What is the Index?
Potential investors who want to invest in indices in Forex markets often ask the questions “what is the index”, “what are the main indices” and “why are the indices invested?
To define the index, the indicators that measure the proportional change in the values / prices, costs and sales performances of the investment instruments traded in the stock exchange within a certain period of time are called indexes.
Dow Jones, Nasdaq, S & P500, Ftse and Xetra Dax are the most active stock market indices in the world in terms of trading volume. In Turkey, the Istanbul Stock Exchange index has more than under the roof. Index types with the most transactions in Borsa Istanbul; BIST 100 index, BIST 30 index and BIST Banking index.
What Are the Important Indices?
As an example of local markets, we can show the BIST 100 index, which consists of the top 100 shares traded on Borsa Istanbul. More than 50 indices such as BSIT 50, BIST 30, BIST service and BIST Banking are traded within Borsa İstanbul. There are also DIBS indices as bond and bill indices.
The main indices traded in global markets include DOW JONES 30, FTSE 100, DAX 40, S&P 500, CAC 40, NASDAQ, TecDax, Merval, DJ Euro Stoxx 50, XetraDax, NYSE, Hang Seng, BSE 30, Bovespa.
Let’s open up some of the major indices followed by investors in the world markets.
FTSE 100 index The
FTSE 100 Index consists of the shares of the top 100 companies with the highest volume traded on the London Stock Exchange, the world’s fourth largest stock exchange.
New York Stock Exchange Indices
There are more than one popular indices from the New York Stock Exchange (NYSE), one of the world’s largest stock exchanges. Some of these can be listed as follows;
The Dow Jones Index
consists of the weighted average of 30 stocks with the highest market value, traded on the New York Stock Exchange and Nasdaq.
The Nasdaq Index includes more than 3000 domestic and international securities traded on the Nasdaq Stock Exchange.
The S&P 500 Index
consists of the stocks of 500 large capital companies, all in the USA.
Nikkei 225 Index The
Nikkei 225 index, which consists of 225 shares with the highest trading volume traded on the Tokyo Stock Exchange, is among the favorite investment instruments of investors.
How is the index calculated?
Stock market indices are calculated according to the weights of the shares in them. For example; Among the Dow Jones 30 indexes, there are 30 most active stocks. Some of these shares; Goldman Sachs, Microsoft, Pfizer, et al. The stocks in the index are revised periodically, removing or adding to the index is carried out.