitalization-weighted index of the 20 most capitalized and liquid Belgian shares traded on the Brussels Stock Exchange. Free float shares are used to calculate the index.
The index was developed with a base value of 1,000 as of 1 January 1991.
AEX-Index (Netherlands) - market capitalization-weighted index of the Netherlands ' major shares traded on the Amsterdam Exchange, adjusted for the shares in free float. The index is adjusted to the fixed rate of the Dutch Guilder. The old value at 31.12.98 was 1186.38, after the recalculation at the beginning of trading 04.01.99 the new value of the index was at the level of 538.36.
ISEQ Overall Index (Ireland) - capitalization-weighted index of the entire stock list presented on the Irish stock exchange the Irish Stock Exchange, with the exception of companies registered in the UK.
The index was developed with a base value of 1,000 as of 4 January 1988.
Portugal PSI-20 (Portugal) is a capitalization - weighted index of 20 major shares listed on the Portuguese stock exchange Lisbon Stock Exchange. Free float shares are used to calculate the index.
The index was developed with a base value of 3,000 as at 31 December 1992.
IBEX 35 (Spain) - official index of the Spanish stock market the Spanish Continuous Market (SIBE). It is made up of the 35 most liquid shares traded in this market. The index is calculated, controlled and published by Sociedad de Bolsas. Free float shares are used to calculate the index.
Argentina Merval Index (Argentina) is a weighted index that reflects the market value of a portfolio of shares traded on the Argentine Buenos Aires Stock Exchange. The portfolio is prepared in accordance with the market value of shares and trading volumes.
This index was developed with a base value of 0.01 as at 30 June 1986. The index is revised every 3 months, taking into account the volume of trade for the last 6 months.
Mexican Bolsa Index is the largest stock index in Mexico.
Also, this index is called the IPC (Indice de Precios y Cotizaciones). It displays the capitalization-weighted average prices of the main shares traded on the Mexican Stock Exchange.
This index was developed with a base value of 0.78 as of 30 October 1978.
S&P/TSX Composite Index is the largest stock index in Canada.
The shares included in this index represent 71% of the market capitalization of all Canadian companies listed on the Toronto Stock Exchange.
The index was developed with a base level of 1000 as of 1975.
The index is a conditional abstract figure. In the index, its dynamics is important: growth or decline indicates the overall economic climate in the region, the development of business or its degradation.
Investing in indices has a number of advantages over investing in ordinary securities.