Positive opening day for the FTSE MIB IDX which begins on Thursday, June 2, with slight increases in 0,21%until the 24,335.48 points, after opening. In relation to past dates, the FTSE MIB IDX puts a stop to two consecutive days with a flat trend.
In reference to the profitability of the last seven days, the FTSE MIB IDX record a drop in 0,86%so that in the last year there is still a decrease in 5,46%. The FTSE MIB IDX stands one 13,59% below its maximum so far this year (28,162.67 points) and a 9,82% above its minimum value for the current year (22,160.28 points).
What is a stock index and what is it for?
a stock index is an indicator that shows how the price of a given set of assets changesfor which it collects data from different companies or sectors of a fragment of the market.
These indicators are mainly used by the stock markets of different countries of the world and each of them can be integrated by signatures with certain characteristics such as having a similar market capitalization or belonging to the same industry, likewise, 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. If investors lack confidence, stock costs 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. 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
Today there are various indices and They can be grouped 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 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 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 made public every three or six months, as appropriate.
Reading a stock index also requires taking into account its changes over time. Current 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 rises 500 points in a day, while another only gains 20, it might appear that the first index outperformed. But, if the first one started the day at 30,000 points and the other one at 300, it can be deduced that, in percentage terms, the gains for the second one 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, made up of 30 companies. Similarly, the S&P 500, comprising 500 of the largest companies on the New York Stock Exchange. Lastly, do not forget 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. He too 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 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, is seen as the preponderant of China, made up of the most relevant 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 Americayou have the IPCwhich contains at 35 most prestigious firms of the Mexican Stock Exchange (BMV). At least a third of them are owned by 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 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.
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