What are Stock Indices?

A market index is a hypothetical investment asset portfolio that represents a portion of each country's stock market and financial market. The calculation of the index value is based on the prices of underlying assets. Some indexes have values based on market capitalization, income weighting, variable weighting, and fundamental weighting. Weighting is the method of adjusting the individual impact of elements in an index.

What are Indices?

Indexes (also known as stock indexes) represent the value of a group of assets or stocks listed on a particular exchange. Major financial indexes include Dow Jones, NASDAQ, DAX30, S&P 500, ASX200, Hang Seng, China A 50, among others. Different indexes have their own criteria for determining the constituent stocks.

The Dow Jones 30 Index predominantly represents the publicly traded 30 largest companies on the New York Stock Exchange by price weighting, while the FTSE 100 represents the top 100 largest companies in the United Kingdom weighted by market capitalization.

At ENT Forex, we offer most major global indexes including AUS 200, HK 50, CHINA 50, and SINGIX. When the price of stocks traded in an index goes up, the value of the index also rises. Conversely, when the price of stocks traded in an index goes down, the value of the index goes down as well.