South Korea’s main index closed in negative territory on April 27

South Korea’s main index closed in negative territory on April 27

Adverse session for KOSPI which ended the session on Wednesday, April 27, with notable decreases in 1,1%until the 2,639.06 points. The KOSPI reached a maximum volume of 2,641.82 points and a minimum volume of 2,615.50 points. The trading range for KOSPI between its highest point and its lowest point (maximum-minimum) during this day stood at 1%.

In relation to the last seven days, the KOSPI recorded a decrease in 2,93%which is why for a year it still maintains a decrease in 18,06%. The KOSPI stands one 11,71% below its maximum this year (2,989.24 points) and a 0,94% above its minimum price for the current year (2,614.49 points).

Stock market indices… for what?

a stock index is an indicator used to show the evolution of the price of a certain set of assetsfor which it collects data from different companies or sectors of a part of the market.

These indicators are mainly used by the stock markets of various nations and each of them can be integrated by companies with certain characteristics such as having a similar market capitalization or belonging to the same industry, 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. If investors lack confidence, stock values ​​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

Today 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 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 component is the market capitalization of each firm 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 hands of the investors.

Companies listed on the stock exchange are required to present a balance of its composition. Said report must be notified every three or six months, as the case may be.

Reading a stock index also requires examining its evolution over time. Current indices always open with a fixed value based on security prices on your start date, but not everyone follows this method. Therefore, it can be a source of misunderstandings.

If one index adds 500 points in a day, while another only achieves 20, it might seem that the first index performed better. 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 more important.

These 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, which is made up of 30 companies. Similarly, the S&P 500, which includes 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 important indices of Europa are the Eurostoxx 50, which covers the 50 largest companies in the eurozone. He too 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 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 can be considered the most representative of China, made up of the most prominent 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 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 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.

Samuel Edwards
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