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Taiwan Weighted Index closes on December 26

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

Unchanged session for the Taiwan Weightedwhich closed on Monday, December 26 with a variation of the 0.08%until the 14,283.75 points. The Taiwan Weighted scored a maximum volume of 14,301.11 points and the minimum number of 14,253.20 points. The trading range for the Taiwan Weighted between its highest and lowest point (maximum-minimum) during this day it stood at the 0.34%.

Taking into account the last seven days, the Taiwan Weighted marks a decrease in 1.04%for this reason, since a year ago, it still maintains a decrease in 19.69%. The Taiwan Weighted a 22.9% below its maximum this year (18,526.35 points) and a 12.77% above its minimum valuation so far this year (12,666.12 points).

Stock indices… What for?

a stock index It is an indicator that shows how the value of a given set of assets evolvesfor which it collects data from different companies or sectors of a fragment 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 different specificities such as having a similar market capitalization or belonging to the same type of 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 stock investments and shares of an entity. If investors are not confident, stock values ​​will tend to fall.

They also work to measure the performance of an asset manager and allow investors to make comparisons between return 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 be pooled based on their location, sectors, company size or asset classFor 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 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 circulation in the market.

Companies that are listed on the stock market are required 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 paying attention to its evolution over time. Current 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 sees an increase of 500 points in one day, while another only adds 20, it might appear that the former performed better. 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 important.

These are the main stock indices

Between the main stock indices in the American Union is the Dow Jones Industrial Average, better known as Dow Jones, made up of 30 companies. 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 prominent 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 outstanding 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, is seen as the main one in 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 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 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.

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