The part of a compass that surrounds a piece of glass with a short luminous line etched in its surface is called the "capsule" or "sight".

Here's a breakdown:

* Capsule: This is the general term for the entire housing that contains the compass needle and the sighting mechanism.

* Sight: This refers specifically to the glass piece with the luminous line, used for aiming and aligning the compass.

The luminous line helps with visibility in low-light conditions. It is often filled with a phosphorescent material that glows after being exposed to light.