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Shares Made Simple: A beginner's guide to the stock market by Rodney Hobson

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Chapter 9: Stock Market Indices

It is quite easy to watch the progress of one or two shares day by day but you cannot possibly spot all the movements of all the shares on the London Stock Exchange.

It can, though, be useful to keep track of how the market generally is faring, so you can tell whether your shares are doing better than average or you can watch for warning signs that the market is weak. So a series of stock market indices has been devised which can tell you how the whole market or various parts of it have moved overall during the day.

Each index is calculated as a figure and the size of the change in that figure reflects the scale of the movement of the market as a whole.

On any trading day, some shares rise, others fall and ...

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