"Today's broad market broke through the 2700-point barrier, hitting a high of 2759 and closing at 2728, up 36 points......"
-... -We often hear descriptions like this, the following is just contact with the stock market novice friends to explain the broad market index.
Usually we say that the broader index refers to the SSE, full name Shanghai Stock Exchange Composite Index of Stock Prices, will also be referred to as the Shanghai Composite Index, SSE Composite, Shanghai Composite Index or Shanghai Index.
The SSE Index is a stock price index calculated by the weighted average method using December 19, 1990 as the base period, with all listed stocks as samples and stock issuance as weights, and the base period index set at 100.
Simply put, it is the total market capitalization of the calculation period compared with the total market capitalization of the base period to get a relative change value, as a response to the relative level of market stock prices.
Market capitalization = share price per share x total number of shares.
Checking Square Dance yesterday's closing price of 27.6 yuan, the total number of shares of 2 billion, then its market capitalization is
27.6 × 2 billion = 55.2 billion yuan
The broad market index represents the overall state of the stock market, most of the stocks are up, the broad market index rose, and vice versa, fell.
But because it's weighted by issuance, stocks with larger total equity have a bigger impact on the SSE index, which is why it's often said that the index has become a tool for large institutional investors to create a market, making the index move against the rise and fall of most stocks.
Besides the broader index, there are also a series of stock price indexes such as the SZSE Composite Index, the SZSE Component Index, the SSE Component Index, the CSI 300 Index, the CSI Scale Index and so on, which are calculated by choosing different sample stocks and base periods to measure the price level and trend of movements in the stock market.
For example, the CSI 300 index is a stock price index calculated according to certain criteria by picking 300 stocks from the Shanghai and Shenzhen markets, taking Dec. 31, 2004, as the base period and setting the base point at 1,000, according to the Permit weighting method.
The sample stocks, that is, the constituent stocks of the selection criteria space is:
1. listed and traded for more than a quarter (except for the top 30 of the outstanding market capitalization)
2. non-ST, * ST stocks, non-suspended stocks
3. the company's operating conditions are good, the last year there are no major violations of laws and regulations, and no major problems with the financial report
3. the company's operating conditions, no major violations of laws and regulations, and no major problems with the financial report
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4. No obvious abnormal fluctuations in stock price or market manipulation
5. Excluding other stocks that are determined by the expert committee to be ineligible to enter the index
Then a number of indicators of the stocks within the standardized space are calculated and ranked, and the top 300 stocks are selected. The main objective is to select stocks that are large and liquid.
In addition, the CSI 300 Index will also make regular adjustments to its constituents as required, in principle every six months.