Opening of the main Lisbon index on February 20

Day without change for the psi 20which opens the session on Monday, February 20 with a variation of the 0.16%until the 6,032 dots, after opening. By analyzing these data with those of the previous days, the psi 20 string four consecutive dates in positive values.

In the past seven days, the psi 20 gets a promotion from 2.36%so that in the last year it still accumulates an increase of 8.43%. He psi 20 is located at 0.16% below its maximum this year (6,041.64 points) and a 3.48% above its minimum valuation so far this 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 is used to know the evolution of the price of a set of assetsfor which it collects data from different 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 industry, furthermore, some indices only consider a handful of stocks to determine their value or others which 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. If investors lack confidence, 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 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 in humanity there are various indices and They can group together based on 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 is a stock index measured?

Each stock index has its own way of being measured, but the main component is the market capitalization of each company that incorporates it. This is obtained by multiplying the current value of the security on the corresponding stock market by the total number of shares that are in the hands of investors.

Listed companies are required to present a balance sheet of its composition. This report must be issued every three or six months, as the case may be.

Reading a stock index also requires noticing its variations over time. New indices always start with a fixed value based on stock prices on their start date, but not everyone follows this method. Therefore, it can be misleading.

If one index adds 500 points in one day, while another only adds 20, it may appear that the former has outperformed. However, if the first started the day at 30,000 points and the other at 300, it can be deduced that in percentage terms 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, 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 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. On the other hand, the DAX 30, the main German index containing the most important companies of 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. 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.