Yatırımcı.AI

Sector index

A sector index is made up of the stocks of companies in the same sector and measures that sector’s performance. Borsa Istanbul calculates dozens of sector and sub-sector indices such as banks (XBANK), industrials (XUSIN), holdings (XHOLD), technology (XUTEK), food and transport.
Contents
  1. 1.Key points
  2. 2.Formula / calculation
  3. 3.Interpretation
  4. 4.Pitfalls
  5. 5.Frequently asked questions

Key points

  • A sector index diverging from BIST 100 signals sector-specific news or macro effects.
  • Sector indices support a "sector first, then stock" approach; looking for strong stocks in strong sectors is a common strategy.
  • in some sector indices a few large stocks hold most of the weight.

Formula / calculation

like the main indices, it is weighted by the free-float market cap of the stocks in the sector. Which sector index a company belongs to follows Borsa Istanbul’s classification.

Interpretation

Sector indices support a "sector first, then stock" approach; looking for strong stocks in strong sectors is a common strategy. Sector average P/E and P/B provide the comparison base for valuing individual stocks.

Pitfalls

in some sector indices a few large stocks hold most of the weight. In mixed sectors such as holdings it is hard to read a single trend. Sector definitions can change over time.

Pages where this term appears

Related terms

Frequently asked questions

A sector index is made up of the stocks of companies in the same sector and measures that sector’s performance.

like the main indices, it is weighted by the free-float market cap of the stocks in the sector. Which sector index a company belongs to follows Borsa Istanbul’s classification.

Yatırımcı.AI ResearchMethodology