A stock index is a crucial part of financial markets, but it is nothing more than a group of companies under one name, differently said, the top shares from a particular exchange.
For example, the FTSE 100 represents the largest 100 companies traded on the London Stock Exchange. If on average, the share price of these companies will go up- then the FTSE 100 will rise with them. And if they fall, it will drop.
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