Major indices explained
Containing some of the biggest companies regulated by UK company law, it is important to note that not all UK100 companies are based in the UK. The index is calculated in real-time and the prices are published second by second during open market hours. Sector-wise it is focused on energy, financial services, mining, pharmaceutical and oil & gas.
Also known as the DAX stock index, it contains the 40 top German companies based on market capitalization. The DAX is among the most traded indices around the world due to consistently higher volatility and higher daily ranges than other indices.
The SPX500, also known as the S&P 500, is without doubt the most widely known index in the world. It was created by the publishing firm Standard & Poor’s and includes the top 500 American companies. Due to its strong correlation with other markets, the S&P500 is a popular choice among traders.
- US 30
The US 30, or most commonly known as the Dow, is the most recognizable stock index in the world, tracking the stocks of 30 companies in nine core market sectors. A unique feature of this index is that it is a price-weighted average and its movements are used as an indicator to gauge risk sentiment around the world.
The NASDAQ is an American index best known for representing the technology sector. Although it includes a number of other sectors too, names like Apple, Facebook and Google headline its constituents.
Also known as the Nikkei 225, this is the most popular index in the Tokyo Stock Exchange and a key indicator for the performance of the Japanese economy. Considering that Japan is an export-oriented economy, it is no wonder that Nikkei225 is highly correlated to the US stock markets.
AUS200, more commonly known as ASX200, is a stock market index that includes 200 of the biggest companies in Australia. It is a capitalization-weighted index, meaning company contributions to the index are based on its total market value.
FRA 40, also known as CAC, is the benchmark index of the French stock market. Considering that France is one the major economies in Europe, it is widely used to assess the health of Europe as a whole. Some of the most famous constituents include L’Oreal, AXA and Michelin.
ESTX50, or Euro Stoxx 50, consist of Europe’s 50 leading companies and is often referred to as the European Dow Jones. This is a market weighted index, with its constituents reviewed on an annual basis every September.