South Korea’s main index closed in negative territory on February 17

unfavorable session for KOSPIwhich closed on Friday, February 17 with declines of 0.98%until the 2,451.21 points. He KOSPI scored a maximum volume of 2,471.51 points and the minimum number of 2,445.74 dots. The trading range for the KOSPI between its highest point and its lowest point (maximum-minimum) during this day, it was at the 1.04%.

Last week the KOSPI marks a decrease of 0.75% and for a year it still accumulates a drop in 10.79%. He KOSPI is located 1.32% below its maximum this year (2,484.02 points) and a 10.48% above its minimum valuation so far this year (2,218.68 points).

Stock market indices… What for?

a stock market index It is an indicator used to show the evolution of the price of a set of assets.for which it collects 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 like having a similar market capitalization or being in the same type of 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. 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 have comparisons 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 our economy there are various indices and they can be grouped by geographic 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 bond on the corresponding stock market by the total number of shares that are on the market.

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 examining its evolution over time. Current indices always open at a fixed value based on stock prices on their start date, but not everyone follows this method. So it can be confusing.

If one index rises 500 points in one day, while another only gains 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 deduce that in terms of percentage, the gains of the second were more remarkable.

These are 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 strongest 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. There is also the SSE composite index, which can be considered the main one in 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 Outstanding 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.