Is share market Index connected to the performances of companies?

Answer 1

No, not connected directly.If fundamentals of any company is
good,I just do not understand how can it start performing bad if index falls or all of a sudden how it can start performing good? At the most you can come to know about peoples interest in any particular company if prices of shares of that company gets fluctuated very frequently.

Answer 2

The share market index is a calculated value based on the market prices of shares which comprise that index. E.g. The sensex is the weighted average of the prices of 30 bluechip stocks that form part of the index.

Since the index is calculated only on the basis of the market price of the stocks, it need not necessarily have a correlation with the fundamental performance of the companies in the short and medium term. The connection with the performance is only to the extent that the market prices of these shares are linked to the performance of the respective companies. However in the long term, the market price would certainly be determined by the performance.

Answer 3

Share Market index is definitely connected to the performance of companies that is listed in the Index

Take example S&P 500 tracks the performance of top 500 Companies in US. So if the Top Companies are not doing well, this will show in the Index.

Answer 4

yes. apart from historical performance it is more so on anticipated future performance in relation to profits. index consists of companies in a variety of industries, when a stock index goes up indivudual stocks consisting of the index may go up or go down. the weightage given to certain sectors comprising the index can itself propel the index in either way. say if an index has more companies from the petroleum refining sector [more weightage] and the market is bullish on that sector it would tend to impact the performance of the index on the whole [in simple terms].

Answer 5

Sure For more details consult the share brokers and the banks

Answer 6

enron