Good opening for FTSE MIB IDX which opens the session on Friday, July 8, with slight increases in 0,22% until the 21,605.32 points, after the start of the opening session. Analyzing this data with that of previous dates, the FTSE MIB IDX adds three successive sessions on the rise.
In the last seven days, the FTSE MIB IDX scores a raise of 1,17%; however, for a year there has still been a decline in 13,15%. The FTSE MIB IDX stands one 23,28% below its maximum this year (28,162.67 points) and a 4,35% above its minimum price so far this year (20,705.06 points).
What is a stock index and what is it for?
a stock index It is an indicator that is used to know the evolution of the price of a certain set of assets.for which you need to have data from different companies or sectors of a part of the market.
These indicators are mainly used by the stock exchanges of each country and each of them can be integrated by firms with specific requirements such as having a similar market capitalization or belonging to the same type of industry, also, there are some indices that only take into account a handful of shares to determine their value or others that consider hundreds of shares.
Stock market indices serve as indicator of confidence in the stock market, business confidence, the health of the national and global economy and the performance of investments in shares and company shares. If investors lack confidence, stock values tend to fall.
They also work to measure the performance of an asset manager and allow investors to make a comparison between return and risk; measure the opportunities of a financial asset or create portfolios.
This type of indicators began to be used at the end of the 19th century after journalist Charles H. Dow. carefully analyzed how company stocks tended to go up or down together in price, so he created two indices: one containing the top 20 railroad companies (since it was the biggest industry at the time), as well as 12 actions of other types of businesses
Today in our economy there are various indices and they can be grouped based on their geographical location, sectors, company size or type of assetFor example, the US Nasdaq index is made up of the 100 largest companies largely 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 is it calculated and how to read them?
Each stock index has its own way of calculating, but the main factor is the market capitalization of each company that integrates it. This is obtained by multiplying the value of the day of the security in the corresponding stock market by the total number of shares that are in circulation in the market.
Companies listed on the stock exchange are required to present a balance of its composition. Said report must be disclosed every three or six months, as appropriate.
Reading a stock index also requires observing its changes over time. New indices always start with a fixed value based on stock prices on your start date, but not everyone follows this method. Therefore, it can be misleading.
If one index gains 500 points in a day, while another gains only 20, it might appear that the first index outperformed. But, if the first one started the day at 30,000 points and the other one at 300, it can be deduced that, in percentage terms, the gains for the second one were higher.
These are the main stock indices
Between the major US stock indices There is the Dow Jones Industrial Average, better known as Dow Jones, which is made up of 30 companies. Also, the S&P 500, comprising 500 of the largest companies on the New York Stock Exchange. Lastly, appears the Nasdaq 100which brings together 100 of the largest non-financial firms.
On the other hand, the most important indices of Europa are the Eurostoxx 50, which covers the 50 largest companies in the eurozone. In addition, the DAX 30, the main German index containing the strongest companies on the Frankfurt Stock Exchange; the FTSE 100 from the London Stock Exchange; the CAC 40 of the Paris Stock Exchange; and the IBEX 35 of the Spanish stock market.
In the asian continent we have the Nikkei 225, made up of the 225 largest companies on the Tokyo Stock Exchange. There is also the SSE Composite Index, is seen as the most solid in China, made up of the most relevant companies on the Shanghai Stock Exchange. The same role played by Hang Seung Index in Hong Kong and the KOSPI in South Korea.
Talking about Latin Americayou have the IPCwhich contains at 35 most powerful firms of the Mexican Stock Exchange (BMV). At least a third of them belong to the capital of tycoon Carlos Slim.
Another is the bovespa, made up of the 50 most important companies on the São Paulo stock exchange; the Merval from Argentina; the IPSA From Chile; the MSCI COLCAP from Colombia; the IBC of Caracas, made up of 6 companies from Venezuela.
Similarly, there are other types of global stock market indices such as the MSCI Latin Americawhich includes the 137 most important companies in Brazil, Chile, Colombia, Mexico and Peru.
Similarly, there is the MSCI World, which includes 1,600 companies from 23 developed countries; the MSCI Emerging Markets, made up of more than 800 companies from developing countries; and the S&P Global 100 made up of the 100 most powerful multinational firms on the planet.
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