Unchanged session opening for the 20PSIwhich begins on Tuesday, December 13 with a variation of the 0.02%until the 5,771.57 points, after opening. Regarding previous dates, the 20PSI add three consecutive days in positive figures.
If we consider the data of the last seven days, the 20PSI notes a decrease in 1.39%; On the other hand, in the last year he still accumulates a promotion of 5.87%. The 20PSI a 9.1% below its maximum this year (6,349.21 points) and a 11.2% above its minimum price for the current year (5,190.28 points).
What is a stock index and what is it for?
a stock index is an indicator that shows how the price of a given set of assets changesso it uses data from different companies or sectors of a part of the market.
These indicators are used mainly by the stock markets of different countries of the world and each of them can be integrated by companies with certain characteristics such as having a similar market capitalization or belonging to the same type of industry, there are also some indices that only consider 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 company shares. Generally, if investors do not have confidence, the costs of shares will tend to fall.
They also work to measure the performance of an asset manager and allow analysis of 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
Currently there are various indices and They can join a union based on their location, sectors, the size of the companies or even 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 firm that integrates it. This is obtained by multiplying the daily value of the share in the corresponding stock market by the total number of shares that are in the market.
Firms listed on the stock market 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 observing its evolution over time. Current indices always start with a fixed value based on stock prices on their start date, but not everyone follows this method. Therefore, it can be a source of misunderstandings.
If one index rises 500 points in one day, while another only 20, it might appear that the former outperformed. But, 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 more remarkable.
What are the major stock indices?
Between the main stock indices in the American Union is the Dow Jones Industrial Average, better known as Dow Jones, of which 30 companies are part. Likewise, 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 brings together 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. Also, 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 continentwe 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 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.
Talking about the latin american regionyou have the CPIwhich 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 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.