Bearish session for the FTSE MIB IDXwhich opens the session on Thursday June 23 with falls of the 1,25%until the 21,515.33 points, after the start of the opening session. Comparing this data with that of previous days, the FTSE MIB IDX chains two successive days in negative digits.
Taking into account the last week, the FTSE MIB IDX recorded a decrease in 0,97%so in year-on-year terms it still accumulates a decrease of 14,29%. The FTSE MIB IDX stands one 23,6% below its maximum so far this year (28,162.67 points)
Stock market indices… for what?
a stock index is an indicator that measures the evolution of the price of a given set of assetsfor which it uses data from various companies or sectors of a fragment of the market.
These indicators are mainly used by the stock markets of various nations and each of them can be integrated by firms with specific characteristics such as having a similar market capitalization or belonging to the same industry, likewise, 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 costs tend to fall.
They also work to measure the performance of an asset manager and allow a comparison to be made between profitability 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. He looked carefully at 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 there are various indices and they can be grouped according to their location, the sectors, the size of the companies or also the type of assetFor example, the US Nasdaq index is made up of the 100 largest companies mostly 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 calculation method, but the main component is the market capitalization of each company that integrates it. This is obtained by multiplying the value of the day of the action in the corresponding stock market by the total number of shares that are in the hands of investors.
Firms listed on the stock exchange are required to present a balance of its composition. This report must be delivered every three or six months, as appropriate.
Reading a stock index also implies noticing its changes over time. New indices always start with a fixed value based on the prices of the securities 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 only adds 20, it might appear that the first index outperformed. However, if the former started the day at 30,000 points and the other at 300, it can be assumed that, in percentage terms, the gains for the latter were more important.
These are the main stock indices
Between the major US stock indices There is the Dow Jones Industrial Average, better known as Dow Jones, made up of 30 companies. Similarly, the S&P 500, which includes 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 outstanding 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 35of the Spanish stock market.
In Asiathe main stock indices are the Nikkei 225, made up of the 225 largest companies on the Tokyo Stock Exchange. Also, the SSE Composite Index, is seen as the most notable 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 the Latin American regionyou have the IPCwhich contains at 35 most influential 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.
Also, there are other types of global stock 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 100made up of the 100 most powerful multinational firms on the planet.
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