Stock Market Index

A set of stocks in an equity market constitute Stock Market Index. In this type the exchange are mostly specific and the exchange take place between the region or country. While analyzing Stock Market Index it gives out a clear cut figure of performance of region or country. It is region specific or country specific. Stock Market Index is an essential one in comparing and bench marking but does not serve as an absolute measure. Stock Market Index helps one in measuring the relative prices of a predefined group of stocks but measuring with a predefined index gives you the mutual fund performance. Commencing from base date the weighted average of prices to the expressed relative is taken into account. So when the value of the index goes down the whole constituent does not falls. But by the movement of the trend you can predict the nature of the market as a whole.