What Is the Stock Market?
The origins of the stock market can be traced back to the 17th century when the first stock exchange was established in Amsterdam, Netherlands, in 1602.
This exchange was created to trade shares in the Dutch East India Company, one of the largest and most successful trading companies of the time.
Over time, other countries established their stock exchanges, including London in 1773 and New York in 1792. These exchanges handed a platform for investors to buy and vend shares of intimately traded companies, enabling them to partake in the gains and growth of those companies.
Moment, stock markets live worldwide and are vital to global frugality. They allow companies to raise capital for investment and growth while furnishing individualities and institutions with a means of investing their plutocrat and structuring wealth over time.
The stock market is a platform where intimately traded companies issue and vend shares of their power to the public, allowing investors to buy and vend those shares. These shares represent a portion of the company’s power and give investors the right to bounce on certain company matters and admit a part of the company’s gains in the form of tips.
The stock market is a way for companies to raise capital to fund their operations and growth and for investors to benefit from the success of those companies.
The value of a company’s stock is determined by force and demand in the request, as well as factors similar to the company’s fiscal performance, assiduity trends, and profitable conditions.
What Is the Stock Index?
A stock index, also known as a stock market index, measures the performance of a group of publicly traded companies in a particular stock market.
It is typically calculated based on the weighted average of the prices or market capitalizations of the constituent stocks.
Stock indices track the performance of a specific market, sector, or industry. They are often used as benchmarks for evaluating the performance of investment portfolios or mutual funds.
Some of the most well-known stock indices include the S&P 500, the Dow Jones Industrial Average, the NASDAQ Composite in the United States, the FTSE 100 in the United Kingdom, the Nikkei 225 in Japan, and the Shanghai Composite in China.
Various factors, including economic conditions, political events, and company performance, can influence changes in the value of a stock index. As a result, stock indices are closely monitored by investors and traders as indicators of market trends and sentiment.
Famous Stock Markets in the World.
There are hundreds of stock exchanges worldwide, the most notorious of which include the New York Stock Exchange, the Tokyo Stock Exchange, the London Stock Exchange, etc. These are the real lords of the stock market.
Of course, there are well- known stock exchanges in France, Germany, India, South Korea, Hong Kong, and Taiwan. Each exchange has its representative stock indicator, similar as the three majorU.S. stock indicators, the three major European stock indicators, the Nikkei 225 stock indicator,etc.
Dow Jones
The Dow Jones Index is a collective name for a series of indexes, but it usually refers to the Dow Jones Industrial Average. The Dow Jones Industrial Average is calculated based on the weighted average of 30 reliable and significant blue-chip U.S. stocks.
These 30 stocks come from different fields, currently including American Express, Disney, Visa, 3M, Apple, Microsoft, Intel, IBM, Cisco, Verizon, ExxonMobil, Chevron, DowDuPont, Home Depot, Walmart, Nike, Procter & Gamble, Johnson & Johnson, Boeing, Caterpillar, Coca-Cola, McDonald’s, Pfizer, Merck, Goldman Sachs, JPMorgan Chase, Travelers Insurance, UnitedHealth, United Technologies, Walgreens Boots Associates.
S&P 500 Index
The Standard & Poor’s Index is a stock price index compiled by Standard & Poor’s, the largest securities research institution in the United States. Initially, 230 stocks were selected, and two stock price indexes were compiled. Beginning on July 1, 1976, it was changed to 400 industrial stocks, 20 transportation stocks, 40 utility stocks, and 40 financial stocks. Over the decades, although there have been stock changes, it has always remained at 500.
Covering the most popular and most owned U.S. stocks, the S&P 500 is well represented.
To be included in the index, several criteria must be met: U.S. companies with a market capitalization of at least $5.3 billion; the public holds 50% of the shares; shares above $1; and four consecutive quarters of positive earnings.
Nasdaq Index
The Nasdaq index is usually called the Nasdaq Composite Index, calculated based on the common stocks of all domestic and foreign listed companies listed on the NASDAQ market. A representative example of this is the Nasdaq 100 Index.
The Nasdaq 100 Index is the main index of Nasdaq. Its 100 constituent stocks all have the characteristics of high technology, high growth, and non-financial, which are representative of American technology stocks. It is worth mentioning that in the Nasdaq 100 Index, the excellent performance of these high-growth stocks is brought about by their respective endogenous high growth, incredibly innovative businesses rather than extensional growth such as asset injection.
