"China’s Shanghai Composite Index dropped 0.7 percent, while Japan’s Nikkei 225 Stock Average fell 1.4 percent. Hong Kong’s Hang Seng Index declined 1.3 percent."
I got this quote off bloomberg.com So what does it mean when lets say Nikkei 225 Stock Average fell 1.4%? Does that mean the value of the whole Stock Exchance has lost 1.4% of its value? Can u explain me in greater detail? Thanks.
That was too much of "greater detail"…i did not make anything out of it, it went over my head….
An index ( in this case…China’s Shanghai Composite Index, Japan’s Nikkei 225, Hong Kong’s Hang Seng Index….and various others like Dow Jones, S&P 500) is a benchmark of the top 50 or 100 or 500 companies in the country. Every exchange has its own index, so basically the value or decline or rise is determined by the overall movement of the companies which are a part of the index. For more details on the weightage and what companies are a part of the index, you need to refer to their respective websites.
So coming back to your question, on any normal day, lets say for an example on the Hang Seng (lets say it has 10 top companies which form the index )…. 6 companies ended lower during the session and 4 ended up higher…..the cumulative figure would reflect the decline in the index’s value… like what you got up there..fell 1.4 percent or has risen 3 percent and so on….
and you know what, googling helps!!!
And I hope i was of help!
Sam
Those are indexes, not the exchanges.
Indexes are a group of stocks based on what they are used for. Many indexes can be bought from the people that made the indexes. For instance you can buy an index of the SP 500 from Standard and Poor. In the U.S. the DOW is an index that was originally created to give a quick snap shot of the New York Stock Exchange before electronic calculators and computers were invented. If the DOW was up, most likely the majority of stocks were up in the NYSE.
The SP 500 is a value index which tracks the 500 largest companies on the New York Stock Exchange. A value stock is based on a company that is so large, it is least likely to fail compared to smaller stocks. They are also so big, that they don’t grow fast compared to their size. A few mIllion dollar doesn’t make much of a dent in a multi billion dollar company.
So these indexes are being used as consistent indexes to track a performance over time. These indexes are probably the oldest and most commonly used indexes (just like the SP 500 is used in the U.S. as a benchmark for mutual funds) and so are used as consistency benchmarks that may track decades of performance and kind of give a glimpse of the markets in those countries as a whole over a long period of time.
References :
That was too much of "greater detail"…i did not make anything out of it, it went over my head….
An index ( in this case…China’s Shanghai Composite Index, Japan’s Nikkei 225, Hong Kong’s Hang Seng Index….and various others like Dow Jones, S&P 500) is a benchmark of the top 50 or 100 or 500 companies in the country. Every exchange has its own index, so basically the value or decline or rise is determined by the overall movement of the companies which are a part of the index. For more details on the weightage and what companies are a part of the index, you need to refer to their respective websites.
So coming back to your question, on any normal day, lets say for an example on the Hang Seng (lets say it has 10 top companies which form the index )…. 6 companies ended lower during the session and 4 ended up higher…..the cumulative figure would reflect the decline in the index’s value… like what you got up there..fell 1.4 percent or has risen 3 percent and so on….
and you know what, googling helps!!!
And I hope i was of help!
Sam
References :
Nikkei 225 is the top 225 companies on the exchange.Out of the 225 the majority of them went down in value.So for the trading day the over all stocks value of the Nikkei 225 was down 1.4%.
References :
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