Closing of the Nikkei 225 index on February 20

Session without major changes for the Nikki 225which closed on Monday February 20 with a variant of the 0%until the 27,512.01 dots. He Nikki 225 scored a maximum volume of 27,531.52 points and a minimum of 27,426.48 dots. The trading range for the Nikki 225 between its highest point and its lowest point (maximum-minimum) during this day, it was at the 0.38%.

Compared to the last seven days, the Nikki 225 accumulates an increase of 0.31%; Despite this, last year it still maintains a drop in 0.66%. He Nikki 225 is located at 0.67% below its maximum this year (27,696.44 points) and a 6.98% above its minimum price so far this year (25,716.86 points).

Stock market indices… What for?

a stock market index is an indicator that measures the change in value of a given set of assetsfor which it takes data from different companies or sectors of a market fragment.

These indicators are mainly used by the stock markets of various countries and each of them can be integrated by firms with specific characteristics such as having a similar market capitalization or belonging to the same type of company, furthermore, 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 the company. Generally, 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 humanity there are various indices and They can be grouped according to their location, sectors, company size or type of assetFor example, the U.S. Nasdaq index is made up of the 100 largest companies with broad technology connections 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 incorporates it. This is obtained by multiplying the daily 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 disclosed every three or six months, as the case may be.

Reading a stock market index also means observing its evolution over time. New indices always appear with a fixed value based on stock prices on their start date, but not everyone follows this method. It can therefore be a source of misunderstanding.

If one index gains 500 points in one day, while another only gains 20, it may seem that the former has performed better. But, if the first started the day at 30,000 points and the other at 300, we can deduce that in terms of percentage, the gains of the second were considerable.

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, we must not forget 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 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 Asiawe have the Nikki 225, made up of the 225 largest companies on the Tokyo Stock Exchange. There is also the SSE composite index, which can be considered China’s preeminent, consisting of the most relevant companies on the Shanghai Stock Exchange. The same role played by 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.

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.