STOCK MARKET INDICES

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STOCK MARKET INDICES
By Zaborovskaya
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INTRODUCTION



Stock Exchange?
STOCK EXCHANGE A stock exchange can be defined as
a centralized market for buying and selling
stocks where the price is determined through
supply-demand mechanism.
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Opening price Closing price
The highest price of the day The lowest price of
the day.
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STOCK MARKET INDEX
A stock market index is a method of measuring a
section of the stock market.
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STOCK MARKET INDICES
Level of prices and the trend of price movements
of the market. A stock market index act as the
indicator of the performance of the economy or a
sector of the economy.
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STOCK MARKET INDICES USEFULNESS

• Their functions
• Indices help to recognize broad trends in the
  market.
• The investor can use the indices to allocate
  the funds
• rationally among the stocks.
• Technical analysts use these indices to predict
  the future
• market.
• Indices function as a status report on the
  general
• economy.

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Dow Jones Industrial Average (DJIA)
 Formula for DJIA 
   
Where p are the prices of the component stocks
and d is the Dow Divisor.
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What is the 'Nikkei'
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What is the 'FTSE'
The index began on 3 January 1984 at the base
level of 1000 the highest closing value reached
to date is 7103.98, on 27 April 2015,  the
previous peak having been over 15 years
previously, on the last trading day of 1999,
during the dot-com bubble.  After falling during
the financial crisis of 2007-2010 to below 3500
in March 2009, the index recovered to a peak of
6091.33 on 8 February 2011,  fell under the
5000 mark on the morning of 23 September 2011,
but reached its record high on the market close
of 27 April 2015, more than doubling in value
from the crash in 2009.  It then went into a bear
market, closing at 5537 on 11 February 2016.
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