Start of the ascent day for the FTSE MIB IDXwhich opens the day on Thursday, April 14 with slight increases in 0,22%until the 24,776.42 points, after the start of the opening session. Comparing this data with that of days past, the FTSE MIB IDX adds two sessions in a row in positive.
Taking into account the last week, the FTSE MIB IDX records a rise in 1,95%so in year-on-year terms it still accumulates a rise of 1,6%. The FTSE MIB IDX stands a 12,02% below its maximum this year (28,162.67 points) and a 11,81% above its minimum valuation so far this year (22,160.28 points).
Stock market indices… for what?
a stock index is an indicator used to show the evolution of the value of a given set of assetsfor which it uses data from different companies or sectors of a fragment of the market.
These indicators are mainly used by the stock exchanges of the countries 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 consider 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, equity costs will tend to fall.
They also work to measure the performance of an asset manager and they allow investors to make a comparison 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. 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
Currently in humanity there are various indices and they can be grouped according to their geography, 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 a stock index measured?
Each stock index has its own way of calculating, 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.
Listed firms are required to present a balance of its composition. This report must be made public every three or six months, as the case may be.
Reading a stock index also implies being careful of its variations over time. Current 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 confusing.
If one index grows 500 points in a day, while another only adds 20, it might appear that the first index outperformed. But, if the former started the day at 30,000 points and the other at 300, it follows that, in percentage terms, the gains for the latter were larger.
What are the main stock indices?
Between the main stock indices in the American Union There is the Dow Jones Industrial Average, better known as Dow Jones, made up of 30 companies. Similarly, the S&P 500, comprising 500 of the largest companies on the New York Stock Exchange. Lastly, do not forget the Nasdaq 100which brings together 100 of the largest non-financial firms.
On the other hand, the most outstanding indices of Europe are the Eurostoxx 50, which covers the 50 largest companies in the eurozone. On the other hand, 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. There is also the SSE Composite Index, which appears as the preponderant of 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 prestigious firms of the Mexican Stock Exchange (BMV). At least a third of them are part of the estate 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 ITSELF From Chile; the IGBC of Bogota; the IBC of Caracas, made up of 6 companies from Venezuela.
Likewise, 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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