Stock Markets Around the World

NYSE, NASDAQ, LSE — what exchanges are and how they differ

7 min read Beginner

"When people say "the market is up today" they are usually talking about the S&P 500. But there are dozens of stock exchanges around the world, each with its own rules, listed companies, and index. Here is what you actually need to know."

For educational purposes only. Nothing in this chapter is financial advice. All figures are illustrative examples. Tax rules, account types, contribution limits, and regulations differ by country and change over time. Always verify current rules with official government sources or a qualified financial adviser before making any investment decisions.

What Is a Stock Exchange?

A stock exchange is a regulated marketplace where buyers and sellers come together to trade shares in listed companies. It provides the infrastructure: matching orders, setting prices, enforcing rules, and providing transparency. Without an exchange, buying and selling shares would be like trying to sell a car with no classified ads, no dealer network, and no standardised contract.

Exchanges do not own the companies listed on them. They provide the venue. A company that wants to list (an IPO — initial public offering) must meet the exchange's requirements for financial reporting, corporate governance, and minimum size. Once listed, anyone with a brokerage account can buy or sell shares during market hours.

The Major Exchanges

Exchange	Location	Index	Known for
NYSE	🇺🇸 New York	Dow Jones, S&P 500	Largest by market cap. Old economy stocks — banks, industrials, consumer goods.
NASDAQ	🇺🇸 New York	NASDAQ Composite	Technology-focused. Apple, Microsoft, Alphabet, Meta, Amazon all list here.
LSE	🇬🇧 London	FTSE 100, FTSE 250	UK and international companies. Strong in financials, energy, mining.
Euronext	🇪🇺 Amsterdam/Paris	CAC 40, AEX	Largest European exchange. Luxury goods, energy, banking.
TSE (Tokyo)	🇯🇵 Tokyo	Nikkei 225, TOPIX	Third largest by market cap. Manufacturing, automotive, electronics.
HKEX	🇭🇰 Hong Kong	Hang Seng	Gateway for Chinese company listings accessible to foreign investors.
SSE / SZSE	🇨🇳 Shanghai/Shenzhen	CSI 300	Chinese mainland exchanges — restricted access for foreign investors.

What Indices Actually Measure

An index is a list of selected companies, combined into a single number that tracks their collective performance. When the news says "the FTSE 100 is up 0.4% today," it means the collective market capitalisation of the 100 largest UK-listed companies rose 0.4%.

S&P 500

500 largest US companies by market cap. The most widely tracked index in the world. Weighted by market cap — Apple, Microsoft, and NVIDIA are the biggest influences.

FTSE 100

The 100 largest companies listed on the London Stock Exchange. Many are multinational — Shell, HSBC, AstraZeneca earn most revenue outside the UK.

NASDAQ 100

The 100 largest non-financial companies on NASDAQ. Heavily technology-weighted — Apple, Microsoft, Alphabet, Meta, Amazon make up over 40%.

Nikkei 225

225 large Japanese companies, selected by the Nikkei newspaper. Price-weighted (like the Dow), not market cap weighted.

MSCI World

Over 1,500 large and mid-cap stocks across 23 developed countries. The benchmark for global diversification.

Questions People Actually Ask

Can I buy shares on any exchange from the UK?

Most online brokers give UK investors access to UK (LSE), US (NYSE, NASDAQ), and sometimes European and other international exchanges. US shares are the most commonly accessible. To buy on exchanges in Japan, China, or less common markets, you often need a specialist broker or an ETF that holds those shares.

What is the difference between NYSE and NASDAQ?

Both are US exchanges, but they differ in structure and listing requirements. NYSE is older (founded 1792), auction-based, and tends to attract older, more established companies. NASDAQ is electronic (founded 1971), has lower listing requirements, and became the home of technology companies. Many companies choose which exchange to list on — Microsoft listed on NASDAQ, while Berkshire Hathaway and JPMorgan are on NYSE.

Why does the FTSE 100 not reflect the UK economy?

Because many FTSE 100 companies earn most of their revenue internationally. Shell earns globally from oil. HSBC earns mostly in Asia. AstraZeneca sells pharmaceuticals worldwide. When the pound falls, FTSE 100 companies with foreign currency earnings often rise, because those earnings are worth more in sterling. The FTSE 100 is a global earnings index that happens to list in London.

What is market capitalisation weighting?

Most major indices are market-cap weighted, meaning larger companies have more influence on the index. In the S&P 500, Apple (market cap ~$3 trillion) influences the index far more than a company valued at $10 billion. A 5% rise in Apple moves the S&P 500 more than a 30% rise in a small component. This means major indices are inherently concentrated in the largest companies.

What is an OTC market?

Over-the-counter (OTC) markets are where securities are traded directly between parties without going through a formal exchange. Smaller companies that do not meet exchange listing requirements often trade OTC. OTC markets have less regulation, less transparency, and lower liquidity. They are riskier and generally not suitable for beginner investors.

Key Takeaways

A stock exchange is a regulated marketplace — it provides the infrastructure for buying and selling, not ownership of the companies listed on it.
The largest exchanges: NYSE and NASDAQ (US), LSE (UK), Euronext (Europe), Tokyo Stock Exchange (Japan).
An index tracks a selected group of companies — the S&P 500 tracks 500 large US companies, the FTSE 100 tracks the 100 largest UK-listed companies.
Most indices are market-cap weighted, meaning the largest companies have the most influence on the index level.
The FTSE 100 is a global earnings index — many of its companies earn revenue internationally, not primarily in the UK.