Judging from the top ten weighted constituents of the Nasdaq 100 Index, they are mainly high-tech companies, most of which are in the computer industry. ), Cisco (Cisco), Intel (Intel), and many other well-known companies.
Russell 2000 Index
The three major stock indices of the US stock market are the Dow Jones Index, the S&P 500 Index and the Nasdaq Index.
There is also the Russell 2000 Index, which tracks small caps. The Russell 2000 Index is a market capitalization index representing small and mid-cap stocks. At just $810 billion, it’s less than a tenth the size of the S&P 500.
FTSE 100
The UK FTSE 100 Index (FTSE 100) is compiled by FTSE (FTSE Group), a world-class index calculation financial institution. Since 1984, it has covered the top 100 listed stocks traded on the London Stock Exchange with market capitalization.
One of the most popular financial products for investors in the world, together with France’s CAC-40 index and Germany’s Frankfurt index, it is also known as the three major stock indexes in Europe. It is one of the most critical indicators for global investors to observe the trend of European stocks.
This index covers about 80% of the market value of the London Stock Exchange, which is representative to a certain extent and is an important measure to reflect changes in the stock market in the London stock market; in addition, because it uses the automatic quotation computer system of the London stock market, it can obtain stock market prices at any time, and calculated in real-time, so it can quickly reflect every change in the stock market, and has been widely valued since it was announced; third, it is a comprehensive actuarial stock index. The statistical scope and coverage are broad, which can reflect the overall stock market situation more comprehensively.
FTSE China A50 Index
FTSE China A50 Index is a real-time tradable index launched by FTSE Index Co., Ltd. (now named FTSE Russell Index), one of the four major index companies in the world, to meet the needs of Chinese domestic investors and qualified foreign institutional investors.
The FTSE China A50 Index is a real-time tradable index of the top 50 A-share companies in Shanghai and Shenzhen stock exchanges by market capitalization. Its total market capitalization accounts for 33% of the total market capitalization of A-shares.
A benchmark for the Mainland A-share market and the flagship index of the FTSE China Index Series.
It is worth mentioning that the trading hours of the FTSE China A50 Index futures traded on the Singapore Exchange are from 9:00 am to 4:30 pm, and there is also evening trading from 5:00 pm to 4:45 am the next day.
That is to say; after the A-share market closes, the FTSE China A50 Index futures are still trading. The trading changes during this period can reflect the sentiment of investors and the trend of A-shares the next day. Trend vane. So even after the A-share market closes/before the market opens, you can pay attention to the trading situation and real-time market changes of FTSE China A50 Index Futures and grasp the trend of A-shares!
Hong Kong Hang Seng Index
The Hang Seng Index, compiled by Hang Seng Index Services Co., Ltd., a wholly-owned subsidiary of Hang Seng Bank of Hong Kong, is a weighted average stock price index based on 50 listed stocks in the Hong Kong stock market constituent stocks and its issuance as the weight. A stock index that has the most influence on the stock price trend.
The constituent stocks of the Hang Seng Index have broad market representation, and their total market value accounts for about 90% of the total market capitalization of the Hong Kong Stock Exchange.
To further reflect the price trend of various stocks in the market, the Hang Seng Index published four sub-indices in 1985. It included 33 constituent stocks into the four sub-indices of industry and commerce, finance, real estate, and public utilities.
Nikkei
The Nikkei Stock Average is a stock index that represents Japan. It is a barometer showing whether Japanese stocks and capital markets are doing well or not. It is also a factor that reflects the appreciation of the yen. impact.
The yen is currently the currency of seven major developed countries and one of the most actively traded currencies in the foreign exchange market. Fluctuations in the Nikkei Stock Average may have a greater impact. The Nikkei stock average has a long period, so it is easy to compare. It is the most widely used and reliable indicator for studying the long-term development and recent changes in stock prices on the Japanese stock exchange. The Nikkei Stock Average quoted daily by the media refers to the Nikkei 225 Index.
The Nikkei 225 Index is based on the prices of the 225 stocks with the most active trading volumes and the highest market liquidity. Stocks selected for the Nikkei 225 Index account for only 20% of the stocks listed on the First Section of the Tokyo Stock Exchange, but stock indices account for about 60% of the First Section trading volume and about 50% of the market capitalization. occupies. The industry classification specifically selects highly liquid stocks such as technology, financials, transportation, government, industrials, consumer goods, and materials.
The company’s stake includes now-famous companies such as Panasonic Electric Works, Nissan Motor, Toyota Motor, Nomura Securities, Shiseido, and Kao.
