4 – L1 02 Indices V2

What is an index? If you’re listening to financial news about the U.S. markets, you may hear about the S&P or the Dow. For news about Latin America, there is IBOVESPA or MERVAL. For markets in Asia, there’s the NIKKEI or HANG SENG, and in Europe, there’s the FTSE or EURO STOXX. These are all examples of indices. Indices are created by financial research, and credit rating companies such as Standard and Poor’s, Dow Jones and Financial Times. They’re also published by stock exchanges such as the Nasdaq or the London Stock Exchange. Indices can also be created by banks such as Hang Seng bank. Business news will often refer to whether the index went up or down. For instance, we may hear that the Dow went up by 200 points since yesterday. If the Dow was at 25,000 yesterday, that means it is now 25,200 points today. The 200-point increase, a bounce to an increase of about 0.8 percent. An index is a metric that represents the aggregated value of a group of stocks as a single number. Note that you can refer to more than one index as indexes or indices.

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