A day without changes for the bovespathe session begins on Thursday, August 18, with a change of the 0.18%to the 113,913.39 points, after opening. Analyzing this data with that of the previous days, the bovespa put five dates in a row in green.
Considering last week, the bovespa rising scores of 3.82%; however, in the last year it accumulated still fall in 4.42%. The IS bovespa one stands 6.3% below the maximum so far this year (121,570 points) and a 18.51% above its minimum price for the current year (96,121 points).
What is a stock index and what is it for?
stock index it is an indicator that measures the evolution of the value of a certain set of assetstherefore it collects data from different companies or sectors of a part of the market.
These indicators are mainly used by the stock markets of different countries around the world and firms with different specialties can integrate each for example having a similar market capitalization or belonging to the same type of industry, also, there are some indexes that only take into account a handful of shares to determine their value or others that consider hundreds of shares.
Stock market indices act as an indicator of confidence in the stock market, business confidence, the health of the national and global economy and the performance of investments in shares and company shares. In general, if investors lack confidence, share prices tend to fall.
They also work for the asset manager performance and enable investors to compare profitability and risk; the opportunities of measuring a financial asset or creating portfolios.
This type of indicator began to be used at the end of the 19th century after journalist Charles H. Dow. He looked closely at how company stocks tended to go up or down together in price, so he created two indexes: one containing the top 20 railroad companies (since it was the industry’s most more at the time), as well as 12 acts of other types of businesses.
Today in humanity there are various indices and they can be clustered based on geography, sectors, company size or asset typeFor example, the US Nasdaq index consists 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 to read an index?
Each stock index has its own way of measuring it, but the main factor is the market capitalization of each firm that integrates it. This is obtained by multiplying the day’s value of the share in the corresponding stock market by the total number of shares in circulation in the market.
Listed companies are required to present a balance of its composition. That report must appear every three to six months, as appropriate.
Reading a stock index is all about paying attention to its changes over time. Current indices always start with a fixed value based on the prices of the securities on your start date, but not everyone follows this method. Therefore, it can lead to failures.
If one index grows 500 points per day, while another index only gains 20, it may appear that the first index performed better. However, if the first day started at 30,000 points and the next day at 300, it follows that, in percentage terms, the gains for the latter were greater.
These are the main stock indices
Between the major US stock indexes There is the Dow Jones Industrial Average, better known Dow Jonesmade up of 30 companies., the S&P 500, including 500 of the largest companies on the New York Stock Exchange. Finally comes the Nasdaq 100which brings together 100 of the largest non-financial firms.
On the other hand, the most important indexes of Europe is the Eurostoxx 50, covering the 50 largest companies in the eurozone. In addition, the DAX 30, the main German index containing the most prominent companies on the Frankfurt Stock Exchange; the FTSE 100 from the London Stock Exchange; the CAC 40 of the Paris Stock Exchange; and the IBEX 35of the Spanish stock market.
I Asiathe main stock indices are the Nikkei 225, comprising the 225 largest companies on the Tokyo Stock Exchange. Also, the SSE Composite Index, which is listed as the main one in China, consists of the most relevant companies on the Shanghai Stock Exchange. The same role played by Hang Index Seung in Hong Kong and the KOSPI in South Korea.
Talking about it Latin Americathe IS IPCin which swelling 35 most powerful companies of the Mexican Stock Exchange (BMV). At least a third of them are owned by magnate Carlos Slim.
Another is the bovespa, composed of the 50 most important companies on the São Paulo stock exchange; the Merval from Argentina; the IPSA From Chile; the COLCAP MSCI from Colombia; the IBC de Caracas, made up of 6 companies from Venezuela.
Likewise, there are other types of global stock market indices such as the MSCI Latin Americawhich includes the 137 most important companies in Brazil, Chile, Colombia, Mexico and Peru.
Likewise, the MSCI World, including 1,600 companies from 23 developed countries; the MSCI Emerging Markets, made up of more than 800 companies from developing countries; and the S&P World 100made up of the 100 most powerful multinationals in the world.
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