What are the most traded indices of 2024?

The global financial landscape in 2024 has seen unprecedented dynamism, with stock indices continuing to play a pivotal role in guiding traders and investors. These indices, which aggregate the performance of select stocks, provide insights into broader market trends and economic health while serving as key investment tools.

One critical metric often associated with indices is trading volume, which reflects the number of shares or contracts exchanged during a specific period. High trading volumes are a strong indicator of market activity and liquidity, demonstrating market participants' interest level.

Notably, trading volume reveals much more than just activity; it often highlights market sentiment and conviction in either direction. For example, heightened trading volumes during a rally may indicate strong investor confidence and optimism, while similarly elevated volumes during a sell-off could signify fear or uncertainty. This dual nature makes trading volume a valuable barometer for understanding market dynamics.

Key insights:

1. US indices lead the way: The S&P 500, Nasdaq 100, and Dow Jones Industrial Average dominate global trading volumes, driven by their stability and growth potential.
2. Technology drives volatility: The Nasdaq 100 has seen heightened activity due to rapid advancements in AI, semiconductors, and tech innovation, making it a hotspot for traders.
3. Global diversification trends: Investors increasingly trade international indices such as the Nikkei 225 and Germany’s DAX, seeking exposure to diverse economies.
4. Emerging markets on the rise: Indices like the NIFTY 50 (India) and Bovespa (Brazil) have gained prominence, reflecting investor confidence in emerging market growth stories.
5. Economic indicators at play: Trading activity often correlates with macroeconomic shifts, including inflation, interest rates, and geopolitical developments, influencing index movements.
6. Sector-specific momentum: Energy, healthcare, and consumer goods sectors are driving significant activity across indices like the FTSE 100, Nikkei 225, and NIFTY 50, as global trends in renewable energy, medical advancements, and consumer demand take centre stage.
7. Resilience amid uncertainty: Despite geopolitical tensions and unsteady economic policies, indices such as the Nikkei 225 and DAX 40 demonstrate resilience, highlighting the strength of diversified economies and investor adaptability.

What are stock indices, and why are they important?

Stock indices track the performance of a selected group of stocks, providing a snapshot of market trends. Traders use them to evaluate economic health, assess sector-specific trends, and develop trading strategies. The appeal of indices lies in their ability to provide diversified exposure, making them a favoured tool for individual and institutional investors.

In 2024, indices like the S&P 500, Nasdaq 100, and Nikkei 225 remain benchmarks for their respective markets, while emerging market indices like NIFTY 50 and Bovespa gain traction among investors seeking growth opportunities.

The most traded indices of 2024

These indices include:

• S&P 500 (USA): Representing 500 of the largest publicly traded US companies, the S&P 500 reflects the overall health of the American economy. Its diverse sector representation ensures its status as a trading favourite.
• Nasdaq 100 (USA): Known for its focus on technology and innovation, the Nasdaq 100 has drawn immense interest as the tech sector continues to thrive.
• Dow Jones Industrial Average (USA): Often seen as a benchmark for industrial and blue-chip stocks, the Dow remains a reliable choice for traders seeking long-term stability.
• Nikkei 225 (Japan): With Japan’s export-driven economy and a favourable currency environment, the Nikkei has been a significant focus for both domestic and international traders.
• FTSE 100 (UK): A pillar of European markets, the FTSE 100 reflects the performance of the UK’s largest corporations, spanning sectors such as energy, finance, and consumer goods.
• NIFTY 50 (India): India’s rapid economic growth has propelled the NIFTY 50 into the spotlight, with tech, consumer goods, and infrastructure driving its performance.

Indices with the highest trading volumes in 2024

Trading volumes provide a window into investor confidence, market sentiment, and activity, but do not necessarily indicate positive performance. In 2024, the most traded indices reflect bullish trends, sectoral opportunities, and adverse events that prompted increased speculative or short-selling activity.

