A stock market index is a calculation of the value of a segment of the stock market based on the prices of selected shares. Investors use it to describe the market and compare the return on specific investments. The KSE-100 index, for example, measures the value of 100 selected stocks listed on the Karachi Stock Exchange.

A stock market index is a statistical measure that tracks the performance of a specific group of stocks within a financial market. It serves as a barometer for the overall market's health and direction. Indices are constructed using a weighted average of the prices of the constituent stocks, with each stock's weight typically based on its market capitalization or some other factor. Common indices include the S&P 500, which tracks 500 large-cap U.S. stocks, and the Dow Jones Industrial Average, which follows 30 blue-chip stocks. Investors and analysts use indices to gauge market trends, compare the performance of different sectors, and benchmark the performance of their investments. Additionally, index funds and exchange-traded funds (ETFs) are investment vehicles that replicate the performance of specific indices.