The IBEX 35 falls 0.42% after opening on May 2

Negative day for him IBEX 35which opens on Monday, May 2, with slight drops in 0,42%until the 8,547.80 points, after opening. In relation to the variations of this day with respect to past dates, the IBEX 35 short with the positive streak of market prices of the last three days.

In the last seven days, the IBEX 35 marks a drop in 0,31%for this reason, in year-on-year terms, there is still a decrease in 5,65%. The IBEX 35 stands one 3,81% below its maximum this year (8,886.20 points) and a 11,81% 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 the evolution of the price of a certain set of assets for which it uses data from various companies or sectors of a fragment of the market.

These indicators are mainly used by the stock exchanges of each country and each of them can be integrated by firms with specific requirements such as having a similar market capitalization or belonging to the same type of industry, also, 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 shares of an entity. Generally, if investors lack confidence, stock costs tend to fall.

They also work to measure the performance of an asset manager and allow investors to make a comparison 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 there are various indices and they can be grouped according to their geography, sectors, company size or type of asset For 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 to read an index?

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 bond 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 delivered every three or six months, as appropriate.

Reading a stock index also implies observing its changes over time. Current indices always appear with a fixed value based on security prices on your start date, but not everyone follows this method. Therefore, it can be confusing.

If one index rises 500 points in one day, while another only adds 20, it might appear that the former outperformed. However, if the former started the day at 30,000 points and the other at 300, it can be assumed that, in percentage terms, the gains for the latter were larger.

These are the main stock indices

Between the major US stock indices There is the Dow Jones Industrial Average, better known as Dow Jones, of which 30 companies are part. Similarly, the S&P 500, which includes 500 of the largest companies on the New York Stock Exchange. Lastly, appears the Nasdaq 100which associates 100 of the largest non-financial firms.

On the other hand, the most outstanding 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 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. There is also the SSE Composite Index, is seen as the most representative 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 Latin America you have the IPC which contains at 35 most powerful 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 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.