ATX starts its session in negative territory this February 22

Bearish session for the ATXwhich starts on Wednesday, February 22 with slight drops in 0.79%until the 3,460.41 dots, after opening. By analyzing these data with those of the previous days, the ATX add up four consecutive sessions in red.

Considering last week, the ATX marks a decrease of 0.22%; On the contrary, last year, it still maintains an increase in the 2.11%. He ATX is located 1.16% below its maximum this year (3,500.85 points) and a 9.52% above its floor rate for the current year (3,159.71 points).

What is a stock index and what is it used for?

a stock market index It is an indicator used to show the evolution of the price of a set of assets.for which it takes data from several companies or sectors of a part 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 companies with specific requirements like having a similar market capitalization or belonging to the same type of company, likewise there are some indices that only consider a handful of stocks to determine their value or others that consider hundreds of stocks.

Stock market indices serve as indicator of confidence in stock market, business confidence, health of national and global economy and stock investment performance and shares of a 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 allow investors to compare 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 study how company stocks tended to rise or fall together, he created two indices: one that contained the 20 largest railway companies (as it was the largest industry at the time) , as well as 12 shares of other types of companies

Currently, in our economy, there are various indices and They can agglomerate according to their location, sectors, company size or even type of assetFor 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 it calculated and how to read them?

Each stock index has its own calculation method, but the main component is the market capitalization of each firm that integrates it. This is obtained by multiplying the value of the security on the corresponding stock market by the total number of shares outstanding 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 variations 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, it can be misleading.

If one index increases by 500 points in one day, while another adds only 20, it may seem that the first has outperformed. However, if the first started the day at 30,000 points and the other at 300, it can be concluded that in percentage terms the gains of the second were more remarkable.

These are the main stock market indices

Between the major US stock indices is the Dow Jones Industrial Average, better known as the Dow Jones, made up of 30 companies. Likewise, the S&P500, which includes 500 of the largest companies on the New York Stock Exchange. Finally comes the Nasdaq 100that connects 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. Moreover, the DAX 30, the main German index containing the most important companies of 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 continentthe main stock market indices are the Nikki 225, made up of the 225 largest companies on the Tokyo Stock Exchange. There is also the SSE composite index, is considered the strongest in China, consisting 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 consolidated companies on the Mexican Stock Exchange (BMV). At least a third of them belong to the capital of 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.

Finally, 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.