good day for him nikkei 225which ended the session on Monday, December 26 with slight rises in 0.57%until the 26,383.59 points. The nikkei 225 reached a maximum of 26,438.65 points and the minimum number of 26,294.85 points. The trading range for the nikkei 225 between its highest and lowest point (maximum-minimum) during this day it stood at the 0.54%.
If we consider the data of the last week, the nikkei 225 accumulated a decrease in 3.14%so that in year-on-year terms there is still a decrease in 7.29%. The nikkei 225 a 10.05% below its maximum this year (29,332.16 points) and a 6.74% above its minimum valuation so far this year (24,717.53 points).
What is a stock index and what is it for?
a stock index It is an indicator that measures the evolution of the price of a set of assets.for which you need to have data from various companies or sectors of a part of the market.
These indicators are used mainly by the stock markets of each country and each of them can be integrated by signatures with specific 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 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 a company. 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 make a comparison 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 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
Currently there are various indices and They can congregate based on their location, 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 to read an index?
Each stock index has its own way of calculating, 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 on the market.
The companies that are in the bag are obliged to present a balance of its composition. Said report must come to light every three or six months, as the case may be.
Reading a stock index also implies noticing its changes over time. Current indices always appear with a fixed value based on stock prices on their start date, but not everyone follows this method. Therefore, it can lead to inaccuracies.
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 assumed that, in percentage terms, the gains for the latter were considerable.
These are the main stock indices
Between the major US stock indices is the Dow Jones Industrial Average, better known as Dow Jonesmade up of 30 companies, the S&P 500, which comprises 500 of the largest companies on the New York Stock Exchange. Lastly comes the Nasdaq 100which unites 100 of the largest non-financial firms.
On the other hand, the most important indices of Europe are the eurostoxx 50, which covers the 50 largest companies in the euro area. 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 ACC 40 from the Paris Stock Exchange; and the IBEX 35from the Spanish stock market.
In the asian continentthe main stock indices are the nikkei 225, made up of the 225 largest companies on the Tokyo Stock Exchange. Also, the SSE Composite Index, which is listed as the most solid in China, made up of the most relevant companies on the Shanghai Stock Exchange. Similarly, it is worth mentioning the Hang Seung Index in Hong Kong and the KOSPI in South Korea.
Talking about the latin american regionyou have the CPIwhich contains the 35 most influential firms on the Mexican Stock Exchange (BMV). At least a third of them belong to the capital 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 From Chile; the MSCI COLCAP from Colombia; the IBC de Caracas, made up of 6 companies from Venezuela.
Finally, 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 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 entire planet.