Opening session of slight movements for the FTSE MIB IDX which begins the session on Monday June 20 with a variation of 0,12%until the 21,815.40 points, after opening. Compared to previous sessions, the FTSE MIB IDX accumulates two successive sessions in positive figures.
In relation to the profitability of the last seven days, the FTSE MIB IDX recorded a decrease in 0,47% and in the last year it still maintains a decrease of 14,48%. The FTSE MIB IDX stands one 22,54% below its maximum so far this year (28,162.67 points) and a 0,41% above its minimum valuation for the current year (21,726.64 points).
Stock market indices… for what?
a stock index is an indicator that measures the evolution of the value of a given set of assets so 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 the countries and each of them can be integrated by signatures with certain characteristics such as having a similar market capitalization or belonging to the same type of business, in addition, 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 shares of an entity. Generally, if investors lack confidence, equity costs will 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 in our economy there are various indices and they can be grouped according to their geographical location, sectors, company size or also the type of asset For 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 a stock index measured?
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 title in the corresponding stock market by the total number of shares that are in the market.
Companies listed on the stock exchange are required to present a balance of its composition. Said report must come to light every three or six months, as the case may be.
Reading a stock index also implies analyzing its changes over time. Current indices always open with a fixed value based on stock prices on your start date, but not everyone follows this method. Therefore, it can lead to failures.
If one index sees a 500-point increase in one day, while another only gains 20, it might seem like the first index outperformed. But, if the former started the day at 30,000 points and the other at 300, it can be concluded that, in percentage terms, the gains for the latter were considerable.
What 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. Also, the S&P 500, which includes 500 of the largest companies on the New York Stock Exchange. Finally comes the Nasdaq 100 which associates 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 35 of the Spanish stock market.
In Asiawe 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 representative of China, made up of the most prominent companies on the Shanghai Stock Exchange. Similarly, it is worth mentioning the Hang Seung Index in Hong Kong and the KOSPI in South Korea.
Talking about Latin America you have the IPC which contains at 35 most consolidated firms of the Mexican Stock Exchange (BMV). At least a third of them are owned by magnate 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.