The PSI 20 index begins operations with positive figures on March 17

Negative day for psi 20which begins the session on Friday March 17 with slight declines in the 0.27%until the 5,850.39 points, after the start of the opening session. Compared to previous days, the psi 20 it reverses the result of the day before when it had experienced a rise of 2.77%, without managing to establish a stable trend lately.

Looking at last week’s data, the psi 20 records a decline 2.91%; even if for a year he still accumulates a promotion of 0.02%. He psi 20 is located at 3.6% below its maximum this year (6,069.06 points) and a 0.65% above its floor rate for the current year (5,812.87 points).

a stock market index It is an indicator that is used to know the evolution of the value of a certain set of assetsfor which it uses data from several companies or sectors of a market fragment.

These indicators are mainly used by the exchanges of each country and each of them can be integrated by firms with specific characteristics like having a similar market capitalization or belonging to the same type of industry, moreover, 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. Generally, if investors are not confident, stock prices will 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 join a union depending on their location, their sectors, the size of the companies or the type of assetFor 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).

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 daily 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 submitted every three or six months, as the case may be.

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

If one index gains 500 points in one day, while another adds only 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 higher.

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 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 continentwe have the Nikki 225, made up of the 225 largest companies on the Tokyo Stock Exchange. There is also the SSE composite index, is considered the main 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 consolidated 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.