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What Moves Index Prices?


Index prices are determined by the price changes of their components. This means there’s a strong correlation between the index’s performance and the prices of the main constituent stocks. Some of the factors capable of moving index prices include:


  • Overall Market Sentiment: The structure of indices allows them to serve as stock market benchmarks. Because they are composed of multiple stocks, they tend to reflect the overall sentiment in the market. So, for instance, if the market is generally bullish, an underlying index will tend to see its prices rise. Some of the factors that can influence market sentiment include: Economic factors such as wages and inflation, Company news reports, Central bank announcements and Interest rates

  • Company News: News about companies with significant weighting within an index can influence its overall price direction. Some of the most impactful company news include: Earnings reports, Profit forecasts and warnings, Mergers and acquisitions and Changes in management.

  • Index Rebalancing: Most indices are rebalanced periodically. This rebalancing can see new companies included in the index while others are dropped. This rebalancing may also include an increase or decrease in the weightings of certain components within the index. The period from pre-announcement to effective rebalancing date and post-rebalancing period can be very volatile for prices of indices depending on the expected events.

  • Sector Performance: The performance of a sector can influence the overall performance of an index. For instance, Technology has a sector weight of about 27% on the S&P 500. If the sector faces tough economic conditions and tech stock prices decline sharply, this will also trigger price losses on the S&P 500.

  • Commodity Prices: Commodities support many economic activities of various companies. Many indices include the stocks of commodity companies. For instance, the UK FTSE 100 has about 13% of its weight in energy. Therefore, changes in the commodity market can have an influence on the overall price of the index.

  • Political Events: As broad benchmarks, indices are vulnerable to major political events such as elections, trade wars, or cross-country conflicts. For instance, the UK Brexit event triggered volatility in the UK indices market.

ASX Index Trading Apps Ranking Methodology


This ranking of the best trading apps for the ASX Index is based on a comprehensive evaluation focusing on several key factors that influence user experience and trading success. Our methodology includes:


  • User Interface and Experience: Assessing the ease of use and intuitiveness of the app's interface.

  • Trading Tools and Features: Evaluating the availability of advanced trading tools, real-time data, and analysis resources.

  • Security and Reliability: Ensuring top-notch security measures and reliability of the app.

  • Customer Support: Analyzing the availability and quality of customer service and support.

  • Costs and Fees: Comparing the fee structure and any hidden costs associated with trading on the app.

  • Market Access: Considering the range of ASX Index-related assets and overall market access provided.

  • User Reviews and Feedback: Incorporating feedback from actual users to gauge overall satisfaction and performance.

  • Regulatory Compliance: Verifying the app's adherence to Australian financial regulations and standards.

TRADING

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 76% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

AvaTrade, a globally recognized broker, stands out in ASX index trading for several key reasons:


  • Competitive Spreads: Offering some of the most competitive spreads in the industry, AvaTrade ensures cost-effective trading.

  • Advanced Trading Platforms: Access to user-friendly platforms like MetaTrader 4 and AvaTradeGo, suited for both beginners and experienced traders.

  • Diverse Trading Instruments: A broad range of instruments available for trading alongside the ASX index.

  • Regulation and Security: Strict adherence to regulatory standards and robust security measures to protect traders' interests.

Why?
AVATRADE

TOP ALTERNATIVE

AVATRADE

avatrade.com

VISIT >

Top Apps for Trading on the ASX Index

OTHER ALTERNATIVES

SAXO BANK

saxobank.com

ETORO

etoro.com

eToro is a multi-asset investment platform. The value of your investments may go up or down. Your capital is at risk. Crypto assets are highly volatile and unregulated. No consumer protection. Tax on profits may apply

TOP RANKING: ASX INDEX TRADING APPS

Indices are financial instruments designed to track the overall price performance of a basket of stocks. An index uses a statistical measure of change to reflect the overall performance of the defined stocks effectively.

Indices can be excellent for trading, as they offer exposure to broad market movements and built-in diversification to reduce the risks.

Discover the elite trading apps for the ASX Index, the Australian prime index, representing the top companies listed on the Australian Stock Exchange. Navigate the markets with these top picks.

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