What Are Indices?
Indices measure the collective performance of a group of stocks, generally from a specific country. For example, one of the leading indexes is the Nikkei 225, which is a collection of Japan’s top 225 companies traded on the Tokyo Stock Exchange. If the overall value of those companies’ stocks rises then the Nikkei 225 will rise. It is important to point out that trading CFDs on indices is far less costly than trading the underlying index as you are only trading on the price movement as opposed to purchasing the actual index.
What Causes Indices to Move?
Indices generally are impacted by broader market movement which affects the value of many companies. Typical examples include: