Usually, the average share price or stock market value in the reporting period is compared with the average share price or stock market value in the selected base period, and the ratio of the two times the index value in the base period is the stock price index in the reporting period.
When the stock price index rises, it means that the average price level of the stock rises; When the stock price index falls, it means that the average price level of stocks falls; It is a barometer that sensitively reflects the social, political and economic changes of the country (or region) where the market is located.
Extended data:
Investment value of stock price index:
If the bull market makes the stock price deviate from its investment value, the profits of shareholders are virtual, and some shareholders' profits are based on the losses of others.
In a short-term bull market, the stock market may create an illusion that all shareholders are profitable, but this kind of profit is fictitious, because the overall value of stocks is calculated by the transaction price of some stocks.
When a stock is traded at a higher price, the market value of some unlisted stocks will be calculated at the trading price. As a result, the book value of shareholders holding such shares has increased.
For example, at present, more than 70% of the state-owned shares or legal person shares of listed companies in China are not listed and circulated, but some people often calculate the value of state-owned assets by the market price of shares. After the stock price rose, they thought that the state-owned assets had increased in value.
However, if all the shares of listed companies are in circulation, it is difficult for the stock price to be as high as the current stock market due to the sharp increase in stock supply.
Therefore, the profit in the stock market can not be calculated by the transaction price of others, but only by the transaction price realized when selling.
Baidu encyclopedia-stock price index