Opening of the main Lisbon index on February 17

Opening the session without major changes for the psi 20which opens the meeting of Friday February 17 with a variation of the 0.01%until the 6,002.33 dots, after opening. Regarding the changes of this day compared to past dates, the psi 20 sum three successive sessions in positive numbers.

Considering last week, the psi 20 gets a promotion from 0.94%so that in the last year it still accumulates an increase of 9.23%. He psi 20 is located 0.65% below its maximum this year (6,041.64 points) and a 2.97% above its minimum valuation for the current year (5,829.15 points).

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

a stock market index It is an indicator that shows how the value of a certain set of assets is changingfor which it collects data from different companies or sectors of a market fragment.

These indicators are mainly used by the stock markets of different countries of the world and each of them can be integrated by signatures with specific characteristics like having a similar market capitalization or being in the same industry, there are also 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 an entity. Generally, 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. carefully observed how the stock prices of companies tended to rise or fall together, so he created two indices: one containing the 20 largest railway companies (since this was the largest industry in the world). era), as well as 12 shares of other types of companies

Currently, in our economy, there are various indices and they can be grouped by geography, industries, company size or even asset typeFor 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 way of being measured, but the main factor is the market capitalization of each company that incorporates it. This is obtained by multiplying the current value of the bond 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 means analyzing its evolution over time. New indices always open at 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 sees an increase of 500 points in one day, while another only adds 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 for the second were greater.

The main stock market indices

Between the main stock indices of the American Union is the Dow Jones Industrial Average, better known as the Dow Jones, of which 30 companies are part. Likewise, the 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. Also 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 Asiathe 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. 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 Powerful 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.

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.