Day of hikes for the Nikkei 225which ended on Tuesday, September 20, with slight increases in 0.48%until the 27,700.62 points. The Nikkei 225 scored a maximum volume of 27,907.45 points and a minimum of 27,627.86 points. The trading range for Nikkei 225 between its highest point and its lowest point (maximum-minimum) during this day stood at 1%.
In the last week, the Nikkei 225 accumulates a drop in 2.95%so that for a year it has still maintained a decrease in 8.22%. The Nikkei 225 stands a 5.56% below its maximum this year (29,332.16 points) and a 12.07% above its minimum valuation for the current year (24,717.53 points).
What is a stock index and what is it for?
a stock index is an indicator that measures the evolution of the price of a set of assetsso it takes data from different companies or sectors of a fragment of the market.
These indicators are mainly used by the stock exchanges of each country and each of them can be integrated by companies with specific requirements such as having a similar stock market capitalization or belonging to the same type of business, in addition, there are some indices that only take into account a handful of shares to determine their value or others that consider hundreds of shares.
Stock market 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. If investors lack confidence, share prices will tend to fall.
They also work to measure the performance of an asset manager and allow investors to have comparisons between return and risk; measure the opportunities of a financial asset or create portfolios.
This type of indicators began to be used at the end of the 19th century after journalist Charles H. Dow. closely watched how company stocks tended to go up or down together in price, so he created two indices: one containing the top 20 railroad companies (since it was the biggest industry at the time), as well as 12 actions of other types of businesses
Currently there are various indices and they can be grouped according to their geography, sectors, company size or type of assetFor example, the US Nasdaq index is made up of the 100 largest companies largely 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 value of the day of the title in the corresponding stock market by the total number of shares that are in the hands of investors.
Listed companies are required to present a balance of its composition. This report must be delivered every three or six months, as the case may be.
Reading a stock index also involves examining its changes over time. Current indices always start with a fixed value based on stock prices on your start date, but not everyone follows this method. Therefore, it can be a source of misunderstandings.
If one index gains 500 points in a day, while another only adds 20, it might appear that the first index outperformed. However, if the former started the day at 30,000 points and the other at 300, it follows that, in percentage terms, the gains for the latter were considerable.
What are the main stock indices?
Between the major US stock indices There is the Dow Jones Industrial Average, better known as dow jones, which is made up of 30 companies. Also, the S&P 500, which includes 500 of the largest companies on the New York Stock Exchange. Lastly, do not forget the Nasdaq 100which links 100 of the largest non-financial firms.
On the other hand, the most outstanding indices of Europe are the Eurostoxx 50, which covers the 50 largest companies in the eurozone. On the other hand, the DAX 30, the main German index containing the strongest companies on the Frankfurt Stock Exchange; the FTSE100 from the London Stock Exchange; the ACC 40 of the Paris Stock Exchange; and the IBEX 35of 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 preponderant of China, made up of the most prominent companies on the Shanghai Stock Exchange. The same role played by Hang Seung Index in Hong Kong and the KOSPI in South Korea.
Talking about Latin Americayou have the CPIwhich contains at 35 most influential firms of the Mexican Stock Exchange (BMV). At least a third of them are owned by magnate Carlos Slim.
Another is the Bovespa, made up of the 50 most important companies on the São Paulo stock exchange; the merval from Argentina; the IPSA From Chile; the MSCI COLCAP from Colombia; the IBC of Caracas, made up of 6 companies from Venezuela.
Also, 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 the 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 planet.