Indices are a hypothetical portfolio of Stocks made of multiple shares within a particular sector of the financial markets. Indices provide an indication of the strength and direction of a sector of the market, and are useful to speculate on global financial markets.
These well-known Indices are essentially baskets of individual Shares which are often ranked by independent institutions like major banks or specialist companies like Standard & Poor’s, the FTSE Group and Deutsche Börse.
Some of the biggest Indices markets in the world have long, distinguished histories.
Indices price movements and volatility are impacted by factors like political events, major factors which affect companies in a particular sector, economic data like employment figures and big changes in the currencies markets.
It is worth bearing in mind too that major shifts in the fortune of a single big company which is part of a wider index can disproportionately impact on its performance.
Global Indices markets are dominated by what are sometimes referred to as “benchmark Indices,” these are the stock Indices which have an outsize impact on economies and are generally held as reliable indicators of the economic health of a particular country or area.
List of the most heavily traded Global Indices markets include:
FTSE 100 – Sometimes called the ‘UK 100,’ this represents the UK’s hundred biggest companies by market capital
Dow Jones – Often referred to as simply ‘Wall Street’ this comprises 30 of the US’ biggest publicly owned companies
The DAX – Referred to as the ‘Germany 30,’ this index is made up of 30 major German companies
NASDAQ 100 –The ‘US Tech 100,’ is a capitalization-weighted index made up of over 100 tech companies in the US
Nikkei 225 – Japan’s biggest price-weighted index is comprised of 225 of the country’s biggest companies
CAC 40 – Simply referred to as the France 40 this comprises 40 of France’s biggest companies by capitalization
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