positive day for nikkei 225which closed on Friday, February 3 with slight rises in the 0.4%until the 27,511.60 points. The nikkei 225 marked a maximum volume of 27,612.57 points and a minimum of 27,445.69 points. The trading range for the nikkei 225 between its highest and lowest point (maximum-minimum) during this day it stood at the 0.6%.
In the last seven days, the nikkei 225 marks an increase in 0.47%so that for a year it still maintains a rise in the 1.4%. and a 6.98% above its minimum valuation so far this year (25,716.86 points).
What is a stock index and what is it for?
a stock index It is an indicator that shows how the value of a set of assets evolvesfor 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 various countries 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, 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 company shares. If investors are not confident, share prices 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 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 there are various indices and they can unionize based on their geographical location, sectors, company size 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 to read an index?
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 value of the share on the corresponding stock market by the total number of shares that are on the market.
Companies listed on the stock exchange are required to present a balance of its composition. Said report must be published every three or six months, as appropriate.
Reading a stock index also requires paying attention to its changes over time. New indices always start 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 by 500 points in one day, while another only gets 20, it might appear that the former outperformed. However, if the first started the day at 30,000 points and the other at 300, it can be deduced that, in percentage terms, the gains for the second were more notable.
The main 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 comprises 500 of the largest companies on the New York Stock Exchange. Finally, 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 strongest 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 Asiawe have the nikkei 225, made up of the 225 largest companies on the Tokyo Stock Exchange. There is also the SSE Composite Index, is seen as the most solid in China, made up of the most prominent 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 outstanding firms of the Mexican Stock Exchange (BMV). At least a third of them belong to the capital 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.
