Bearish session for the IBEX 35which begins the day on Monday, August 22, with slight decreases in 0.58%until the 8,289.38 points, after the start of the opening session. Regarding days past, the IBEX 35 chains four successive sessions in descent.
Taking into account the last week, the IBEX 35 accumulates a drop in 1.63%so in year-on-year terms it still accumulates a decrease in 7.09%. The IBEX 35 stands a 7.21% below its maximum so far this year (8,933.60 points) and a 8.43% above its minimum price for the current year (7,644.60 points).
What is a stock index and what is it for?
a stock index It is an indicator that shows how the price of a certain set of assets evolves.for which you need to have data from various companies or sectors of a part of the market.
These indicators are mainly used by the stock exchanges of the 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 line of business, likewise, there are some indices that only consider 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 tend to fall.
They also work to measure the performance of an asset manager and allow comparisons between profitability 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. carefully researched how company stocks tended to go up or down in price together, so he created two indices: one containing the top 20 railroad companies (it was the biggest industry at the time), as well as 12 actions of other types of businesses
Currently there are various indices and can be grouped based on geography, sectors, company size or even asset typeFor 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 component is the market capitalization of each company that integrates it. This is obtained by multiplying the value of the day of the bond in the corresponding stock market by the total number of shares that are in circulation in the market.
Companies listed on the stock exchange are required to present a balance of its composition. Said report must be disclosed every three or six months, as appropriate.
Reading a stock index also requires being careful of its changes over time. New 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 confusing.
If one index gains 500 points in one day, while another only adds 20, it might appear that the first index 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 important.
These are the main stock indices
Between the major US stock indices There is the Dow Jones Industrial Average, better known as dow jones, of which 30 companies are part. Similarly, the S&P 500, which includes 500 of the largest companies on the New York Stock Exchange. Finally comes the Nasdaq 100which associates 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 continentwe have 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 relevant 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 the Latin American regionyou have the CPIwhich contains at 35 most powerful firms of the Mexican Stock Exchange (BMV). At least a third of them are owned by tycoon 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.