Opening of the main Lisbon index on February 21

Opening of the day without change for the psi 20which begins the day of Tuesday, February 21 with a variation of the 0%until the 6,020.07 dots, after the start of the opening session. By analyzing these data with those of the previous days, the psi 20 chain two consecutive descending dates.

Compared to last week, the psi 20 earn a promotion 2.28%so that year-over-year, it still maintains an increase of 9.49%. He psi 20 is located at 0.36% below its maximum this year (6,041.64 points) and a 3.28% above its floor rate for the current year (5,829.15 points).

Stock market indices… What for?

a stock market index It is an indicator that shows how the value of a certain set of assets is changingfor which it uses data from different companies or sectors of a market fragment.

These indicators are mainly used by the stock markets of different countries of the world and each of them can be integrated by firms with specific characteristics like having a similar market capitalization or being in the same type of industry, there are also some indices that only consider a handful of stocks to determine their value or others that consider hundreds of stocks.

Stock indices serve as indicator of confidence in stock market, business confidence, health of national and global economy and stock investment performance and shares of the company. If investors are not confident, stock prices will tend to fall.

They are also working to measure the performance of an asset manager and they allow investors to have comparisons between profitability and risk; measure the opportunities of a financial asset or create portfolios.

These types of indicators began to be used at the end of the 19th century after the journalist Charles H. Dow. To see carefully how company stocks tended to rise or fall together in price, he therefore created two indices: one that contained the 20 largest railroad companies (since that was the largest industry at the time), as well as 12 shares of other types of companies

Today in humanity there are various indices and They can associate according to their location, their sectors, the size of the company or the type of assetFor example, the American Nasdaq index is made up of the 100 largest companies mainly related to technology such as Apple (AAPL), Microsoft (MSFT), Amazon (AMZN), Facebook (FB), Alphabet (GOOG), Tesla (TSLA ), Nvidia (NVDA), PayPal (PYPL), Comcast (CMCSA), Adobe (ADBE).

How to read an index?

Each stock index has its own calculation method, but the main component is the market capitalization of each company that incorporates it. This is obtained by multiplying the daily value of the security on the corresponding stock market by the total number of shares outstanding on the market.

Listed companies are required to present a balance sheet of its composition. This report must be issued every three or six months, as the case may be.

Reading a stock market index also requires examining its evolution over time. Current indices always start with a fixed value based on security prices on their start date, but not everyone follows this method. Therefore, it may seem misleading.

If one index sees an increase of 500 points in one day, while another only adds 20, it may seem that the former has performed better. However, if the first started the day at 30,000 points, and the other at 300, we can conclude that in percentage terms the gains for the second were greater.

What are the main stock market indices?

Between the major US stock indices is the Dow Jones Industrial Average, better known as the Dow Jones, of which 30 companies are part. Also S&P500, which includes 500 of the largest companies on the New York Stock Exchange. Finally, it should be mentioned the Nasdaq 100which includes 100 of the largest non-financial companies.

On the other hand, the most important indices of Europe are the Euro Stoxx 50, which covers the 50 largest companies in the euro area. Also DAX 30, the main German index containing the most important companies of the Frankfurt Stock Exchange; there FTSE100 the London Stock Exchange; he CAC 40 of the Paris Stock Exchange; and the IBEX 35of the Spanish stock exchange.

In the asian continentthe main stock market indices are the Nikki 225, made up of the 225 largest companies on the Tokyo Stock Exchange. There is also the SSE composite index, is considered the main in China, consisting of the most important companies of the Shanghai Stock Exchange. The same role played by the Hang Seung Index in Hong Kong and the KOSPI in South Korea.

As it concerns the Latin American regionyou have the IPCwhich contains the 35 Most Powerful Companies on the Mexican Stock Exchange (BMV). At least a third of them are part of the estate of tycoon Carlos Slim.

Another is the Bovespa, composed of the 50 most important companies of the Sao Paulo Stock Exchange; he Merval from Argentina; he IPSA From Chile; he MSCI COLCAP Columbia; he IBC of Caracas, made up of 6 companies from Venezuela.

Finally, there are other types of global stock indices such as the MSCI Latin Americawhich includes the 137 most important companies from Brazil, Chile, Colombia, Mexico and Peru.

Likewise, there is MSCI World, which brings together 1,600 companies from 23 developed countries; he MSCI Emerging Markets, made up of more than 800 companies from developing countries; and the S&P Global 100made up of the 100 most powerful multinational corporations on the entire planet.