Nikkei 225 Index (N225)

QUOTE AND NEWS
The Hindu Business Line  12 hrs ago  Comment 
Japan’s Nikkei share average fell to a more than one-month low on Thursday as a worldwide drop in government bond prices spread unease among investors, compounded by a sell-off in Wall Street. ...
The Economic Times  May 7  Comment 
The Nikkei 225 index at the Tokyo Stock Exchange fell 239.64 points to end at 19,291.99 after a three-day holiday, while the Topix index of all first-section issues was down 0.69%.
TheStreet.com  May 5  Comment 
NEW YORK (TheStreet) -- Japanese equities, measured by the Nikkei 225 index, are off to another impressive year so far, outperforming the S&P 500 by almost 10 points. The Nikkei 225 even reached a historical milestone this year, reaching levels...
Market Intelligence Center  May 4  Comment 
U.S. stocks are moving up this morning following a strong Friday rally. The S&P 500 is up 0.27%, and the Dow is up 0.36%. Asian markets were mixed Monday after data indicated that the Chinese economy was slowing. The Hang Seng dropped 0.03%, while...
Market Intelligence Center  May 1  Comment 
U.S. stocks are rising this morning after ending April on a sharp downward note. The S&P 500 is up 0.37%, and the Dow is up 0.47%. Asian markets were mixed Friday as Japanese stocks were helped by several strong earnings reports. The Hang Seng...
The Economic Times  May 1  Comment 
Japan's Nikkei stock index was down about 0.2 percent and was trading below 19,500, after marking its biggest loss in four months in the previous session.
newratings.com  May 1  Comment 
TOKYO (dpa-AFX) - The Japanese stock market is lower on Friday, extending losses from the previous session following the negative cues overnight from Wall Street. Investors also treaded cautiously as they digested a raft of economic data. In...
MarketWatch  May 1  Comment 
Here are the closing levels for Asia's major stock markets: Tokyo (Nikkei Average ) up 0.1% (closed) ; Hong Kong (Hang Seng Index ) closed for holiday ; Shanghai (Shanghai Composite Index ) closed for holiday ; Sydney (S&P/ASX 200 ) up 0.4%...
The Economic Times  May 1  Comment 
The Nikkei 225 index at the Tokyo Stock Exchange, which tumbled 2.69 per cent on Thursday, fell 32.78 points to 19,487.23 at the start.
BBC News  May 1  Comment 
Japan's Nikkei index ends little-changed despite a slew of economic data from the world's third largest economy indicating signs of a recovery.




 
TOP CONTRIBUTORS

The Nikkei 225 Stock Index maps companies on the Tokyo Stock Exchange (TSE). It is the oldest and the most well known Asian index in the world. The Nihon Keizai Shimbun (Nikkei) newspaper has been commisioned to officially calculate this index since 1971. The Nikkei 225 began to be calculated on September 7, 1950, retroactively calculated back to May 16, 1949. Currently. the Nikkei is used as the major indicator for the Japanese economy, similar to the Dow Jones Industrial Average (.DJIA). In fact, it was known as the "Nikkei Dow Jones Stock Average" from 1975 to 1985.[1]. However, unlike the Dow Jones, as the Nikkei 225 is designed to reflect the overall market, there is no specific weighting of industries. Stock splits, removals and additions of constituents impact upon the effective weighting of individual stocks and the divisor.[2]

Weighting and Components

The Nikkei is a price weighted average index (the unit is Yen), similar to the Dow Jones Index, based on a par value of ¥50 per share. That means, a ¥50 price change in any stock affects the average the same way, regardless of whether the stock is priced at ¥5 or ¥500 per share. The Nikkei 225 index's components are reviewed every year in September. Any changes, if required, are published in October and the index is adapted accordingly.

To calculate an equal weighted index, the market capitalization for each stock used in the calculation of the index is redefined so that each index constituent has an equal weight in the index at each re-balancing date. In addition to being the product of the stock price, the stock’s shares outstanding, and the stock’s float factor – and the exchange rate when applicable; a new adjustment factor is also introduced in the market capitalization calculation to establish equal weighting.

  • Stock Market Value= Price of shares * Number of shares outstanding * Free float factor * Exchange Rate(if applicable) * Adjustment Factor[3]

The Adjustment factor of a stock is assigned to the stock at each re-balancing date, which makes the stock value for each stock equal. For index component, the value would be:

  • Adjustment Factor= Index specific constant "Z"/(Number of shares of the stock*Adjusted stock market value before re-balancing)

The main criticism with this index is that a $5 priced share would have the same weight as the $200 priced share, which gives the smaller shares more weight than their due. Moreover, the stocks keep changing and so does the equality, so the stock has to be rebalanced from time to time[4] as compared to a cap weighted index.

References

  1. Investopedia.com
  2. Wikipedia
  3. Calculating Equal weighted index
  4. Definition of a Equal Weighted Index
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