The Shanghai Composite Index is one of the major stock indices in China's A-share market and is a composite stock index of the Shanghai Stock Exchange. It represents the overall market performance of all A-shares (i.e. RMB ordinary shares) on the Shanghai Stock Exchange and is one of the important indicators of China's stock market.

Founded on July 15, 1991, the SSE Composite Index adopts the free float market capitalization weighting method, that is, the free float market value of the shares of listed companies is used as the calculation base to reflect the overall market evaluation of listed companies and investor sentiment. Free float market capitalization is the product of the number of shares that can be freely traded on the market and the price, except for statutory restrictions.

The index compilation of the SSE Composite Index is very rigorous, and its constituent stocks must comply with the regulations of the SSE, including the proportion of outstanding shares, profitability, financial status, information disclosure, etc. At present, there are about 1,300 constituent stocks of the Shanghai Composite Index, covering a variety of industries, among which finance, energy, industry and other industries account for a relatively high proportion.

The changes in the Shanghai Composite Index have a great influence on the Chinese stock market, and it is widely used to measure the overall performance of the Chinese stock market and predict the direction of the market. At the same time, the Shanghai Composite Index is also one of the important indicators for the investment of many funds, insurance and other institutions.

It is worth noting that the stock market is highly volatile, and the Shanghai Composite Index is no exception, and its price is affected by a variety of factors, including macroeconomic factors, policy factors, internal company factors, etc. Therefore, investors need to fully understand the relevant risks in investment decisions, and formulate scientific investment strategies through multi-faceted information acquisition and analysis.

Overall, the Shanghai Composite Index is one of the important indicators of China's stock market, which represents the overall performance of China's A-share market. Although there are complex factors behind it that affect its performance, through investors' in-depth understanding of its laws and trends, more income can be obtained in stock market investment.