The Japanese stock market also opens at 9am, but be aware of the following:
At midnight in this region, Japan time is earlier than Beijing time, so the opening time in Japan is one hour earlier than in China. Usually, when global macroeconomics and macropolitics suddenly emerge, trends in the Japanese stock market serve as a reference for the Chinese stock market. There are many. – The stock market will be opened.
KOSPI
The Korea Composite Stock Price Index (KOSPI) is a stock index of the Korea Exchange. The Korea Composite Stock Price Index is calculated from all stock prices traded on the exchange.
January 4, 1980, is used as the index’s benchmark starting date, and the stock market’s opening price on that day is used as the benchmark of 100 points. The unit is calculated as won, and the highest and lowest are based on the extreme values in the transaction.
The KOSPI has more than 780 constituent stocks. It is worth noting that South Korea opened an hour earlier than China. When the global macro economy and macro policy emerge suddenly, the trend of the Korean stock market can also be used as a reference for the Chinese stock market.
India SENSEX Index
India’s SENSEX Index( also known as the Bombay Sensitive 30 Index, BSE SENSEX) is the most extensively used in India. It’s a representative indicator of arising requests and an essential reference indicator for investing in India.
The Bombay Stock Exchange issues it. Established in 1875, the Bombay Stock Exchange is the oldest in Asia. As the second largest request in India, the Bombay Stock Exchange ranked fifth in the world in terms of trading volume in 2005.
In 1995, the Bombay Stock Exchange realized all stock deals online and computer- operated. further than 6,000 companies are listed on the Bombay Stock Exchange, and 2,500 companies are laboriously trading, making the Bombay Stock Exchange the gateway to the Indian capital request.
Since the “ Indian stock market ” mentioned by colorful media refers to the Bombay Stock Exchange, the SENSEX30 indicator of the exchange has nearly come synonymous with the Indian stock request.
France CAC40 Index
The Paris Stock Exchange ranks fourth after New York, Tokyo, and London among the major exchanges in the world.
The most important stock market indicator in France is the CAC40 indicator. The French CAC40 indicator consists of 40 French stocks. They’re collected by the Paris Stock Exchange with the stock prices of its top 40 listed companies. The indicator has been published since June 5, 1988, and reflects price oscillations in the French stock request.
Germany DAX30 Index
The German DAX index is an important stock index in Germany. It is a blue-chip stock index launched by Deutsche Börse Group. The German DAX30, like the US S&P 500, the French CAC4 stock index, and the London Financial Times 100 stock index, is a stock price average index weighted by market capitalization. , rather than a simple average stock price average index.
Unlike other indices, the DAX30 seeks to reflect the total return of the German stock market, while others only reflect changes in market prices. The DAX 30 index considers dividend income, nominally reinvesting all dividend income (in proportion to constituent stocks) in equities. Even if German stock prices are unchanged, the DAX30 could still rise on dividend income. Futures and options contracts on the DAX30 index are traded on the European Futures and Options Exchange (EUREX).
Euro Stoxx 50 Index
The financial securities industry regards the Euro Stoxx 50 Index as an index reflecting the overall situation of the stock prices of large listed companies in the Eurozone. The constituent index stocks cover most industries, such as banking, public utilities, insurance, telecommunications, energy, technology, chemicals, industrial products, automobiles, food and beverage, medical care, and raw materials. Based on this index, various exchanges can develop financial derivative products such as exchange-traded funds (ETFs), futures, and options for investors.
The fluctuation of the European Stoxx 50 index directly affects the economic development and stability of the European Union and even the countries in West Asia and North Africa. Although the index will fluctuate due to the influence of the financial mechanism in the Eurozone and international hot money, the European Stoxx 50 Index maintains a strong growth momentum every year because the overall economy of the E.U. member states is still recovering.
Russia RTS Index
Russia’s two major stock indexes are the RTS and Moscow indexes. These two are essential indicators for many Russian, Eastern European, and emerging European funds.
They collect the stocks of the 50 largest listed companies on the Moscow Exchange and re-examine the index constituents every three months. Although the Moscow Index is Russia’s most extensive stock market index, since it is denominated in Russian rubles, international stock market transactions are still dominated by the RTSI index, denominated in U.S. dollars.
The RTS is the Russian trading system index, calculated on September 1, 1995. The index was established earlier, covers a broader range, and the selected companies are more representative, reflecting the market situation more accurately. Hence, analysts often cite it for daily and weekly market reviews.
Happy Stocks Journey!