Opening session on the rise for the IBEX 35which begins on Tuesday June 21 with ascents of the 0,66%until the 8,340.53 points, after the start of the opening session. Analyzing this data with that of previous days, the IBEX 35 chains three consecutive dates in positive figures.
In relation to the profitability of the last seven days, the IBEX 35 notes an increase in 3,4%; however, for a year it has still maintained a decrease in 6,43%. The IBEX 35 stands one 6,64% below its maximum this year (8,933.60 points) and a 9,1% above its minimum price so far this year (7,644.60 points).
Stock market indices… for what?
a stock index It is an indicator that shows how the price of a certain set of assets changesso you need to have data from different companies or sectors of a market fragment.
These indicators are mainly used by the stock exchanges of the countries and each of them can be integrated by companies with different specificities 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 company shares. If investors lack confidence, share prices 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 They can be grouped according to their geographical location, the sectors, the size of the companies or also 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 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 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 be notified every three or six months, as appropriate.
Reading a stock index also requires observing its evolution over time. New indices always start with a fixed value based on the prices of the securities on your start date, but not everyone follows this method. Therefore, it can be confusing.
If one index gains 500 points in one 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 considerable.
These 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., the S&P 500, which includes 500 of the largest companies on the New York Stock Exchange. Finally comes the Nasdaq 100which links 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 prominent 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 Asiathe main stock indices are the Nikkei 225, made up of the 225 largest companies on the Tokyo Stock Exchange. 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 region you have the IPC which contains at 35 most consolidated 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 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 America which 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.
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