Nikkei 225 Index (N225)

QUOTE AND NEWS
The Economic Times  8 hrs ago  Comment 
The broader Topix fell 0.5 per cent to 1,316.63, with only 1.24 billion shares changing hands, the lowest level since April 2014, with many market participants away due to Japan's 'bon' holidays.
Clusterstock  Aug 13  Comment 
TOKYO (Reuters) - Japan's financial watchdog estimates that negative interest rates under the Bank of Japan's monetary easing policy will reduce profits for the country's three big banks by at least 300 billion yen ($2.96 billion) for the year...
The Economic Times  Aug 12  Comment 
The Nikkei ended up 1.1 per cent at 16,919.92, gaining 4.1 per cent for the week. It rose as high as 16,943.67 earlier, its highest since June 1.
The Hindu Business Line  Aug 12  Comment 
newratings.com  Aug 12  Comment 
TOKYO (dpa-AFX) - The Japanese stock market is rising on Friday, tracking the overnight gains on Wall Street. The market was closed on Thursday for a holiday. In late-morning trades, the benchmark Nikkei 225 Index is advancing 153.60 points or...
The Economic Times  Aug 10  Comment 
The Nikkei closed down 0.2 per cent at 16,735.12. After ending the morning session down 0.3 per cent, it briefly turned positive in afternoon trade before giving up its gains.
Wall Street Journal  Aug 10  Comment 
Stocks in Asia were mixed in a largely muted reaction to a record high in U.S. shares, while a stronger yen capped gains in Japan’s Nikkei Stock Average.
Forbes  Aug 10  Comment 
Yesterday we walked through some charts from key global stock markets. As we know, the S&P 500 has been leading the way, printing new highs this week.
The Economic Times  Aug 9  Comment 
Brother Industries Ltd gained 19.3 per cent after the office equipment maker revised up its earnings forecast.
newratings.com  Aug 9  Comment 
TOKYO (dpa-AFX) - The Japanese stock market is marginally higher on Tuesday amid choppy trades following the lackluster cues overnight from Wall Street. In late-morning trades, the benchmark Nikkei 225 Index is adding 21.49 points or 0.13 percent...




 
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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