Nikkei 225 Index (N225)

QUOTE AND NEWS
The Economic Times  Aug 15  Comment 
The Nikkei ended flat at 15,318.34 in choppy trade and on subdued volume due to the summer lull.
The Economic Times  Aug 15  Comment 
Japanese stocks snapped a four-day winning streak on Friday morning, as investors took a breather ahead of the weekend.
MarketWatch  Aug 15  Comment 
Here are the latest trading levels for Asia's major stock markets: Tokyo (Nikkei Average) flat ; Hong Kong (Hang Seng Index) up 0.7% (at break) ; Shanghai (Shanghai Composite Index) up 0.8% (at break) ; Sydney (S&P/ASX 200) up 0.5% Taipei...
Market Intelligence Center  Aug 15  Comment 
The Economic Times  Aug 14  Comment 
The broader Topix rose 0.7 per cent to 1,270.50 with trading volume less than 90 per cent of its recent averages.
Japan Today  Aug 14  Comment 
Tokyo stocks closed 0.66% higher on Thursday, boosted by a weaker yen and after gains on Wall Street. The Nikkei 225 index added 100.94 points to finish at 15,314.57, while the Topix index of all first-section issues was also up 0.66%, or 8.37...
MarketWatch  Aug 13  Comment 
Here are the closing levels for Asia's major stock markets: Tokyo (Nikkei Average) up 0.4% ; Hong Kong (Hang Seng Index) up 0.8% ; Shanghai (Shanghai Composite Index) up 0.1% ; Sydney (S&P/ASX 200) down 0.3% ; Seoul (Kospi) up 1% ; Taipei (Taiex)...
The Economic Times  Aug 13  Comment 
The Nikkei rose 0.4 per cent to 15,213.63 while the broader Topix gained 0.4 per cent to 1,262.13, a one-week closing high.
Japan Today  Aug 13  Comment 
Tokyo stocks rose 0.35% Wednesday as the market cast off early losses that followed data showing Japan's economy contracted in the last quarter. The benchmark Nikkei 225 index, which had opened 0.33% lower, added 52.32 points to finish at...
The Economic Times  Aug 13  Comment 
Japan's Nikkei share average edged up 0.2 per cent while MSCI's broadest index of Asia-Pacific shares outside Japan stood flat.
Reuters  Aug 13  Comment 
Japan's benchmark Nikkei average opened down 0.33 percent at 15,111.76 on Wednesday, while the broader Topix shed 0.24 percent to 1,254.69.




 
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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