The calculation of most indices is based on the market capitalisation of the organisations that
comprise that index. In this instance, the larger cap firms have greater weight, so their
performance will have a more significant impact on the value of the index than the companies
with a lower market capitalisation.
But there are some global indices that are weighted by the price of a company’s shares. So,
the performance of those businesses with a higher share price has a greater bearing on the index
than those whose share prices are lower.