Concept guide · Equities & Valuation
Major Equity Indexes, Breadth & Concentration
Why market-cap-weighted indexes can rise even when most constituent shares decline.
What it means
Market breadth describes participation across securities, such as the count advancing versus declining. A capitalisation-weighted index gives larger companies greater influence over the overall index.
Why it matters
A positive headline index can conceal weak typical-stock performance. Sector weights, different index construction and leadership concentration affect market interpretation.
Check the evidence
Use actual advance/decline, equal-weight and sector metrics when available; the gap between two different indexes alone cannot prove a single cause.
Relative performance: outperforming is not the same as rising
Compare a share and its benchmark over the same dates, currency and return convention. A move from 100 to 105 is 5%; a sector move from 100 to 102 is 2%. The difference is 3 percentage points. A share falling 1% while its sector falls 4% also outperforms by 3 percentage points, despite losing value. This descriptive difference is not automatically risk-adjusted alpha and does not prove what caused the move.