Stock Market index, attempts to measure the relative performance of a portfolio of select stocks. A change in value of any of the underlying stock gets reflected in value of the Index. It also serves as a measure of comparative performance of portfolio.
A stock price index plays a significant role both as a general barometer of price movements in the stock market and as the country’s economic performance indicator. It is created by selecting a group of stocks that are overall or sectoral representative of the whole market depending on the objective of its design.