Nikkei 225 Index (N225)

Reuters  8 hrs ago  Comment 
Coca-Cola Co and brewer Kirin Holdings Co Ltd are near a deal for an operational and capital partnership amid intense price competition in the Japanese soft-drink market, the...
The Economic Times  Oct 25  Comment 
The benchmark Nikkei share average rose 0.8 per cent to 17,365.25, the highest closing level since April 25.
The Economic Times  Oct 25  Comment 
Australian stocks added 0.5 per cent and futures pointed to an opening gain of around 0.8 per cent for Japan's Nikkei helped by a softening yen.  Oct 25  Comment 
TOKYO (dpa-AFX) - The Japanese stock market is rising on Tuesday, tracking the overnight gains on Wall Street and as a weaker yen lifted exporters' shares. The benchmark Nikkei 225 Index is rising 98.69 points or 0.57 percent to 17,333.11,...
The Hindu Business Line  Oct 24  Comment 
Japan’s Nikkei share average was flat in choppy trade on Monday morning after profit-taking in cyclical stocks offset gains in drugmakers which had raised their earnings outlooks. The Nikkei was fl...
The Economic Times  Oct 21  Comment 
The broader Topix dropped 0.4 per cent to 1,365.29 and the JPX-Nikkei Index 400 shed 0.3 per cent to 12,231.17.
Wall Street Journal  Oct 21  Comment 
A strong dollar sent Asian shares broadly lower, with the Nikkei reversing gains in the late session after an earthquake rocked Western Japan.
Reuters  Oct 20  Comment 
Samsung Electronics Co Ltd is in talks with LG Chem Ltd to supply batteries for its new smartphones, the Nikkei newspaper reported, citing sources.
The Hindu Business Line  Oct 20  Comment 
Japan’s Nikkei share average rose to a near five-month high on Thursday morning taking cues from rising US stocks, while most investors are focused on the third US presidential debate.The Nikkei rose...


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.


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