Bad day for bovespawhich begins on Friday, August 19, to fall from the 0.83%to the 112,869.76 points, after the start of the open session. For earlier dates, the bovespa interrupting the positive streak of market prices in the last five sessions.
If we consider the details of the last seven days, the bovespa accumulated rise of 0.09%; however, in year-on-year terms, it still accumulates a fall 4.27%. The IS bovespa one stands 7.16% below its maximum this year (121,570 points) and a 17.42% 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 used to find out about the evolution of the value of a certain set of assets.for which you need to have data from different companies or sectors of a market.
These indicators are used mainly by the stock exchanges of countries and firms with specific characteristics can integrate each for example having a similar market capitalization or belonging to the same type of industry, also, 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 allowing investors to analyze comparisons between return 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 containing the top 20 railroad companies (the largest industry at the time), as well as 12 acts of other types of businesses.
Today there are various indexes and it can be aggregated based on geographic location, industry, company size, or even 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 factor is the market capitalization of each company that integrates it. This is obtained by multiplying the day’s value of the title on the corresponding stock market by the total number of shares in circulation in the market.
Businesses listed on the stock exchange are required to present a balance of its composition. That report must be disclosed every three or six months, as the case may be.
To read a stock index, one must also pay attention to its changes over time. Current indices always appear with a fixed value based on security prices on your start date, but not everyone follows this method. Therefore, it can lead to inaccuracy.
If one index adds 500 points per day, and another index only gains 20 points, it may appear that the first index performed better. But, 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 latter were more important.
These are the main stock indices
Between the major US stock indexes There is the Dow Jones Industrial Average, better known Dow Jones, which consists 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 headswhich connects 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. On the other hand, the DAX 30, Germany’s main index of the largest outstanding 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 IS Nikkei 225, comprising the 225 largest companies on the Tokyo Stock Exchange. Also, the SSE Composite Index, seen as the most solid in China, consists of the most relevant companies on the Shanghai Stock Exchange. Similarly, it is worth mentioning the Hang Index Seung in Hong Kong and the KOSPI in South Korea.
Talking about it Latin American regionthe IS IPCin which swelling 35 most influential companies of the Mexican Stock Exchange (BMV). At least a third of them belong to the capital of the 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.
Finally, there are other types of global stock 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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