European markets

• Germany 40 (DAX): As the benchmark for Europe’s largest economy, the DAX remains one of the continent's most traded indices, reflecting the health of Germany’s industrial and manufacturing sectors. This year, trading volumes surged due to an improving outlook in automotive exports, and concerns over energy costs following geopolitical tensions. Domestic and European traders view the DAX as a barometer for regional stability and growth.
• FTSE 100 (UK): High volumes in the FTSE reflect its strong weighting toward energy and financials; sectors that have seen steady demand amidst global volatility. While the pound’s fluctuations earlier in the year added a speculative element to trading activity, the index continues to attract attention from international participants seeking exposure to established blue-chip companies.
• France 40 (CAC): France’s leading index has gained trading volume from its luxury goods and renewable energy sectors, highlighting robust performance. However, rising interest rates across Europe prompted mixed sentiment, with long and short positions increasing trading volumes.

US markets

• S&P 500: This index dominates global trading volumes as it mirrors the broad US economy. Increased activity is attributed to tech-sector volatility and investor hedging during periods of economic uncertainty, such as rising interest rates and inflation concerns.
• Nasdaq 100: While driven by advancements in AI, clean energy, and semiconductors, the index has also seen significant short selling in response to disappointing earnings reports from tech giants, leading to spikes in trading activity.
• Dow Jones: It maintains stable volumes, though increased trading was observed during geopolitical shocks and commodity price fluctuations, which influenced blue-chip stocks in energy and manufacturing.

Asian markets

• Nikkei 225 (Japan): Attracted significant volumes due to Japan’s economic stability, but a weaker yen prompted speculative short positions from international investors, further driving trading activity.
• NIFTY 50 (India): While growth in the tech and consumer goods sectors has boosted confidence, political uncertainties and higher-than-expected inflation prompted a mix of long and short trades, adding to trading volumes.
• Hang Seng Index (Hong Kong): Trading volumes in the Hang Seng have been driven by heightened interest in Chinese tech and property stocks, alongside speculative activity surrounding regulatory changes and economic uncertainty in China.

Key sectors driving trading activity in 2024

Several sectors have emerged as key drivers of trading activity across global indices:

1. Technology: With AI breakthroughs, cloud computing, and automation leading innovation, tech-heavy indices like the Nasdaq 100 and NIFTY 50 have seen significant gains.
2. Energy: The dual forces of fluctuating oil prices and a shift toward renewable energy have kept energy stocks in the spotlight.
3. Healthcare: Biotechnology and pharmaceutical advancements have driven activity in indices like the S&P 500 and Nikkei 225.
4. Industrial manufacturing: Recovery in global supply chains has led to renewed interest in manufacturing-heavy indices like Germany’s DAX 40.
5. Consumer goods: Growing middle-class demand in emerging markets has bolstered the performance of indices like the NIFTY 50.

Regional comparisons: US, Europe, and Asia

The trading landscape varies significantly by region, influenced by economic conditions, policy changes, and sectoral performance.

• United States: US indices, including the S&P 500, Nasdaq 100, and Dow Jones, dominate due to the country’s robust economy, technological leadership, and investor-friendly regulations. The Federal Reserve’s interest rate decisions have been critical in shaping trading activity.
• Europe: European indices like the FTSE 100 and DAX 40 reflect the continent’s recovery from economic uncertainty. Energy and financial stocks have driven growth, supported by stabilising geopolitical conditions.
• Asia: Asian markets are gaining prominence, with the Nikkei 225 and NIFTY 50 leading the charge. Japan’s export strength and India’s expanding tech sector have attracted global investors, while China’s economic policies have influenced regional markets.

Year-on-year comparisons of trading volumes

A comparison of 2024 trading volumes with previous years highlights significant trends:

• Nasdaq 100: A standout performer, recording an 18% increase in trading volumes due to rapid growth in AI and semiconductor stocks.
• NIFTY 50: Trading activity rose by 22%, reflecting India’s vigorous economic performance and increasing global interest in its markets.
• FTSE 100: Experienced a 10% increase in trading volumes, driven by strong performance in energy and healthcare.

External factors shaping trading activity in 2024

Several external factors have significantly influenced index trading this year:

1. Macroeconomic policies: Interest rate decisions by central banks have impacted liquidity and trading behaviour across regions.
2. Geopolitical events: Trade disputes, regional conflicts, and shifting alliances have shaped market sentiment.
3. Technological innovation: The rise of AI and clean energy technologies has created new opportunities in tech-focused indices.
4. Emerging markets growth: Economic expansion in countries like India and Brazil has driven increased activity in their respective indices.

