Demystifying Development and Maneuvring of Indices of Stock Market in India

Abstract

A plethora of information on indices of popular bourses across the globe has heisted investors off their mental peace to give them nightmares. Operational nuances and informed interpretations of the movement in the stock market indices of bourses operating at the international level, regional level, and national level and of those of sector specific have always been a daunting task to myriad of investors actively functioning in the market arena. This paper seeks to demystify the modus operandi of developing indices of bourses using pragmatic episodes and thereby aid the investors in comprehending the subtleties associated with it and the niceties involved in its dexterous maneuvering and making robust decisions for triumphant innings in the bourses. This paper provides model of insights in computation of stock market indices with techniques such as market capitalization weighted index, free-float weighted index, price weighted index, equal weighted index, impact cost, and index management.