BSE Sensex 30 opened with an upward trend on February 20

Opening session of the hikes for the BSE Sensex 30which begins the session on Monday, February 20 with slight increases in 0.22%until the 61,138.21 points, after the start of the opening session. By analyzing these data with those of the previous days, the BSE Sensex 30 it reverses the roles compared to that of the day before, in which it marked a drop of 0.07%, demonstrating that it is unable to establish a definitive trend in recent dates.

Last week the BSE Sensex 30 mark a rise 1.17%so that a year ago it still accumulates a rise of 5.15%. He BSE Sensex 30 is located 0.3% below its maximum this year (61,319.51 points) and a 3.05% above its minimum valuation so far this year (59,330.90 points).

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

a stock market index It is an indicator that is used to know the evolution of the value of a certain set of assets.for which it takes data from several companies or sectors of a market fragment.

These indicators are mainly used by stock exchanges in various countries and each of them can be integrated by companies with different specificities like having a similar market capitalization or belonging to the same type of industry, moreover, there are 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 a company. Generally, if investors are not confident, stock values ​​tend to fall.

They are also working to measure the performance of an asset manager and they 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 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

Today there are various indices and They can join a union depending on their geographical location, their sectors, the size of the companies or the type of asset.For 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 company that incorporates it. This is obtained by multiplying the daily value of the share 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 published every three or six months, as the case may be.

Reading a stock market index also means observing its evolution over time. Current indices always open at 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 sees an increase of 500 points in one day, while another only gets 20, it may seem that the former has performed better. However, if the first started the day at 30,000 points and the other at 300, we can deduce that in percentage terms the gains for the second were greater.

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 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. On the other hand, the DAX 30, the main German index containing the most outstanding 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 continentthe main stock market indices are the Nikki 225, made up of the 225 largest companies on the Tokyo Stock Exchange. Also SSE composite index, which is listed as the most representative of China, consisting of the most important companies of 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 Outstanding Companies on the Mexican Stock Exchange (BMV). At least a third of them are part of the estate 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.

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.