Index, or a stock index, is a composite indicator of prices of assets belonging to a particular group (securities, commodities, derivatives), a so-called stock basket.
As a rule, the readings of indices are not as important as the index changes with the course of time, because these changes provide insight into the general direction of the market movement, even in those cases when the shares inside the stock basket show mixed trading. Depending on the selected indicators, the stock index may reflect the behavior of a group of securities (or other assets) or the entire market (a market sector).
According to the data of Dow Jones & Co. Inc., there were 2,315 stock indices in the world as of the end of 2003.
At the end of a stock index name, there can be a figure, reflecting the number of shares, on the basis of which the index is calculated: CAC 40, Nikkei 225, S&P 500.
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