NIKKEI 225 Index: A Comprehensive Guide

Understand the NIKKEI 225 and Its Importance

The Nikkei 225 Index is a stock market index that tracks the performance of 225 of the largest and most prestigious companies listed on the Tokyo Stock Exchange (TSE).

It is one of the most widely recognized indices in Asia and serves as a barometer of the Japanese economy's health.

The Nikkei 225 is calculated using a weighted average of the share prices of its constituent companies.

Key Features of the NIKKEI 225 Index

• Number of Constituents: 225
• Market Capitalization: Approximately $4 trillion
• Industries Covered: Diversified, including technology, finance, manufacturing, and consumer goods

Historical Performance and Trends

The Nikkei 225 has shown significant fluctuations over time, reflecting the ups and downs of the Japanese economy.

It reached its peak in December 1989, following the economic bubble of the 1980s.

Since then, it has experienced periods of growth and decline, but has generally trended upward in recent years.

Constituents and Weighting

The Nikkei 225 Index includes a diverse range of companies from different industries.

The largest sectors represented are:

• Technology
• Finance
• Manufacturing
• Consumer Goods

Each company's weighting in the index is based on its market capitalization.

Applications and Uses

The Nikkei 225 Index is widely used by investors and financial institutions to:

• Track the performance of the Japanese stock market
• Evaluate investment opportunities
• Benchmark portfolio performance
• Conduct economic analysis