New entrants and shifts in rankings

2024 has seen notable shifts among the most traded indices:

• Emerging markets: Indices like NIFTY 50 and Bovespa have climbed the rankings due to strong growth and investor interest in developing economies.
• Small-cap indices: Increasing interest in niche markets has brought smaller indices into focus, though they remain secondary to global benchmarks.

Risks and benefits of trading indices

Benefits:

• Diversification: Exposure to multiple sectors reduces individual stock risk.
• Liquidity: High trading volumes make indices easy to trade.
• Market insights: Indices act as economic barometers, reflecting sectoral trends.

Risks:

• Volatility: Indices can experience sudden price swings due to macroeconomic factors.
• Sector concentration: Indices heavily weighted in specific sectors (e.g., tech in Nasdaq 100) carry higher risks during sector downturns.
• Leverage: Trading with borrowed funds amplifies both potential gains and losses.

Indices snapshot: 2024

1. S&P 500 (USA)
   ○ Daily volume: $400B
   ○ YTD performance: +12%
   ○ Key sectors: Technology, energy, healthcare
2. Nasdaq 100 (USA)
   ○ Daily volume: $320B
   ○ YTD performance: +18%
   ○ Key sectors: Technology, consumer discretionary
3. Dow Jones (USA)
   ○ Daily Volume: $180B
   ○ YTD performance: +8%
   ○ Key sectors: Industrials, consumer goods
4. Nikkei 225 (Japan)
   ○ Daily volume: ¥2.7T ($18B)
   ○ YTD performance: +10%
   ○ Key sectors: Technology, automotive
5. FTSE 100 (UK)
   ○ Daily volume: £120B ($150B)
   ○ YTD performance: +7%
   ○ Key sectors: Energy, financials
6. NIFTY 50 (India)
   ○ Daily volume: ₹65,000 Cr ($8B)
   ○ YTD performance: +22%
   ○ Key sectors: Technology, consumer goods
7. DAX 40 (Germany)
   ○ Daily volume: €60B ($64B)
   ○ YTD performance: +9%
   ○ Key sectors: Industrials, consumer discretionary
8. Hang Seng (Hong Kong)
   ○ Daily volume: HK$120B ($15B)
   ○ YTD performance: +6%
   ○ Key sectors: Real estate, technology
9. Bovespa (Brazil)
   ○ Daily volume: R$30B ($6B)
   ○ YTD performance: +14%
   ○ Key sectors: Energy, consumer goods
10. Shanghai Composite (China)
    ○ Daily volume: ¥450B ($65B)
    ○ YTD performance: +5%
    ○ Key sectors: Financials, technology

The most traded indices in 2024 reflect the evolving dynamics of global markets, highlighting economic recovery, technological innovation, and sectoral growth. By analysing the factors driving trading activity in these indices, traders can navigate opportunities and mitigate risks in today’s complex financial environment. Understanding regional trends, key sectors, and external influences is critical for staying ahead in the fast-paced index trading world.

FAQs

What makes an index ‘most traded’?

An index qualifies for our ‘most traded’ list when it consistently attracts high trading volumes, indicating significant investor interest. Market stability, sector diversity, and global economic relevance drive trading activity.

Why is the Nasdaq 100 so popular among traders?

The Nasdaq 100 is favoured for its heavy focus on high-growth technology companies, such as those in artificial intelligence, software, and renewable energy. Traders are drawn to its volatility and the potential for substantial returns during tech-driven market booms.

How do geopolitical events impact index trading?

Geopolitical events, such as trade agreements, regional conflicts, or shifts in global alliances, can influence investor sentiment and market volatility. These events particularly impact indices sensitive to international trade, like the Nikkei 225 or FTSE 100.

Are emerging market indices like the NIFTY 50 riskier to trade?

Emerging market indices can carry higher risks due to currency volatility, political instability, and less mature regulatory environments. However, they also offer significant growth potential, making them attractive for investors seeking higher returns.

What sectors are likely to drive index performance in the future?

Technology and renewable energy are expected to remain dominant drivers of index performance. Other sectors, like healthcare, consumer goods, and industrial manufacturing, will also play a significant role as economies recover and innovate in response to global challenges.