The Indian market opened the day with a downward trend on August 10

This year the markets have registered a constant volatility. (Infobae)

bearish day for Nifty 50, which begins on Thursday, August 10 with slight drops of 0.26%, to 19,580.70 points, after the start of the opening session. Regarding past dates, the Nifty 50 turns around the data from the previous day in which it experienced an increase of 0.13%, showing that it is unable to set a trend in recent times.

In relation to the profitability of the last seven days, the Nifty 50 it marks a rise of 1.03%, so that in the last year it still accumulates a rise of 12.61%. He Nifty 50 it stands 1.99% below its maximum this year (19,979.15 points) and 15.55% above its minimum valuation so far this year (16,945.05 points).

A stock index is an indicator that shows how the value of a set of assets changes, so it takes data from different companies or sectors of a part of the market.

These indicators are used mainly by the stock markets of the 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 industry; likewise, there are some indices that only they take into account 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 performance of investments in stocks and shares of a company. If investors are not confident, share prices will 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. To carefully analyze 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

There are a number of indices today and they can be aggregated based on geographic location, sectors, company size or even asset class, for example, the Nasdaq US Index is made up of the 100 largest largely related companies. to technologies such as Apple (AAPL), Microsoft (MSFT), Amazon (AMZN), Facebook (FB), Alphabet (GOOG), Tesla (TSLA), Nvidia (NVDA), PayPal (PYPL), Comcast (CMCSA), Adobe (ADBE).

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 value of the title on the corresponding stock market by the total number of shares that are in the hands of investors.

Companies listed on the stock market are required to present a balance sheet of their composition. Said report must be delivered every three or six months, as appropriate.

Reading a stock index also implies noticing its changes over time. Today’s indices always start with a fixed value based on the stock prices on their start date, but not all follow this method. Therefore, it can be misleading.

If one index gains 500 points in a day, while another only gets 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, you can see that, in percentage terms, the gains for the latter were larger.

Among the main stock indices in the United States 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, the Nasdaq 100 appears, which links 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.

On the Asian continent, we have the Nikkei 225, made up of the 225 most important 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.

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 part of the patrimony of 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.

There are also 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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