This year the markets have registered a constant volatility. (Infobae)
Day without changes for the ATX, which opens the day on Tuesday, January 17 with a variation of 0.24%, up to 3,307.60 points, after the start of the opening session. Regarding past days, the ATX chains five dates followed by positive numbers.
Taking into account the last week, the ATX accumulates an increase of 2.04%; Despite this, in year-on-year terms, it still accumulates a drop of 14.32%. and 4.68% above its minimum price so far this year (3,159.71 points).
Stock indices… What for?
A stock index is an indicator used to show the evolution of the value of a set of assets, for which it uses data from various companies or sectors of a fragment of the market.
These indicators are mainly used by the stock markets of different countries and each one of them can be integrated by firms with different specificities, such as having a similar market capitalization or belonging to the same type of business, in addition, there are some indices that only consider a handful of shares to determine its value or others that consider hundreds of shares.
Stock indices serve 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 shares of an entity. If investors are not confident, stock values will tend to fall.
Likewise, they work to measure the performance of an asset manager and allow to analyze comparisons between profitability and risk; measure the opportunities of a financial asset or create portfolios.
These types of indicators began to be used at the end of the 19th century after the journalist Charles H. Dow. To carefully investigate how the shares of companies tended to rise or fall together in price, he created two indices: one that contained the 20 largest railway companies (as it was the most important industry at the time), as well as 12 shares of other types of businesses
Today there are various indices and they can be put together based on their geography, sectors, the size of the companies or also the type of asset, for example, the US Nasdaq index is made up of the 100 largest companies mostly 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 it calculated and how to read them?
Each stock index has its own way of being measured, but the main factor is the market capitalization of each company that integrates it. This is obtained by multiplying the daily value of the bond in the corresponding stock market by the total number of shares that are in the market.
Companies listed on the stock market are required to present a balance sheet of their composition. Said report must be made public every three or six months, as appropriate.
Reading a stock index also implies taking care of its changes over time. Current indices always start with a fixed value based on the prices of the securities on their start date, but not all follow this method. Therefore, it can be a source of misunderstandings.
If one index scores 500 points in a day, while another only scores 20, it might appear that the former performed better. However, if the former started the day at 30,000 points and the other at 300, it can be concluded that, in percentage terms, the gains for the latter were larger.
The main stock indices
Among the main stock market indices in the American Union is the Dow Jones Industrial Average, better known as Dow Jones, which is made up of 30 companies. Similarly, the S&P 500, which comprises 500 of the largest companies on the New York Stock Exchange. Finally, there is the Nasdaq 100, which associates 100 of the largest non-financial firms.
On the other hand, the most important indices in Europe are the Eurostoxx 50, which covers the 50 most important companies in the euro area. On the other hand, the DAX 30, the main German index that contains the most outstanding companies on the Frankfurt Stock Exchange; the FTSE 100 of the London Stock Exchange; the CAC 40 of the Paris Stock Exchange; and the IBEX 35, of the Spanish stock market.
On the Asian continent, we have the Nikkei 225, made up of the 225 most important companies on the Tokyo Stock Exchange. Also, the SSE Composite Index, which can be considered the most notable in China, made up of the most prominent companies on the Shanghai Stock Exchange. Similarly, it is worth mentioning the Hang Seung Index in Hong Kong and the KOSPI in South Korea.
With regard to Latin America, there is the IPC, which contains the 35 most prestigious firms on the Mexican Stock Exchange (BMV). At least a third of them are owned by tycoon Carlos Slim.
Another is the Bovespa, made up of the 50 most important companies on the Sao Paulo Stock Exchange; the Merval from Argentina; the IPSA of Chile; the MSCI COLCAP of Colombia; the IBC of Caracas, made up of 6 companies from Venezuela.
Finally, there are other types of global stock indices such as the MSCI Latin America, which includes the 137 most important companies in Brazil, Chile, Colombia, Mexico and Peru.
Similarly, there is the MSCI World, which includes 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 Global 100, made up of the 100 most powerful multinational firms on the entire planet.
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