bad day for him KOSPIwhich begins on Tuesday, January 3 with slight drops in the 0.44%until the 2,215.78 points, after opening. Analyzing this data with that of previous days, the KOSPI accumulates four consecutive days of negative numbers.
Regarding the last week, the KOSPI notes a decrease in 4.37%so that from a year ago it still maintains a decrease in 26.45%. The KOSPI a 0.44% below its maximum this year (2,225.67 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 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 the countries and each of them can be integrated by companies with specific requirements such as having a similar market capitalization or belonging to the same type of industry, there are also 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. 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 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 carefully analyze 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 They can be grouped according to their 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 is a stock index measured?
Each stock index has its own way of being measured, but the main component is the market capitalization of each firm 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 in the hands of investors.
Firms that are listed on the stock market are required to present a balance of its composition. Said report must come to light every three or six months, as appropriate.
Reading a stock index also requires taking into account its evolution over time. Current indices always appear with a fixed value based on security prices on their start date, but not everyone follows this method. Therefore, it can lead to inaccuracies.
If one index boosts by 500 points in a day, while another only gets 20, it might appear that the former performed better. However, if the former started the day at 30,000 points and the other at 300, it can be assumed that, in percentage terms, the gains for the latter were higher.
These are the main stock indices
Between the major US stock indices is the Dow Jones Industrial Average, better known as Dow Jonesmade up of 30 companies, the S&P 500, which comprises 500 of the largest companies on the New York Stock Exchange. Finally, it is necessary to mention the Nasdaq 100which unites 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. Also, 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 Asiawe have the nikkei 225, made up of the 225 largest companies on the Tokyo Stock Exchange. There is also the SSE Composite Index, which is listed as the main one 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 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 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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