The South Korean index ended the day higher on July 13

The South Korean index ended the day higher on July 13

Positive day for him KOSPI which ended the session on Wednesday, July 13, with slight increases in 0,47% until the 2,328.61 points. The KOSPI reached the peak of 2,341.19 points and a minimum volume of 2,312.49 points. The trading range for KOSPI between its highest point and its lowest point (maximum-minimum) during this day stood at 1,23%.

In reference to the profitability of the last week, the KOSPI marks a rise in 1,6% although, on the contrary, in year-on-year terms it still maintains a decrease in 29,29%. The KOSPI stands one 22,1% below its maximum this year (2,989.24 points) and a 1,6% above its minimum price so far this year (2,292.01 points).

What is a stock index and what is it for?

a stock index is an indicator used to show the evolution of the value of a given set of assetsfor which you need to have data from various companies or sectors of a part of the market.

These indicators are mainly used by the stock exchanges of various countries and each of them can be integrated by companies with certain characteristics such as having a similar market capitalization or belonging to the same industry, also, 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. Generally, if investors lack confidence, stock prices will 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

Currently there are various indices and can be aggregated based on geography, sectors, company size or even asset typeFor 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 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 market.

Companies listed on the stock exchange are required to present a balance of its composition. Said report must come to light every three or six months, as appropriate.

Reading a stock index also involves examining its changes 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 sees an increase of 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 concluded that, in percentage terms, the gains for the latter were more remarkable.

These are the main stock indices

Between the major US stock indices There is the Dow Jones Industrial Average, better known as Dow Jonesof which 30 companies are part, the S&P 500, which includes 500 of the largest companies on the New York Stock Exchange. Lastly, do not forget 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 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. Also, the SSE Composite Index, which can be considered the main one in China, made up of the most important 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 regionyou have the IPCwhich contains at 35 most influential 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 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.

Samuel Edwards
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