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IndusInd Bank Q4 Results: PAT Soars 15% To Rs 2,349 Cr, NII Climbs 15%; 165% Dividend Declared -
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Tech Mahindra Q4 Results: Cons PAT Declines 41% YoY To Rs 661 Crore; Exits FY24 In Red -
1:5 Split Soon: Multibagger PSU Bank To Consider Dividend Too, Buy For TP Rs 650: Motilal Oswal -
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Multibagger Energy Stock To Reward Shareholders With 3 Bonus Shares, Hits 52-Week High -
Massive Rs 33/Sh Dividend By Larsen's IT Stock, 1650% Payout Soon; LTTS Earns Profit Of Rs 341 Crore In Q4 -
Rs 7.50/Share Dividend: Adani Group Cement Company Reports Strong Q4 Results; Profit Surges 2x YoY -
Closing Bell: Market Rebounds To End With Gains For 5th Straight Day; Sensex & Nifty Soar Led By Banks -
Gold Prices Ayodhya: In Ram-Janma-Bhumi, 24carat Falls By Rs 380 In 10-Grams, Drops By Rs 3,800 In 100-gram
What do index in stock markets imply and its significance?
So, index works to factor-in or take into account variations in the stock market as a whole including country-specific factors. The job is done through the process of averaging. Each of the stock includes two elements, stock-specific news and index news. And a good index value would cancel out stock-specific news and instead take into account news common to all the given set of stocks i.e. country-specific news.
Ups and downs in index value
The upward and downward movement of stock market index is indicative of the change in stock market expectations with regard to future dividends of the corporate sector in India. The surge or upside in the index value suggests that the stock market is optimistic about the future dividends of the corporates than before. On the other hand, fall or downside in the index implies that the stock market holds negative outlook with respect to the future dividends of the corporates. Ideal index shows real-time reading that reflects future outlook of the Indian corporates as perceived by the stock markets.
Significance of indices
Historically, indices have been looked upon as information source. Index value highlights the performance of the market. Of, late indices have found greater relevance in the field of finance on account of introduction of index derivatives and index funds. Index funds are primarily funds that invest passively in the index while index derivatives enable traders to hedge their risk exposure to an index and also speculate in respect of future index movements.
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