This year the markets have registered a constant volatility. (Infobae)
Beginning of the continuous day for the ATX, which opens the session on Thursday, February 23 with a variation of 0.17%, up to 3,453.29 points, after the start of the opening session. Compared to previous days, the ATX add five consecutive sessions in fall.
A stock index is an indicator that shows how the price of a given set of assets is changing by collecting data from various companies or sectors in a segment of the market.
These indicators are used mainly by the stock markets of various countries and each one of them can be integrated by firms with specific requirements, such as having a similar market capitalization or belonging to the same industry. In addition, there are some indices that only consider a a handful of shares to determine their 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 return on investment in a company’s stocks and shares. Generally, if investors are not confident, stock costs tend to fall.
They also work to measure the performance of an asset manager and allow investors to analyze risk vs. return comparisons; 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. carefully observed how the shares of the companies tended to rise or fall together in price, so he created two indices: one that contained the 20 most important railway companies (since it was the most important industry at the time), as well as 12 shares of other types of businesses
Each stock index has its own calculation method, but the main factor is the market capitalization of each firm that integrates it. This is obtained by multiplying the daily value of the security in the corresponding stock market by the total number of shares that are in circulation in the market.
Companies listed on the stock market are required to present a balance sheet of their composition. Said report must be notified every three or six months, as the case may be.
Reading a stock index also implies observing its changes over time. New indices always appear with a fixed value based on the prices of the securities on their inception date, but not all follow this method. Therefore, it can be a source of misunderstandings.
Among the main US stock indices is the Dow Jones Industrial Average, better known as Dow Jones, made up of 30 companies. Likewise, the S&P 500, which includes 500 of the largest companies on the New York Stock Exchange. Finally, we must mention the Nasdaq 100, which unites 100 of the largest non-financial firms.
On the other hand, the most prominent 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.
In Asia, we have the Nikkei 225, made up of the top 225 companies on the Tokyo Stock Exchange. There is also the SSE Composite Index, which appears as the preponderant of China, made up of the most prominent companies on the Shanghai Stock Exchange. The same role played by the Hang Seung Index in Hong Kong and the KOSPI in South Korea.
Regarding the Latin American region, there is the IPC, which contains the 35 most consolidated 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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