Stock Price Charts

how is a stock market index determined?

For example, S&P 500 (i know that it has 500 big companies), KSE-100 Index (Karachi Stock Exchange) And what do we mean by "points" by which the market goes down or up?

Public Comments

1. 1) Price-based indices are derived only from the stock price and a multiplier. 2) Capitalization-based indices are derived from the stock price and the total number of shares a company has outstanding combined with all of the other component stocks in the index.
2. A stock market index (plural indices) is a listing of stocks which have something in common and are traded on the same exchange. For example, the FTSE 100 is a list of the 100 largest companies (in terms of market capitalisation) which are traded on the London Stock Exchange. The price of an index reflects the average of the share prices of the companies which make up the index. If the share prices of the companies in an index go up or down, the value of the index itself can go up or down. Many indices are compiled by news or financial services firms and they are used to ‘gauge’ how the markets are performing. Other, regularly quoted indices are, the Dow Jones Industrial Average and S&P 500 in the US, the French CAC 40, the Japanese Nikkei 225 and the German DAX.