3rd episode : STOCK MKT

The first questions any share investor asks are, 'Is the market up or down?' and 'How are my shares doing?'. The answers to these and many other questions about the market depend on having a good sharemarket index. It measures the market and tells you if it's up, down, ahead or behind. But what is an index?
A stock market index is a bunch of stocks grouped together to measure a certain sector (utilities, banks, metal etc.) of the stock market.

A sector index is a specialized index tracking the performance of a specific sector of the stock market. ( Scroll down to the bottom for the different sectors of the stock mkt ).

For example, a number of companies such as Ranbaxy, glaxo, cipla etc. will be grouped together to create a pharmaceutical stock index. 

As the stocks in this  group change value, the index also changes value. If the index goes up by 1% then that means the "total value" of all the securities (stocks) that make up the index have gone up in value by 1%.

The Dow Jones U.S. Oil & Gas Index, for example, consists of roughly 100 companies in the oil and gas industry. The index measures the performance of the oil and gas sector of the United States equity market, including oil and gas producers, oil equipment, oil services, and distribution.

Another index is ' A broad based index'  is exactly how it sounds, it's broad and covers a larger number of stocks. It represents the performance of a "whole market". When people refer to the stock market or its performance, they are most likely referring to a broad based index.

If u take a step in more detail then one more index is there ' Blue-Chip Index '.

A stock Index that tracks the shares of the top-performing publicly traded companies. Blue-chip stocks represent companies that are financially stable, well established and provide good returns for investors, making them desirable investments, because blue-chip co., tend to perform similarly to the economy as a whole. The performance of a blue-chip index may be considered a gauge of an industry's or a region's economic strength. 

Sectors

1)Metals  

2) Auto

3) Banking

4)Breweries and distilleries

5)Power

6)Telecom

7)Cement

8)Chemicals

9)Computers

10) IT

11)Construction

12) FMCG

13) Electronics

14)Engineering

15) Entertainment/Media

16)Finance and Investments

17) Hotel

18) Food processing

19) Healtcare
20) Pharma

21) Paint

22) paper

23) Petrochemicals
24) Plastic

25) Refineries

26) Sugar
27) Tea

28) Airlines

Info : investopedia,