Day without changes for the KOSPIwhich closed the session on Monday, December 26 with a variation of the 0.15%until the 2,317.14 points. The KOSPI scored a maximum of 2,321.92 points and a minimum volume of 2,304.20 points. The trading range for the KOSPI between its highest and lowest point (maximum-minimum) during this day it stood at the 0.76%.
Taking into account the last seven days, the KOSPI scores a decrease of 1.49%so that from a year ago there is still a decrease in the 23.22%. The KOSPI a 22.48% below its maximum so far this year (2,989.24 points) and a 7.5% above its minimum valuation for the current year (2,155.49 points).
What is a stock index and what is it for?
a stock index It is an indicator that is used to know the evolution of the value of a certain set of assets.for which you need to have 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 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 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 shares of a company. If investors are not confident, stock values 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. 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
Currently in our economy there are various indices and they can agglomerate based on their location, sectors, size of 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 is it calculated and how to read them?
Each stock index has its own way of being measured, but the main factor is the market capitalization of each company that integrates it. This is obtained by multiplying the daily value of the bond in the corresponding stock market by the total number of shares that are in the market.
Companies listed on the stock exchange 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 analyzing its changes over time. New indices always appear with a fixed value based on security prices on their start date, but not everyone follows this method. Therefore, it can be misleading.
If one index powers up 500 points in one day, while another only gets 20, it might appear that the former outperformed. However, if the former started the day at 30,000 points and the other at 300, it can be deduced that, in percentage terms, the gains for the latter were more important.
The main stock indices
Between the major US stock indices is the Dow Jones Industrial Average, better known as Dow Jones, of which 30 companies are part. Also, 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. On the other hand, the DAX 30, the main German index containing the most prominent 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 Asiathe main stock indices are the nikkei 225, made up of the 225 largest companies on the Tokyo Stock Exchange. There is also the SSE Composite Index, which can be considered the preponderant of China, made up of the most relevant 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 Latin Americayou have the CPIwhich contains the 35 most powerful 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.
Also, 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.