Australian economy is experiencing unprecedented growth for the last fifteen years and the current unemployment rate is lowest in the last thirty errors. Previously, Australian economy was dominated by companies dealing with commodities, but presently Australian companies are providing services in global financial market. Though Australia is far away from Europe and The United Stated physically, but its economy is reaping the benefits of the present trend of globalization. For example, cheap import from China is fueling the spectacular growth of Australian economy for the last five years. This economic buoyancy of Australian economy is also reflected in the transactions of Australian Stock Market. For the last five years, Australian Stock Market is outperforming S&P 500 index.

Trading in stocks is going on in different parts of the world for more than a hundred and fifty years. In Australia, The first stock exchange was established in 1861. This stock exchange has now become the primary stock exchange of Australia and is known as Australian Securities Exchange or ASX in short. Today, trading on this exchange is completely electronic and it is public company which is listed on this exchange itself. To measure the market activity an index has also been developed. This index is being operated by Standard & Poors since April, 2000 and is known as S&P/ ASX 200. This index tracks top 200 companies trading on Australian Stock Market and could also be considered as index. By tracking this index, it is possible to monitor the day to day condition of Australian economy and industry.

These 200 companies are selected on the basis of a few factors. Most important factor is the Market Capitalisation of the company. The second important factor is what is known as 'Free Float'. This factor is based on the number of issued shares that are available in the market for trading. Higher the percentage of shares available for free trade, higher is its 'Free Float' factor. And another important factor is liquidity. But, the primary importance is given to market capitalization for ranking the companies in this index. Colloquially, these companies are known as 'Blue Chip' companies. This list of top 200 companies is reviewed every three months and list is modified according the performance of the companies on the stock exchange.

Therefore, anybody who would like to invest in Australian Stock Market should constantly track this ASX top 200 index to enable them earn handsomely on the stock exchange.