What does a stock market index stand for?

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I know that a stock market index (like S&P, NIKKEI, etc.) is computed from the prices of selected stocks, but I was wondering why the name of the currency is almost never expressed. For example, if the S&P price is 2927 points I assume those are dollars, but how about NIKKEI? Is its price is expressed in yen? Is DAX expressed in euro? Is there a standard in financial community?

stock-market price-index

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edited 1 hour ago

Kenny LJ

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up vote
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down vote

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I know that a stock market index (like S&P, NIKKEI, etc.) is computed from the prices of selected stocks, but I was wondering why the name of the currency is almost never expressed. For example, if the S&P price is 2927 points I assume those are dollars, but how about NIKKEI? Is its price is expressed in yen? Is DAX expressed in euro? Is there a standard in financial community?

stock-market price-index

share|improve this question

edited 1 hour ago

Kenny LJ

4,15011541

asked 11 hours ago

Tomas

112

New contributor

Tomas is a new contributor to this site. Take care in asking for clarification, commenting, and answering.
Check out our Code of Conduct.

add a comment | 

up vote
2
down vote

favorite

1

up vote
2
down vote

favorite

1

1

I know that a stock market index (like S&P, NIKKEI, etc.) is computed from the prices of selected stocks, but I was wondering why the name of the currency is almost never expressed. For example, if the S&P price is 2927 points I assume those are dollars, but how about NIKKEI? Is its price is expressed in yen? Is DAX expressed in euro? Is there a standard in financial community?

stock-market price-index

share|improve this question

edited 1 hour ago

Kenny LJ

4,15011541

asked 11 hours ago

Tomas

112

New contributor

Tomas is a new contributor to this site. Take care in asking for clarification, commenting, and answering.
Check out our Code of Conduct.

I know that a stock market index (like S&P, NIKKEI, etc.) is computed from the prices of selected stocks, but I was wondering why the name of the currency is almost never expressed. For example, if the S&P price is 2927 points I assume those are dollars, but how about NIKKEI? Is its price is expressed in yen? Is DAX expressed in euro? Is there a standard in financial community?

stock-market price-index

stock-market price-index

share|improve this question

edited 1 hour ago

Kenny LJ

4,15011541

asked 11 hours ago

Tomas

112

New contributor

Tomas is a new contributor to this site. Take care in asking for clarification, commenting, and answering.
Check out our Code of Conduct.

share|improve this question

edited 1 hour ago

Kenny LJ

4,15011541

asked 11 hours ago

Tomas

112

New contributor

Tomas is a new contributor to this site. Take care in asking for clarification, commenting, and answering.
Check out our Code of Conduct.

share|improve this question

share|improve this question

edited 1 hour ago

Kenny LJ

4,15011541

edited 1 hour ago

Kenny LJ

4,15011541

edited 1 hour ago

Kenny LJ

4,15011541

4,15011541

asked 11 hours ago

Tomas

112

New contributor

Tomas is a new contributor to this site. Take care in asking for clarification, commenting, and answering.
Check out our Code of Conduct.

asked 11 hours ago

Tomas

112

asked 11 hours ago

Tomas

112

112

New contributor

Tomas is a new contributor to this site. Take care in asking for clarification, commenting, and answering.
Check out our Code of Conduct.

New contributor

Tomas is a new contributor to this site. Take care in asking for clarification, commenting, and answering.
Check out our Code of Conduct.

Tomas is a new contributor to this site. Take care in asking for clarification, commenting, and answering.
Check out our Code of Conduct.

add a comment | 

add a comment | 

1 Answer
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Indexes don't have units. They're indexes.

An index is a ratio of two numbers. The two numbers have the same dimension. So their ratio is unit-less.

The compilers of each stock market index set a denominator which represents a base set of conditions, and they then may adjust that denominator to ensure that events that change market cap, but which should not change the index, do not change the index. The sum of the market capitalisations of all of the index members forms the numerator.

For more, see https://www.investopedia.com/ask/answers/040215/what-does-sp-500-index-measure-and-how-it-calculated.asp

Stock market indices are still exposed to currency variations, because the denominator is not adjusted for currency variations, and the numerator is exposed to them: the index members' market caps are all in the same currency, and their profitability will almost always have some exposure to the currency too.

The one freak in all this is the Dow Jones Industrial Average, which doesn't behave like other indexes (it's a straight price average, not weighted by market cap), and should, broadly speaking, just be ignored.

