Good start to the day for IBEX 35 which begins on Thursday June 2 with slight increases in 0,37% until the 8,779.90 points, after the start of the opening session. Compared to previous days, the IBEX 35 interrupted with the negative streak of market prices of the last three sessions.
Taking into account the last week, the IBEX 35 accumulates a decrease in 1,23%for this reason in the last year there is still a decrease in 4,11%. The IBEX 35 stands one 1,72% below its maximum this year (8,933.60 points) and a 14,85% above its minimum price so far this year (7,644.60 points).
What is a stock index and what is it for?
a stock index It is an indicator that shows how the price of a given set of assets changes for which it collects 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 line 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, stock values tend to fall.
They also work to measure the performance of an asset manager and they allow investors 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 analyzed 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
Currently in our economy there are various indices and they can be associated based on their location, sectors, company size or even the type of assetFor 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 way of being measured, but the main factor 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 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 the case may be.
Reading a stock index also requires taking into account its changes over time. New indices always appear with a fixed value based on the prices of the securities on your start date, but not everyone follows this method. Therefore, it can lead to inaccuracies.
If one index gains 500 points in a day, while another only adds 20, it might appear that the first index performed better. But, 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 higher.
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. Also, the S&P 500, which includes 500 of the largest companies on the New York Stock Exchange. Lastly, do not forget the Nasdaq 100 which brings together 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. 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 Asia we 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 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 Latin Americayou have the IPC which contains at 35 most powerful 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.
Finally, 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.
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