Main Global Equity Indexes
- 02:28
Learn about some of the critical metrics and data points that help investors navigate equity investments.
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Let's have a look at some of the principle equity indexes that serve as key performance indicators for global markets. Each index compiled and maintained by specific index providers is constructed with a methodology tailored to represent the markets segments accurately. Let us consider several significant indexes and their respective characteristics As outlined in the table.The S&P 500 consists of 500 companies listed on the New York Stock Exchange and or NASDAQ, and utilizes a market capitalization weighting approach. This index is a broad reflection of the overall equity market performance in the United States.
Similarly, the NASDAQ composite embraces a wider spectrum with over 3000 constituents listed on the NASDAQ. Also adopting market capitalization weighting. This index is particularly reflective of the technology sector's dynamism. In contrast, the Dow Jones Industrial Average, a price weighted index comprising 30 prominent companies offers a different perspective on the American market, focused on industrial giants moving across the Atlantic. The Euro Stoxx 50 with 50 major Eurozone players, and the DAX showcasing 40 major companies on the Frankfurt Stock Exchange, both employ market capitalization waiting. These indexes provide insight into the economic health of Europe's core industrial and technological sectors. France CAC 40, tracking 40 of the largest stocks on Euro next Paris and the UK's FTSE 100. Reflecting the performance of 100 companies on the London Stock Exchange further contribute to the European market picture in Asia. The Nikkei 225, representing 225 companies on the Tokyo Stock Exchange uses a price weighting method offering a distinct view of Japanese industry. The topics also in Tokyo is broader with approximately 2000 companies and uses market cap weighting to gauge the performance of the broader Japanese economy.
Lastly, the Hang Seng Index gives us visibility into the Hong Kong market providing a gateway to understanding market movements in the Asia Pacific region.