Opening of the BSE Sensex 30 index on February 21

Day without change for the BSE Sensex 30which begins on Tuesday, February 21 with a variation of 0.15%until the 60,782.90 points, after opening. If we compare the value with previous dates, the BSE Sensex 30 with this data, he interrupts the sequence he marked the previous two days.

Looking at last week’s data, the BSE Sensex 30 mark a decline 0.41%; even if for a year it still maintains an increase of 4.8%. He BSE Sensex 30 is located at 0.88% below its maximum this year (61,319.51 points) and a 2.45% above its minimum price for the current year (59,330.90 points).

Stock market indices… What for?

a stock market index is an indicator that shows how the value of a given set of assets is changingit therefore uses 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 companies 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 will 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

There are currently various indices and They can be grouped by geographic location, industries, company size, or even asset class.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 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 value of the share on the corresponding stock market by the total number of shares that are in the hands of the investors.

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 involves taking into account its evolution over time. Current indices always start with a fixed value based on stock prices on their start date, but not everyone follows this method. Therefore, it can lead to failures.

If one index adds 500 points in one day, while another only adds 20, it may seem that the former has outperformed. 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 more remarkable.

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. Also S&P500, which includes 500 of the largest companies on the New York Stock Exchange. Finally, 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 continentwe have the Nikki 225, made up of the 225 largest companies on the Tokyo Stock Exchange. There is also the 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 Latin Americayou 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.

In addition, 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.