Bullish session for the Nikkei 225 which ended the day on Friday June 24 with increases of 1,23% until the 26,491.97 points. The Nikkei 225 marked a maximum volume of 26,519.16 points and a minimum volume of 26,148.56 points. The trading range for Nikkei 225 between its highest point and its lowest point (maximum-minimum) during this day stood at 1,4%.

Compared to the last week, the Nikkei 225 notes an increase in 2,04% although, on the contrary, in year-on-year terms it still maintains a decrease in 9,16%. The Nikkei 225 stands one 9,68% below its maximum so far this year (29,332.16 points) and a 7,18% above its minimum price for the current year (24,717.53 points).

What is a stock index and what is it for?

a stock index is an indicator that shows how the value of a given set of assets evolves so you need to have data from different companies or sectors of a market fragment.

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 type of business, likewise, 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. Generally, if investors lack confidence, equity costs will tend to fall.

They also work to measure the performance of an asset manager and they allow to be able to compare 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 researched how company stocks tended to go up or down in price together, so he created two indices: one containing the top 20 railroad companies (it was the biggest industry at the time), as well as 12 actions of other types of businesses

Currently in our economy there are various indices and they can be grouped according to their location, sectors, company size or even the 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 calculation method, 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 share 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. This report must be notified every three or six months, as appropriate.

Reading a stock index also implies observing its changes 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 lead to inaccuracies.

If one index adds 500 points in a day, while another only achieves 20, it might seem that the first index performed better. However, if the former started the day at 30,000 points and the other at 300, it can be deduced that, in percentage terms, the gains for the latter were more remarkable.

Major stock indices

Between the major US stock indices There is the Dow Jones Industrial Average, better known as Dow Joneswhich is made up of 30 companies., the S&P 500, which includes 500 of the largest companies on the New York Stock Exchange. Lastly, it is worth mentioning the Nasdaq 100which unites 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. On the other hand, the DAX 30, the main German index that contains the most outstanding 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 the asian continentwe 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 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 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 100made up of the 100 most powerful multinational firms on the planet.

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