Bearish day for the Bovespawhich opens on Monday, February 6 with slight decreases in 0.4%until the 108,085.03 points, after the start of the opening session. If we compare the data with past days, the Bovespa accumulates four sessions in a row in negative figures.
Taking into account the last seven days, the Bovespa marks a drop in 3.73%so that in interannual terms it still maintains a decrease of the 3.23%. He Bovespa a 5.41% below its maximum so far this year (114,270.07 points) and a 3.76% above its minimum price for the current year (104,166 points).
Stock indices… What for?
a stock index It is an indicator that measures how the value of a certain set of assets evolves.so it collects 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 signatures with specific characteristics such as having a similar market capitalization or belonging to the same industry, 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 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 shares of an entity. Generally, 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 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
Today there are various indices and they can partner based on their geography, sectors, company size or even asset typeFor 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 component is the market capitalization of each company that integrates it. This is obtained by multiplying the value of the security on the corresponding stock market by the total number of shares that are on the market.
Firms listed on the stock exchange are required to present a balance of its composition. Said report must be delivered every three or six months, as appropriate.
Reading a stock index also involves paying attention to 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. Therefore, it can be misleading.
If one index adds 500 points in a day, while another only adds 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.
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. Also, 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 associates 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; he 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 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 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; he Merval from Argentina; he IPSA From Chile; he MSCI COLCAP from Colombia; he 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; he 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.
