bad day for him IBEX 35which begins on Friday, September 23, to fall from 0.7%to the 7,720.11 points, after opening. If we compare the value with past days, the IBEX 35 makes four consecutive days of descent.
If we consider the details of the last seven days, the IBEX 35 drop in piles 3.31%so in year-on-year terms there is still a decline in 12.23%. The IS IBEX 35 one stands 13.58% below its maximum level so far this year (8,933.60 points) and a 0.99% above its minimum valuation for the current year (7,644.60 points).
Stock market indices… what?
stock index It is an indicator used to find out about the evolution of the value of a certain set of assets.for which it takes data from different companies or sectors of a part of the market.
These indicators are mainly used by the stock exchanges of countries and businesses with specific requirements can integrate each for example having a similar stock market capitalization or belonging to the same type of business, in addition, 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 entity shares. If investors lack confidence, share prices tend to fall.
They also work for the asset manager performance and allow investors to make 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. carefully analyzed 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 largest industry at the time), as well as 12 actions of other types of businesses.
Today in humanity there are various indices and they can be grouped by location, sectors, 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 to read an index?
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 share in the corresponding stock market by the total number of shares held by the investors.
Companies listed on the stock exchange are required to present a balance of its composition. That report must appear every three to six months, as the case may be.
Reading a stock index also involves observing the 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, and another index gains only 20, it may appear that the first index has outperformed. But, if the first day started at 30,000 points and the next day at 300, it can be concluded that, in percentage terms, the gains were significant for the latter.
What are the main stock indices?
Between the major US stock indexes There is the Dow Jones Industrial Average, better known Dow Jones, made up of 30 companies. Similarly, the S&P 500, including 500 of the largest companies on the New York Stock Exchange. Finally, it is worth mentioning the 100 headsto associate 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, the main German index containing the strongest 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, 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.
Also, 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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