Day without change for the DAXwhich begins on Monday February 13 with a variation of the 0.07%until the 15,318.24 points, after opening. Regarding the changes of this day compared to past days, the DAX reverses the result of the previous session, when it closed down 0.72%, showing that it is unable to establish a definite trend in recent dates.
Looking at last week’s data, the DAX mark a decline 0.18%; On the contrary, year-on-year, it still maintains an increase of 3.99%. He DAX is located at 1.32% below its maximum this year (15,523.42 points) and a 8.88% above its floor rate for the current year (14,069.26 points).
What is a stock index and what is it used for?
a stock market index is an indicator that shows how the value of a certain set of assets is changingit therefore uses data from different companies or sectors of a market fragment.
These indicators are mainly used by the exchanges of each country and each of them can be integrated by signatures with different specificities like having a similar market capitalization or belonging to the same type of company, there are also some indices that only consider a handful of stocks to determine their value or others that consider hundreds of stocks.
Stock indices serve as indicator of confidence in stock market, business confidence, health of national and global economy and stock investment performance and shares of the company. If investors are not confident, stock prices will tend to fall.
They are also working to measure the performance of an asset manager and they allow investors to have comparisons between profitability and risk; measure the opportunities of a financial asset or create portfolios.
These types of indicators began to be used at the end of the 19th century after the journalist Charles H. Dow. To carefully analyze how company stock prices tended to rise or fall together, he created two indexes: one that contained the 20 largest railway companies (as it was the most important industry in the era), as well as 12 shares of other types of companies
There are currently various indices and they can be grouped by geographic location, industries, company size, or even asset typeFor example, the American Nasdaq index is made up of the 100 largest companies mainly 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 way of being measured, but the main factor is the market capitalization of each company that incorporates it. This is obtained by multiplying the daily value of the bond on the corresponding stock market by the total number of shares that are on the market.
Listed companies are required to present a balance sheet of its composition. This report must be submitted every three or six months, as the case may be.
Reading a stock market index also requires analyzing its evolution over time. New indices always start with a fixed value based on security prices on their start date, but not everyone follows this method. Therefore, this may lead to inaccuracies.
If one index increases by 500 points in one day, while another adds only 20, it may seem that the first has outperformed. But, if the first started the day at 30,000 points, and the other at 300, we can conclude that in percentage terms, the gains of the second were higher.
What are the main stock market indices?
Between the major US stock indices is the Dow Jones Industrial Average, better known as the Dow Jones, of which 30 companies are part. Likewise, the S&P500, which includes 500 of the largest companies on the New York Stock Exchange. Finally, it should be mentioned the Nasdaq 100which includes 100 of the largest non-financial companies.
On the other hand, the most important indices of Europe are the Euro Stoxx 50, which covers the 50 largest companies in the euro area. Also DAX 30, the main German index containing the strongest companies on the Frankfurt Stock Exchange; there FTSE100 the London Stock Exchange; he CAC 40 of the Paris Stock Exchange; and the IBEX 35of the Spanish stock exchange.
In the asian continentwe have the Nikki 225, made up of the 225 largest companies on the Tokyo Stock Exchange. Also SSE composite index, is seen as China’s preeminent, made up of the most important companies on the Shanghai Stock Exchange. Also, it is worth mentioning the Hang Seung Index in Hong Kong and the KOSPI in South Korea.
As it concerns the Latin American regionyou have the IPCwhich contains the 35 most influential companies on the Mexican Stock Exchange (BMV). At least a third of them belong to tycoon Carlos Slim.
Another is the Bovespa, composed of the 50 most important companies of the Sao Paulo Stock Exchange; he Merval from Argentina; he IPSA From Chile; he MSCI COLCAP Columbia; he IBC of Caracas, made up of 6 companies from Venezuela.
Similarly, there are other types of global stock indices such as the MSCI Latin Americawhich includes the 137 most important companies from Brazil, Chile, Colombia, Mexico and Peru.
Likewise, there is MSCI World, which brings together 1,600 companies from 23 developed countries; he 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 corporations on the entire planet.