Stock indexes and the global financial set-up

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Stock indexes and the global financial set-up

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Abstract

A place for exchange was initiated at the Great Pond in Paris, under the leadership of Louis VII. In the year 1540, the first organized commodity exchange came into existence. An index is a statistical measure. It can provide an overall trend of market development and facilitates a comparison between different stock markets. It also brings the total value of the securities of several companies. Its calculation is based on the average prices of sample of values, selected on the basis of their representativeness.

Most stock indexes are calculated by summing the market capitalization of the component companies and then dividing the sum by a constant, so that the value of the index is a relatively small number.

Introduction
Stock index
1. An overview
2. Calculation of an index
3. The functions of the stock index
The different levels of spatial indices
1. Global
2. Continental
3. National
The major French stock index
Major international stock index
1. Dow Jones
Conclusion

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[...] They must be analyzed separately by watching the wide regional variations, the stock market and the economic changes of the whole of Asia (Korea, Singapore, etc.) The major French stock index: The CAC 40 is a French stock market index. It is one of the main national indices of Euronext. Its base value of 1000 points was set on 31 December 1987 and the CAC 40 officially came into existence on 15 June 1988. It was created after the 1987 financial crash, which amended the monopoly of trades. [...]

[...] The Dow Jones became a benchmark for the first global financial market, the New York Stock Exchange. This index is the property of Dow Jones & Company, which also publishes The Wall Street Journal. It is spoken of as Dow Jones, but its real name is the Dow Jones Industrial Average (DJIA), since it essentially reflects the industrial sector. It consists of 30 stocks of highly capitalized companies in the U.S., have companies in the index have changed over a period of time. [...]

[...] This ensures that the stock values do not have an adverse effect on the index. The Dow Jones Industrial Average is the most famous example of a price-weighted index. The formula for the calculation is Stock Market Value = Price of Shares*Number of Shares outstanding*free float Factor*Exchange Rate (if applicable)*Adjustment Factor Yet another way of classification and calculation of Indices is by basing the index value on the fundamental data than having market capitalization as the base. These are similar to Style Indices or Attribute Weighted Indices. [...]

[...] For some time, the index was calculated every hour and was then computerized in 1963. In parallel, another Dow Jones was created which included DJTA (Dow Jones Transportation Average), which is an index of transportation and the Dow Jones Utility Average (DJUA), a representative of the energy sector. An investor cannot ignore Dow Jones. It often sets the tone for other financial centers. The curve has been constantly growing since the creation of the DJIA, but we also have to note the 1929 financial crash. [...]

[...] These include: The BBC Global 30, which was established by the American television channel and was based on economic information of the largest companies in three continents (Europe, Asia, America). The MSCI World Index and Emerging Markets Index represents the performance of stock markets in 23 economically developed countries and those of 26 emerging economies. The S & P Global 1200 stock market index covers 31 countries and 70% of world market capitalization. It is constructed from the S & P indices. [...]

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