Stock market indices are also known as stock indices. They are lists of stocks and figures, which represent the composite value of their constituent stocks. The stock market indices are implemented to represent the features of their constituent stocks.
The stock market indices are categorized according to their functions and their characteristics. Usually, they are categorized into the following types:
Price weighted index
Market share weighted index
Capitalization weighted index or market value weighted index
Ethical investing index
Environment stock market indices
Broad based stock market indices
The broad based stock market indices are the most frequently quoted stock market indices and they are comprised of the stocks of transnational corporations that are listed on the principal stock exchange of a country. Stock market indices are also categorized on the basis of the type of industry, such as energy index, electronics index, finance index, metal index, and water index.
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