Stock Exchange!

Index is a weighted avg of the prices of the constituent stocks. Any index has a base year when this weighted avg is rounded to 100 (usually) So if the stock prices moves up or down it impacts index proportional to its weight age considered in particular index. Check http://www.nse-india.com/content/indices/ind_nifty.htm for precise information on one of the most popular Indian Index "NIFTY".

Its not points, its index price or stock price. Stock Prices change every day as a result of market forces. By this we mean that share prices change because of supply and demand. If more people want to buy a stock (demand) than sell it (supply), then the price moves up. Conversely, if more people wanted to sell a stock than buy it, there would be greater supply than demand, and the price would fall. The price of a stock doesn't only reflect a company's current value, it also reflects the growth that investors expect in the future. I think I'm making it to complicating to understand. Simply speaking, based on the Demand and supply market Index is working. Still I can go elaborate in basics of stock market. Better luck next time.