What is the Stock Market Index?

The Stock Market Indexes is the overall index that tracks and reflects the performance of various stock markets. In other words, a stock market index is a gauge of the performance of the whole market or sector of the market.

In other words, a stock market index or stock Indice is an index that evaluates the stock market or a subdivision of the stock market which also aids investors in comparing the current market price with a past price to determine the performance of the market.

Stock indexes are a composition of selected stocks that are designed to reflect the overall performance of the stocks in the market. Stock Markets Indexes are also being traded on regulated exchanges in the form of futures contracts and options.

A stock market index or stock index – is an index to measure the performance of the stock market or a subset of it. This facilitates investors to calculate market performance by comparing present price levels with the past price level. Market performance is evaluated from the selected stock price.

Note: All Stock market indexes compute their value differently and all index reflects the general and economic market conditions differently.

Who are the Major Stock Market Indexes?

There are a number of stock market indexes available. Nikkei 225, Dow Jones Industrial Average (DJIA), DAX Performance Index, Hang Seng Index, FTSE 100 Index, NASDAQ Composite, S&P 500 Index, Capitalization – Weighted Index, BSE SENSEX, Russell 2000 Index, VIX, NIFTY 50, Wilshire 5000, etc.

Dow Jones Industrial Average, S&P 500, and NASDAQ Composite are three major US Stock market Indexes. 

All of the stocks of the U.S include in Wilshire 5000 Index. 

Which Stock Market Index gives the best indicator?

Out of many stock market indexes, the list of the 3 best data reflector Stock market indexes are :

➤ S&P 500

➤ NASDAQ Composite

➤ Russell 3000

Out of all these 3 indexes, the Russell 3000 is the best indicator for computing the performance of the stock market. It includes almost twice as many stocks, combining the Russell 1000 index of large-cap or larger companies with a very well-known Russell 200 index of small-cap.