Negative session for KOSPIwhich ended on Friday, September 23, with major falls 1.81%to the 2,290 points. The IS KOSPI marked maximum volume of 2,334.06 points and a minimum of 2,285.71 points. The trading range for KOSPI between the highest point and the lowest point (maximum-minimum) during this day stood at 2.07%.
Considering the last seven days, the KOSPI accumulates decrease i 3.89% and for a year it still keeps falling in 26.79%. The IS KOSPI one stands 23.39% below its maximum level so far this year (2,989.24 points)
What is a stock index and what is it for?
stock index it is an indicator that shows how the price of a set of assets changestherefore it collects data from different companies or sectors of a part of the market.
These indicators are mainly used by the stock exchanges of countries and companies with different specialties can integrate each for example having a similar market capitalization or belonging to the same type of industry, likewise, there are some indexes that consider only 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 entity 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 indicators began to be used at the end of the 19th century after journalist Charles H. Dow. he carefully researched how company stocks tended to go up or down in price together, so he created two indexes: one of the top 20 railroad companies (the largest industry there at the time), as well as 12 acts of other types of businesses.
Today there are various indexes and they can be grouped by 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 is a stock index measured?
Each stock index has its own calculation method, but the main component is the market capitalization of each firm that integrates it. This is obtained by multiplying the day’s value of activity on the corresponding stock market by the total number of shares on the market.
Businesses listed on the stock exchange are required to present a balance of its composition. That report must be published every three to six months, as appropriate.
Reading a stock index also involves observing its changes over time. New indices always start with a fixed value based on stock prices on your start date, but not everyone follows this method. Therefore, it can be misleading.
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, you can see that, in percentage terms, the gains were significant for the latter.
What are the main stock indices?
Between the major stock indices in the American Union There is the Dow Jones Industrial Average, better known Dow Joneswhich includes 30 companies, the S&P 500, including 500 of the largest companies on the New York Stock Exchange. Finally, the 100 headswhich brings together 100 of the largest non-financial firms.
On the other hand, the most significant 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 continent of Asiathe IS Nikkei 225, comprising the 225 largest companies on the Tokyo Stock Exchange. The IS SSE Composite Index, is seen as China’s main respondent, consisting 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 Top 35 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 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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