Sunday, October 12, 2008

What are Stock Market Indexes - First Looks for Everyday Folk like You and Me

A stock market index is a method of measuring a section of the stock market. Many indices are compiled by news or financial services firms and are used to benchmark the performance of portfolios such as mutual funds.

Stock market indices may be classed in many ways. A broad-base index represents the performance of a whole stock market — and by proxy, reflects investor sentiment on the state of the economy. The most regularly quoted market indexes are broad-base indexes comprised of the stocks of large companies listed on a nation's largest stock exchanges such as the British FTSE 100, the French CAC 40, the German DAX, the Japanese Nikkei 225, the American Dow Jones Industrial Average and S&P 500 Index, the Indian Sensex, the Australian All Ordinaries and the Hong Kong Hang Seng Index.

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