Bad day for Nikkei 225which begins the day on Friday, April 1 with notable falls in 1,28%until the 27,464.12 points, after opening. If we compare the value with previous sessions, the Nikkei 225 Accumulate three sessions in a row of negative numbers.
Taking into account the last seven days, the Nikkei 225 recorded a decrease in 2,44%which is why for a year it has still maintained a drop in 5,86%. The Nikkei 225 stands a 6,37% below its maximum this year (29,332.16 points) and a 11,11% above its minimum valuation so far this year (24,717.53 points).
Stock market indices… for what?
a stock index is an indicator that measures how the price of a given set of assets evolvesfor which it takes data from different companies or sectors of a fragment of the market.
These indicators are mainly used by the stock exchanges of various countries and each of them can be integrated by companies with certain characteristics such as having a similar market capitalization or belonging to the same industry, in addition, there are some indices that only take into account a handful of shares to determine their value or others that consider hundreds of shares.
Stock market indices serve as 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. Generally, if investors lack confidence, equity costs will tend to fall.
They also work to measure the performance of an asset manager and allow investors to make a comparison between profitability and risk; measure the opportunities of a financial asset or create portfolios.
This type of indicators began to be used at the end of the 19th century after journalist Charles H. Dow. carefully researched how company stocks tended to go up or down in price together, so he created two indices: one containing the top 20 railroad companies (it was the biggest 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 according to their location, the sectors, the size of the companies or also the type of assetFor 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 calculation method, but the main component is the market capitalization of each company that integrates it. This is obtained by multiplying the value of the day of the title in the corresponding stock market by the total number of shares that are in the market.
Listed companies are required to present a balance of its composition. Said report must be made public every three or six months, as the case may be.
Reading a stock index also implies taking into account its changes over time. Current 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 in a day, while another only adds 20, it might seem that the first index performed better. However, if the former started the day at 30,000 points and the other at 300, it can be assumed that, in percentage terms, the gains for the latter were more important.
What are the main stock indices?
Between the major US stock indices There is the Dow Jones Industrial Average, better known as Dow Joneswhich is made up of 30 companies., the S&P 500, which includes 500 of the largest companies on the New York Stock Exchange. Finally, it is necessary to mention the Nasdaq 100which associates 100 of the largest non-financial firms.
On the other hand, the most outstanding indices of Europe are the Eurostoxx 50, which covers 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.
On Asiawe have the Nikkei 225, made up of the 225 largest companies on the Tokyo Stock Exchange. Also, the SSE Composite Index, which can be considered the main one in China, made up of the most prominent companies on the Shanghai Stock Exchange. The same role played by Hang Seung Index in Hong Kong and the KOSPI in South Korea.
Talking about the Latin American regionyou have the IPCwhich contains at 35 most influential firms of the Mexican Stock Exchange (BMV). At least a third of them are owned by magnate Carlos Slim.
Another is the Bovespa, made up of the 50 most important companies on the São Paulo stock exchange; the merval from Argentina; the ITSELF From Chile; the IGBC of Bogota; the IBC of Caracas, made up of 6 companies from Venezuela.
Similarly, there are other types of global stock market indices such as the MSCI Latin Americawhich 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 100made up of the 100 most powerful multinational firms on the planet.
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