South Korea’s KOSPI index closes on February 20

Day without change for the KOSPIwhich closed the meeting of Monday February 20 with a variation of the 0.16%until the 2,455.12 points. He KOSPI reaches a maximum volume of 2,463.17 points and a minimum volume of 2,430.27 dots. The trading range for the KOSPI between its highest point and its lowest point (maximum-minimum) during this day, it was at the 1.34%.

If we consider the data of the last seven days, the KOSPI accumulates an increase of 0.1%; although year-over-year, it still accumulates a decrease of 9.22%. He KOSPI is located 1.16% below its maximum this year (2,484.02 points) and a 10.66% above its minimum price so far this year (2,218.68 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 movingfor 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 companies with specific characteristics like having a similar market capitalization or belonging to the same type of company, 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 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. 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

There are currently various indices and they can be grouped by location, industries, company size or even asset typeFor 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 calculation method, but the main component is the market capitalization of each company that incorporates it. This is obtained by multiplying the daily value of the share in the corresponding stock market by the total number of shares outstanding in the market.

Listed companies are required 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 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 be misleading.

If one index adds 500 points in one day, while another only adds 20, it may appear that the former has outperformed. But, if the first started the day at 30,000 points and the other at 300, we can conclude that in terms of percentage, the gains of the second were more remarkable.

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, we must mention 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. Also 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 the asian continentthe 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 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 the Latin American regionyou have the IPCwhich contains the 35 Most Powerful 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.