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answered 2 hours ago

EnergyNumbers

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1 Answer
1

active

oldest

votes

1 Answer
1

active

oldest

votes

active

oldest

votes

active

oldest

votes

up vote
6
down vote

Indexes don't have units. They're indexes.

An index is a ratio of two numbers. The two numbers have the same dimension. So their ratio is unit-less.

The compilers of each stock market index set a denominator which represents a base set of conditions, and they then may adjust that denominator to ensure that events that change market cap, but which should not change the index, do not change the index. The sum of the market capitalisations of all of the index members forms the numerator.

For more, see https://www.investopedia.com/ask/answers/040215/what-does-sp-500-index-measure-and-how-it-calculated.asp

Stock market indices are still exposed to currency variations, because the denominator is not adjusted for currency variations, and the numerator is exposed to them: the index members' market caps are all in the same currency, and their profitability will almost always have some exposure to the currency too.

The one freak in all this is the Dow Jones Industrial Average, which doesn't behave like other indexes (it's a straight price average, not weighted by market cap), and should, broadly speaking, just be ignored.

share|improve this answer

answered 2 hours ago

EnergyNumbers

6,27111227

add a comment | 

up vote
6
down vote

Indexes don't have units. They're indexes.

An index is a ratio of two numbers. The two numbers have the same dimension. So their ratio is unit-less.

The compilers of each stock market index set a denominator which represents a base set of conditions, and they then may adjust that denominator to ensure that events that change market cap, but which should not change the index, do not change the index. The sum of the market capitalisations of all of the index members forms the numerator.

For more, see https://www.investopedia.com/ask/answers/040215/what-does-sp-500-index-measure-and-how-it-calculated.asp

Stock market indices are still exposed to currency variations, because the denominator is not adjusted for currency variations, and the numerator is exposed to them: the index members' market caps are all in the same currency, and their profitability will almost always have some exposure to the currency too.

The one freak in all this is the Dow Jones Industrial Average, which doesn't behave like other indexes (it's a straight price average, not weighted by market cap), and should, broadly speaking, just be ignored.

share|improve this answer

answered 2 hours ago

EnergyNumbers

6,27111227

add a comment | 

up vote
6
down vote

up vote
6
down vote

Indexes don't have units. They're indexes.

An index is a ratio of two numbers. The two numbers have the same dimension. So their ratio is unit-less.

The compilers of each stock market index set a denominator which represents a base set of conditions, and they then may adjust that denominator to ensure that events that change market cap, but which should not change the index, do not change the index. The sum of the market capitalisations of all of the index members forms the numerator.

For more, see https://www.investopedia.com/ask/answers/040215/what-does-sp-500-index-measure-and-how-it-calculated.asp

Stock market indices are still exposed to currency variations, because the denominator is not adjusted for currency variations, and the numerator is exposed to them: the index members' market caps are all in the same currency, and their profitability will almost always have some exposure to the currency too.

The one freak in all this is the Dow Jones Industrial Average, which doesn't behave like other indexes (it's a straight price average, not weighted by market cap), and should, broadly speaking, just be ignored.

share|improve this answer

answered 2 hours ago

EnergyNumbers

6,27111227

Indexes don't have units. They're indexes.

An index is a ratio of two numbers. The two numbers have the same dimension. So their ratio is unit-less.

The compilers of each stock market index set a denominator which represents a base set of conditions, and they then may adjust that denominator to ensure that events that change market cap, but which should not change the index, do not change the index. The sum of the market capitalisations of all of the index members forms the numerator.

For more, see https://www.investopedia.com/ask/answers/040215/what-does-sp-500-index-measure-and-how-it-calculated.asp

Stock market indices are still exposed to currency variations, because the denominator is not adjusted for currency variations, and the numerator is exposed to them: the index members' market caps are all in the same currency, and their profitability will almost always have some exposure to the currency too.

The one freak in all this is the Dow Jones Industrial Average, which doesn't behave like other indexes (it's a straight price average, not weighted by market cap), and should, broadly speaking, just be ignored.

share|improve this answer

answered 2 hours ago

EnergyNumbers

6,27111227

share|improve this answer

share|improve this answer

answered 2 hours ago

EnergyNumbers

6,27111227

answered 2 hours ago

EnergyNumbers

6,27111227

answered 2 hours ago

EnergyNumbers

6,27111227

6,27111227

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