NASDAQ Composite

What is the NASDAQ Composite Index?

In simple words, the NASDAQ Composite Index is a broad market stock index. It tracks almost all securities listed on the NASDAQ stock exchange in the US. This index includes over 3000 companies across multiple sectors, especially the technology sector, communication services, consumer discretionary, and healthcare firms.

How Does the NASDAQ Composite Work?

The NASDAQ Composite measures the combined price performance of all eligible securities that are listed on the NASDAQ exchange. The index value moves in accordance with the value of stock prices. If the stock prices rise or fall, the index value also changes, consequently.

Since the index is market-capitalisation weighted, companies that have greater market value also have greater influence on its direction compared to smaller companies. This makes it a key real-time indicator of the overall performance of the NASDAQ market.

How is the NASDAQ Composite Calculated?

The NASDAQ Composite is calculated with the help of a market capitalisation-weighted methodology. This means that every company’s influence on the index is dependent on its overall market value.

One can determine a company’s market capitalisation by multiplying its share price by the number of outstanding shares. The combined market value is then divided by the proprietary index divisor, periodically adjusted to account for stock splits, de-listings, and mergers.

NASDAQ Composite Constituents

The constituents of the NASDAQ Composite are spread across various sectors, making it one of the broadest equity indices globally. The constituents of the NASDAQ Composite are given below:

Types of Securities:

• Common stocks
• American Depositary Receipts
• Real-Estate Investment Trusts
• Limited Partnership interests
• Tracking stocks

Instruments Excluded:

• Exchange-traded funds
• Closed-end funds
• Derivatives

Factors Affecting NASDAQ Composite Index Performance

The movement of the NASDAQ Composite is influenced by global economic conditions and sector-specific developments. Here are some:

• Inflation and Interest Rates: Growth stocks are usually pressured by increasing interest rates and continuous inflation. Whereas stable or decreasing rates support valuations.
• International Economic Situations: Growth trends are greatly influenced by factors such as geopolitical events, strong global growth trends, and recession fears.
• Corporate Income: Index movement is increasingly driven by strong and weak results from major technology and growth companies.

Why the NASDAQ Composite Matters for Indian Investors?

Since the NASDAQ Composite provides exposure to some of the world’s leading technology and growth-driven companies, it is closely followed by Indian investors. The index plays a role as an important indicator of future-oriented sectors that may later be completely represented by the Indian market. These sectors usually involve cloud computing, digital platforms, artificial intelligence, and semiconductors.

You can also geopolitically diversify your portfolio by investing with reference to the NASDAQ Composite. Tracking the index offers important insights into global sentiments, currency movements, and international wealth creation for long-term investors.

NASDAQ Composite Market Timings & Holidays

• Opens: 9:30 am Eastern Time Zone
• Closes: 4:00 pm Eastern Time Zone

However, you must note that NASDAQ is moving toward 23-hour trading later in 2026. This will significantly expand its access.

Extended Hours Trading

There are also pre-market and after-hours trading sessions available, also known as Extended Markets.

For Nasdaq, pre-market trading hours are 4:00 am to 9:30 am Eastern Time Zone. After-hours runs from 4:00 pm to 8:00 pm, Eastern Time Zone. Certain brokers have different pre-market and after-hours trading times.

Some online brokers do allow you to trade during those hours. The volatility tends to be much higher, and there is less liquidity, meaning that fewer people are trading and that prices tend to move much more dramatically.

Holidays

• New Year’s Day
• Martin Luther King Jr. Day
• Presidents’ Day
• Good Friday
• Memorial Day
• Juneteenth National Independence Day
• Independence Day
• Labor Day
• Thanksgiving Day
• Christmas Day

How to Invest in the NASDAQ Composite Index from India?

As an Indian investor, you cannot invest directly in the NASDAQ Composite Index. So, here are ways you can invest in it:

• Investments via International Mutual funds are a good way of investing in the US markets.
• Investing through Global ETFs that track NASDAQ indices. These can be accessed through global investment platforms.
• You can open an overseas trading account under the RBI’s LRS to invest in US stocks.
• Invest through domestic funds that invest in NASDAQ tracking funds.

Taxation On NASDAQ Composite Investments For Indian Investors

Here is what you must know about how your NASDAQ Composite investments would be taxed in India:

• The short-term capital gains: The foreign equities or ETFs sold within 24 months are taxed based on the investor's income slab.
• The long-term capital gains: In case your investments are held for more than 24 months, the gains are taxed at 12.5% without indexation benefits.
• Double Taxation Relief: Gains from the NASDAQ Composite often get taxed twice, both in India and the US, especially when it comes to dividends. In such a case, the government of India allows you to claim a Foreign Tax Credit under Sections 90 and 91 of the Indian Income Tax Act. You can file for the same by filling Form 67 before filing your income tax return.

Factors To Consider Before Trading Or Investing In The NASDAQ Composite

Here are a few things you must consider:

• Fluctuation between the US dollar and the Indian rupee can affect the return even if the investment performs well.
• Since the index is more focused on technology and growth-prioritised companies, it may lead to greater volatility in comparison to diversified global indices.
• The US equity markets are greatly influenced by interest rate changes, geopolitical developments, and global economic events.
• Long-term investors who can tolerate short-term price fluctuation are best suited for the NASDAQ Composite.