The Indian market started operations losing ground this June 13

The Indian market started operations losing ground this June 13

Bad day for him Nifty 50 which begins the session on Monday, June 13, with large drops in 2%until the 15,877.55 points, after the start of the opening session. Compared to previous dates, the Nifty 50 adds two successive sessions in red.

In reference to the profitability of the last seven days, the Nifty 50 marks a drop in 4,18%; but in the last year he still maintains a rise of 0,87%. The Nifty 50 stands one 13,28% below its maximum this year (18,308.10 points) and a 0,6% above its minimum valuation for the current year (15,782.15 points).

Stock market indices… for what?

a stock index is an indicator that shows how the value of a set of assets changes for which it takes data from several 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 firms with different specificities such as having a similar market capitalization or belonging to the same type of 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, share prices will tend to fall.

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

Each stock index has its own way of calculating, 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 action in the corresponding stock market by the total number of shares that are in the hands of investors.

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

Reading a stock index also requires noticing its variations 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 lead to failures.

If one index sees a 500-point increase in one day, while another only gains 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 higher.

What are the main stock indices?

Between the major US stock indices 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 100 which links 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 containing the strongest 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 the asian continent the 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 can be considered the most notable 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 Latin America you have the IPC which contains at 35 most outstanding 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.

Also, 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.

Samuel Edwards
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