The Hindu Business Line : Roars so loud, and thunders in the index

This was a week when the index was mutinous. It refused to come to terms with investors' wishes, even as the Finance Minister kept willing the gyrations on the charts to come to order, reminding one of King Canute, who once ordered the waves: "I command you to come no farther! Waves, stop your rolling, and do not dare to touch my feet!"

Perhaps, the Finance Minister could not hear "roars so loud, and thunders in the index," as in a snatch of dialogue between Queen Gertrude and Hamlet. Right time to come to terms with the index, therefore, after ``an index and obscure prologue,'' as Iago says in Othello.

The word is serendipitously next to `indeterminism': A philosophical doctrine that not all events are wholly determined by antecedent causes, the state of being uncertain or undecided, as Concise Oxford English Dictionary defines. Quite apt for the stock market's sensitive index, too, isn't it?

Index is "number that measures economic changes during intervals of time," says www.moneyglossary.com. Index provides "a representation of the value of the securities which constitute it," explains www.investorwords.com. "Indices often serve as barometers for a given market or industry and benchmarks against which financial or economic performance is measured."

Arms index is not about the arsenal in the armoury; it is a market indicator used in technical analysis. Market volatility index or VIX is based on option activity; it is used as "an indicator of investor sentiment, with high values implying pessimism and low values implying optimism."

An index is a great leveller, says George Bernard Shaw. True; post major shakeouts that indices often go through on days that get called `black', much levelling does happen on the financial front, after which people have to pick from the rubbles and get started once again.

Quanto Financial Technology on www.equanto.com explains `indexing' as ``the process of tying wages, taxes, social benefits payments, prices, interest rates or loan values to a an economic index, usually of prices.'' For instance, the Government notifies for every year the cost inflation index, for the purpose of computing long-term capital gains on sale of assets.

The first meaning of index, on Merriam-Webster Online Dictionary, is "a device (as the pointer on a scale or the gnomon of a sundial) that serves to indicate a value or quantity." Etymology is traced to Latin indic-, index, from indicare to indicate. The word `indicate' has this to say about the origin: "Latin indicatus, past participle of indicare, from in- + dicare to proclaim, dedicate — more at diction."

Online Etymology Dictionary timelines diction as 1542, and traces the word to Latin dictionem. Latin dicere means `speak, tell, say,' and it is related to dicare `proclaim, dedicate.' Sanksrit dic- `point out, show,' Greek deiknynai `to prove,' and so forth are cited as relevant for the birth of the word.

"Teacher `one who teaches' emerged circa 1300; it was used earlier in a sense of `index finger' (circa1290)," educates www.etymonline.com. An elaborate entry for index dates the word at 1,398. Latin index `forefinger, pointer, sign, list,' literally meant `anything which points out.' Index as `list of a book's contents' is from 1580. "The verb meaning `compile an index' is from 1720. Scientific sense (refractive index, etc.) is from 1829; economic sense (cost-of-living index, etc.) is after 1886. The Church sense of `forbidden books' is from index librorum prohibitorum, first published 1564 by authority of Pius IV."

One of the meanings of index, on Encarta, is "an indicator or sign of something." The flattering index of a direful pageant, says Queen Margaret in King Richard III. The best index to a person's character is how he treats people who can't do him any good, and how he treats people who can't fight back, says Abigail Van Buren. "There is no index of character so sure as the voice," is a quote of Benjamin Disraeli. And to Cyril Connolly, the true index of a man's character is the health of his wife. Is vice versa also true?

"The first documented case of an illness in an epidemiologic study," is `index case', says http://encarta.msn.com. Forefinger, or the finger next to the thumb, is `index finger'. Fund that follows markets is called `index fund'. Option contract whose payoff depends on the value of a stock index is called `index option'.

"Indexes measure the ups and downs of stock, bond, and some commodities markets, in terms of market prices and weighting of companies in the index," states a financial glossary to www.bloomberg.com. "First compiled in 1986, Sensex is a basket of 30 constituent stocks representing a sample of large, liquid and representative companies," informs www.bseindia.com about `the barometer of Indian capital markets'. The base year of Sensex is 1978-79 and the base value is 100. At the close of trading on Thursday, it stood at 10,656.

Institutional Data Exchange is INDEX, according to www.acronymfinder.com. Integrated Nuclear Data Exchange is another expansion of the acronym, on www.acronymattic.com. For the lay investors, everything seems as dangerous as nuclear reaction when the ticks firing off at the peak of trading action don't convey any clear message. Not so to the experts. For, they'd to see the shape of things to come, the way Nestor tells Ulysses in Troilus and Cressida: "In such indexes, although small pricks to their subsequent volumes, there is seen the baby figure of the giant mass of things to come at large." Or, at least, so they'd profess.

ComingToTerms@TheHindu.co.in

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