Major Global Indices At A Glance

The DAX counts dividends and the others do not

The headline DAX is a performance index, meaning dividends are treated as reinvested and included in the level. Almost every other major index you will trade is a price index, where the level drops mechanically when constituents go ex-dividend.

The consequence is easy to miss and easy to misread. Over a decade, a total return index will show a substantially higher rise than a price index covering an equivalent market, without either market having outperformed. In April and May, when European dividend season concentrates the ex-dates, a price index can drift lower for reasons that have nothing to do with sentiment while the DAX shows no such drag. Comparing the two on a long chart and concluding that Germany outperformed is a straightforward mistake.

Currency is the second position you did not open

An index denominated in a currency you do not hold is two exposures. If your account is in dollars and you buy the Nikkei, your profit and loss is the index move multiplied by the yen move, and some brokers convert at the close while others hedge it. Check which.

There is a second, subtler currency effect inside the index itself. FTSE 100 constituents earn a large majority of their revenue outside the United Kingdom, so a falling pound raises the sterling value of those foreign earnings and has historically supported the index. That relationship cuts both ways and it means a sterling story can move the FTSE without any change in the underlying businesses. The same logic applies in reverse to Japanese exporters and the yen.

Sector balance decides which release you have to watch

Each index's sector mix determines what it is sensitive to. A technology-heavy index responds sharply to interest rate expectations, because a large share of its value is in cash flows that are years away and a higher discount rate cuts those hardest. A resource-heavy index is closer to a commodity price bet. A banking-heavy index cares about the shape of the yield curve.

That is why the same central bank decision can lift one index and weigh on another within an hour. It also means the phrase "stocks were up" is not information. Before a scheduled release, know which of your indices is most exposed to it, and remember that scheduled events land inside specific sessions, which the trading sessions guide maps out.

Pick one and learn its habits

The realistic advice for a small account is to trade one index for a few months rather than sampling all of them. Each has its own average range, its own reaction to the opening auction, its own quiet hours and its own gap behaviour into the weekend. Those habits take weeks to learn and they do not transfer.

Start with whichever index's core session fits your day, since trading outside it means wider spreads and thinner liquidity. Write down its point value, its typical daily range in points, and the dollar cost of a stop at that range. Keep a note of how it behaved through the last three rate decisions and the last earnings season. If a term on the index factsheet is unfamiliar, the trading glossary covers the recurring ones. That file is worth more than a broad survey of all six.