Good opening for IBEX 35 which opens on Monday June 20 with slight increases in 0,23%until the 8,165.01 points, after opening. If we compare the figure with previous days, the IBEX 35 chain two sessions in a row in positive.
Taking into account the last week, the IBEX 35 accumulates a decrease in 0,22%for this reason, for a year now, there is still a decrease in 10,23%. The IBEX 35 stands one 8,6% below its maximum this year (8,933.60 points) and a 6,81% above its minimum valuation for the current year (7,644.60 points).
What is a stock index and what is it for?
a stock index is an indicator that measures how the price of a given set of assets evolvesfor which it collects data from different companies or sectors of a fragment of the market.
These indicators are mainly used by the stock exchanges of various countries and each of them can be integrated by companies with specific characteristics such as having a similar market capitalization or belonging to the same type of line of business, there are also 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, stock prices will tend to fall.
They also work to measure the performance of an asset manager and allow investors to have comparisons between return 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. closely watched 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 can be aggregated based on geographic location, sectors, company size, or even asset typeFor 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 bonus in the corresponding stock market by the total number of shares that are in the market.
Firms listed on the stock exchange are required to present a balance of its composition. Said report must be disclosed every three or six months, as appropriate.
Reading a stock index also implies paying attention to its changes over time. New 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 gains 500 points in a day, while another gains only 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 deduced that, in percentage terms, the gains for the latter were more remarkable.
Major 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. Finally comes 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. In addition, 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, which is listed as the main one in 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 the Latin American regionyou have the IPCwhich contains at 35 most consolidated 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.
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.