Nikkei 225 Index (N225)

QUOTE AND NEWS
Clusterstock  57 min ago  Comment 
TOKYO (Reuters) - Japan's financial watchdog plans to seek a financial penalty on Toshiba Corp , currently being investigated by an independent committee over accounting irregularities, the Nikkei reported on Saturday. The Securities and Exchange...
The Hindu Business Line  Jul 17  Comment 
Japanese stocks extended their rise into a fifth day on Friday thanks to strength on Wall Street, but gains were capped as investors refrained from taking big positions before a long weekend. ...
The Economic Times  Jul 17  Comment 
The Nikkei 225 index at the Tokyo Stock Exchange rose 46.51 points to 20,646.63 in the first few minutes of trading.
newratings.com  Jul 17  Comment 
TOKYO (dpa-AFX) - The Japanese stock market is marginally higher on Friday, extending gains into a fifth straight session, following the positive lead overnight from Wall Street. In late-morning trades, the benchmark Nikkei 225 Index is adding...
BBC News  Jul 17  Comment 
Japan's Nikkei index registers its biggest weekly gain since October, with Asian shares mostly higher as worries over Greece and China ease.
The Hindu Business Line  Jul 16  Comment 
Nikkei shares rose to a near three-week high on Thursday as overnight comments from Federal Reserve Chair Janet Yellen lifted the dollar against the yen, while news that Greek parliament approv...
The Economic Times  Jul 16  Comment 
The gauge has gained over 6% in the last one month, compared to an over 21% fall in China, and 1.5% rise in Japan's Nikkei.
The Economic Times  Jul 16  Comment 
Tokyo stocks opened 0.61 per cent higher on Thursday after US Federal Reserve chief Janet Yellen reiterated an interest rate hike remained likely this year as the economy improves.
MarketWatch  Jul 16  Comment 
Here are the latest trading levels for Asia's major stock markets: Tokyo (Nikkei Average ) up 0.5% ; Hong Kong (Hang Seng Index ) up 0.1% ; Shanghai (Shanghai Composite Index ) up 1.7% ; Sydney (S&P/ASX 200 ) up 0.5% ; Seoul (Kospi ) up 0.3% ;...
The Economic Times  Jul 15  Comment 
Japan's Nikkei share average rose to a 1-1/2-week high on Wednesday as investors were relieved that the worst may be over for the debt crisis in Greece.




 
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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