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The Bovespa closed this November 22 with a loss of 0.64%

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

bad day for him Bovespawhich closed on Tuesday, November 22 with slight drops in the 0.64%until the 109,048.84 points. The Bovespa marked the maximum number of 110,223.73 points and a minimum volume of 107,867.47 points. The trading range for the Bovespa between its highest and lowest point (maximum-minimum) during this day it stood at the 2.14%.

Taking into account the last week, the Bovespa records a decrease of 3.63% although, on the contrary, in year-on-year terms it still maintains an increase in 6.47%. The Bovespa a 10.3% below its maximum this year (121,570.15 points) and a 13.45% above its minimum price so far this year (96,120.85 points).

What is a stock index and what is it for?

a stock index is an indicator that shows how the value of a certain set of assets changesso 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 each country and each of them can be integrated by firms with specific characteristics such as having a similar market capitalization or belonging to the same type of industry, there are also 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 company shares. Generally, if investors are not confident, stock prices will tend to fall.

They also work to measure the performance of an asset manager and they allow investors to be able to compare 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 see carefully 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 humanity there are various indices and They can agglomerate 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 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 a stock index measured?

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 daily value of the bond in the corresponding stock market by the total number of shares that are in the market.

Publicly traded firms are required to present a balance of its composition. Said report must be notified every three or six months, as the case may be.

Reading a stock index also implies observing its changes over time. New 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 failures.

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, it can be derived that, in percentage terms, the gains for the latter were larger.

What are the major stock indices?

Between the major US stock indices 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, 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. Furthermore, 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 can be considered the most representative 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 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.

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