A day without changes for the Bovespawhich begins on Thursday, May 19, with a change to the 0.1%to the 106,350.37 points, after opening. If we compare the figure with the previous days, the Bovespa the price of the previous session, where it marked a fall of 0.51%, reverses, having not been able to establish a clear recent trend.
For the past week, the Bovespa record of increase in 0.63%; on the other hand, for a year it still keeps declining 12.74%. The IS Bovespa stands for one 12.52% below its maximum this year (121,570 points) and 5.29% above its minimum price so far this year (101,006 points).
Stock market indices… why?
stock index it is an indicator of how the value of a particular set of assets changesif it collects data from different companies or market sectors.
These indicators are mainly used by the stock exchanges of each country and companies with specific characteristics can integrate each of them similar to having a similar market capitalization or related to the same industry, there are also some indices that only include a handful of shares to determine their value or others that value hundreds of shares.
Stock market indices act as indicator of stock market confidence, business confidence, health of the national and global economy and performance of share investments and entity shares. If investors lack confidence, stock values 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 in the late 19th century after journalist Charles H. Dow. He looked carefully at how the stocks of the companies tended to go up or down together in price, so he created two indices: one in which the top 20 railway companies (since it was in the industry most at the time), as well as 12 acts of other kinds. of businesses
Today there are various indexes and they can be associated based on their geographical location, sectors, company size or type of assetFor example, the US Nasdaq index is made up of the 100 largest technology – related companies 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 calculating it, but the key factor is the market capitalization of every business that integrates it. This is obtained by multiplying the day value of the bond on the corresponding stock market by the total number of shares in circulation on the market.
Firms listed on the stock exchange are required present a balance its composition. That report must come to light every three or six months, as the case may be.
Reading a stock index also means taking into account its evolution over time. Current indices are always open with a fixed value based on securities prices on your start date, but not everyone follows this method. So it may seem misleading.
If one index grows 500 points per day, and another index only adds 20, it may appear that the first index exceeded. However, if the first day started at 30,000 points and the next day at 300, it can be determined, in percentage terms, that the gains for the second were more important.
These are the main stock indices
Between the major US stock indices There is the Dow Jones Industrial Average, better known Dow Jones, made up of 30 companies. Similarly, the S&P 500, comprised of 500 of the largest companies on the New York Stock Exchange. Finally, do not forget the 100 morewhich agrees 100 of the largest non – financial firms.
On the other hand, the most important indices of it Europe is the Eurostoxx 50, which covers the 50 largest companies in the euro area. In addition, the DAX 30, the main German index of the strongest companies on the Frankfurt Stock Exchange; an FTSE 100 from the London Stock Exchange; an 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. The IS SSE Composite Index, which can be considered as the leading one in China, consists of the most prominent companies on the Shanghai Stock Exchange. Likewise, it is worth mentioning the Hang Seung Index in Hong Kong and the KOSPI in South Korea.
Talking about it Latin American regionthe IS IPCcontaining swelling 35 leading Mexican Stock Exchange (BMV) firms. At least a third of them belong to the capital of tycoon Carlos Slim.
Another is the Bovespa, comprising the top 50 companies on the São Paulo stock exchange; an Merval from Argentina; an IPSA From Chile; an COLCAP MSCI from Colombia; an IBC de Caracas, made up of 6 Venezuelan companies.
Similarly, there are other types of global stock indices such as the MSCI Latin Americacomprising the 137 most important companies in Brazil, Chile, Colombia, Mexico and Peru.
Similarly, the MSCI Global, including 1,600 companies from 23 developed countries; an MSCI Emerging Markets, made up of more than 800 companies from developing countries; and the S&P Global 100comprised of the 100 most powerful multinational firms on the planet.
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