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The main indicator of the BMV registered a gain of 0.64% at the close of this January 12

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

Positive day for the Mexican S&P/BMV IPC index, which ended on Thursday, January 12, with increases in the 0.64%until the 53,551.98 points. The Mexican S&P/BMV IPC index marked the maximum number of 53,859 points and the minimum number of 53,215.51 points. The trading range for the Mexican S&P/BMV IPC index between its highest and lowest point (maximum-minimum) during this day was located in the 1.19%.

Compared to the last week, the Mexican S&P/BMV IPC index registered an increase of 5.41%; but in year-on-year terms it still maintains a decrease in the 0.7%. and a 9.3% above its minimum price so far this year (48,993.24 points).

What is a stock index and what is it for?

a stock index is an indicator that measures how the value of a set of assets evolvesfor which it takes data from different companies or sectors of a fragment of the market.

These indicators are used mainly by the stock exchanges of various nations and each of them can be integrated by firms with specific requirements such as having a similar market capitalization or belonging to the same type of business, 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 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 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. 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 in humanity there are various indices and may congregate based on their geography, 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 a stock index measured?

Each stock index has its own calculation method, 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 circulation in the market.

Publicly listed companies are required to present a balance of its composition. Said report must be disclosed every three or six months, as appropriate.

Reading a stock index also requires examining 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. So it can be confusing.

If one index adds 500 points in one day, while another only adds 20, it might appear that the former performed better. However, if the first started the day at 30,000 points and the other at 300, it can be assumed that, in percentage terms, the gains for the second were more important.

What are the major stock indices?

Between the major US stock indices is the Dow Jones Industrial Average, better known as Dow Jones, which is made up of 30 companies. Likewise, the S&P 500, which includes 500 of the largest companies on the New York Stock Exchange. Finally, one must not forget 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 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 Asiathe main stock indices are the nikkei 225, made up of the 225 largest companies on the Tokyo Stock Exchange. Also, the SSE Composite Index, which is listed as the most solid in China, made up of the most prominent 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 Latin Americayou have the CPIwhich contains the 35 most powerful 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.

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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