Fundamentals of an index – Economic Times- About: Stock Trading News
How an index is made up and what it indicates The stock market index has always been the investor’s best guide. If the Sensex goes down, it indicates that the stock price of most of the major stocks on the BSE have gone down. There are index for the metal stocks, FMCG stocks, automobile stocks etc. The level of index at any point of time reflects the free-float market value of 30 component stocks relative to a base period. This market capitalisation is further multiplied by the free-float factor to determine the free-float market capitalisation. This is because most stock indices only reflect a portion of the actual market and not the market as a whole. read more
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