Above all, analysis of indices is used to analyze the overall state of the economy. An index is a non-dimensional value that tells us what’s happening with a certain number of shares included in this index (base).
Very often, when a country's economy slows down (a recession begins), the country's key indices start to decline because an economic slowdown can badly affect most companies included in the index.
Analysis of indices is in many ways similar to analysis of the currency market, where the macroeconomic indicators of countries are assessed.