Bearish session for the ATXwhich closed the day of Monday, December 12 with decreases in 0.98%until the 3,135.43 points. The ATX scored a maximum of 3,167.08 points and a minimum volume of 3,135.35 points. The trading range for the ATX between its highest and lowest point (maximum-minimum) during this day it stood at the 1%.
Regarding the last week, the ATX marks a drop in 2.38%so that from a year ago it still maintains a decrease in the 15.97%. The ATX a 22.73% below its maximum so far this year (4,057.59 points) and a 18.43% above its minimum price for the current year (2,647.43 points).
Stock indices… What for?
a stock index is an indicator that shows how the value of a set of assets changesso it takes data from various companies or sectors of a part of the market.
These indicators are used mainly by the stock markets of various countries and each of them can be integrated by companies with specific characteristics such as having a similar market capitalization or belonging to the same type of business, 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 shares of an entity. If investors are not confident, share prices 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. 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 partner based on their geography, sectors, company size or asset classFor example, the US Nasdaq index is made up of the 100 largest largely technology-related companies 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.
Firms listed on the stock exchange are required to present a balance of its composition. Said report must be notified every three or six months, as appropriate.
Reading a stock index also requires examining its changes 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 lead to inaccuracies.
If one index gains 500 points in one day, while another only adds 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 seen that, in percentage terms, the gains for the latter were more remarkable.
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 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 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. There is also the SSE Composite Index, which appears as the preponderant of 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 are part of the patrimony 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.
Likewise, there are other types of global stock 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.