India’s Nifty 50 index closes on February 21

Day without major changes for the Crafty 50which closed the meeting of Tuesday, February 21 with a variation of the 0.1%until the 17,826.70 points. He Crafty 50 marked the maximum number of 17,924.90 points and the minimum number of 17,800.30 points. The trading range for the Crafty 50 between its highest point and its lowest point (maximum-minimum) during this day, it was at the 0.7%.

With reference to the profitability of the last seven days, the Crafty 50 mark a decline 0.58%; although on a year-over-year basis, it still maintains an increase of 2.91%. He Crafty 50 is located at 2.23% below its maximum this year (18,232.55 points) and a 1.26% above its minimum valuation so far this year (17,604.35 points).

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

a stock market index It is an indicator that shows how the price of a set of assets is movingit therefore uses data from various companies or sectors of a market fragment.

These indicators are mainly used by the exchanges of the 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. If investors are not confident, stock prices tend to fall.

They are also working to measure the performance of an asset manager and they allow investors to make a comparison 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 see carefully how company stocks tended to rise or fall together in price, he therefore created two indices: one that contained the 20 largest railroad companies (since that was the largest industry at the time), as well as 12 shares of other types of companies

Today in humanity there are various indices and They can be grouped by geographic location, industries, company size, or even asset class.For 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 to read an index?

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 bond on the corresponding stock market by the total number of shares that are on the market.

Companies that are in the bag are obliged to present a balance sheet of its composition. This report must be notified every three or six months, as the case may be.

Reading a stock market index also means taking care of 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, it can be misleading.

If one index gains 500 points in one day, while another adds only 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 conclude that in percentage terms the gains for the second were greater.

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. Also S&P500, which includes 500 of the largest companies on the New York Stock Exchange. Finally, the Nasdaq 100which associates 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. Him too DAX 30, the main German index containing the most important companies of the Frankfurt Stock Exchange; there FTSE100 the London Stock Exchange; he CAC40 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, is considered the main in China, consisting of the most important companies of 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 Latin Americayou have the IPCwhich contains the 35 most consolidated 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.