Negative day for Nasdaq 100which begins on Wednesday, February 8 with slight drops in the 0.34%until the 12,685.57 points, after the start of the opening session. If we compare the figure with past dates, the Nasdaq 100 it turns the tables with respect to that of the previous day, where a rise of 0.87% was recorded, demonstrating that it is incapable of setting a clear trend in recent dates.
Taking into account the last week, the Nasdaq 100 marks an ascent from 2.61%; although for a year there has still been a decrease in 12.94%. He Nasdaq 100 a 0.92% below its maximum so far this year (12,803.14 points) and a 18.1% above its minimum price for the current year (10,741.22 points).
What is a stock index and what is it for?
a stock index is an indicator that shows how the value of a given set of assets changesso it takes data from various 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 companies 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 investments in shares and shares of an entity. If investors are not confident, stock values 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 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 in our economy there are various indices and they can be put together based on their location, sectors, company size or even the type of assetFor example, the US Nasdaq index is made up of the 100 largest largely technology-related companies 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 daily value of the bond in the corresponding stock market by the total number of shares that are in the hands of investors.
Firms listed on the stock market are required to present a balance of its composition. Said report must be disclosed every three or six months, as the case may be.
Reading a stock index also implies analyzing its variations 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 lead to inaccuracies.
If one index grows 500 points in one day, while another only adds 20, it might appear that the former performed better. But, if the first started the day at 30,000 points and the other at 300, it can be concluded that, in percentage terms, the gains for the second were more important.
The main 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. 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 brings together 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. He too DAX 30, the main German index containing the strongest 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 Asiathe main stock indices are the nikkei 225, made up of the 225 largest companies on the Tokyo Stock Exchange. Furthermore, there is the SSE Composite Index, is seen as the main one in China, made up of the most relevant 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 Latin Americayou have the CPIwhich contains the 35 most consolidated firms on 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; he Merval from Argentina; he IPSA From Chile; he MSCI COLCAP from Colombia; he IBC de Caracas, made up of 6 companies from Venezuela.
Similarly, 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.
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