Opening session of hikes for the ATXwhich begins on Tuesday, January 24 with slight ascents of the 0.29%until the 3,329.37 points, after the start of the opening session. If we compare the value with previous days, the ATX chain three successive days of earnings.
In the last week, the ATX accumulates an increase of 1.05% although, on the contrary, in the last year it still maintains a decrease in the 13.24%. The ATX a 0.38% below its maximum so far this year (3,341.94 points) and a 5.37% above its minimum price for the current year (3,159.71 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 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 firms with specific requirements such as having a similar market capitalization or belonging to the same type of industry, likewise, 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 company shares. Generally, if investors are not confident, stock prices tend to fall.
They also work to measure the performance of an asset manager and they allow investors to have comparisons 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 investigate 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
Today there are various indices and they can be grouped based on their geography, sectors, company size or even asset typeFor 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 is it calculated and how to read them?
Each stock index has its own way of calculating, but the main component is the market capitalization of each company that integrates it. This is obtained by multiplying the daily value of the share in the corresponding stock market by the total number of shares that are in circulation in the market.
Publicly traded companies are required to present a balance of its composition. Said report must be made public every three or six months, as appropriate.
Reading a stock index also implies taking into account its changes over time. New indices always start with a fixed value based on security prices on their start date, but not everyone follows this method. Therefore, it can lead to failures.
If one index sees an increase of 500 points in one day, while another only adds 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 seen that, in percentage terms, the gains for the latter were more important.
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 includes 500 of the largest companies on the New York Stock Exchange. Finally, the Nasdaq 100which links 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. He too DAX 30, the main German index containing the most prominent 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 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 is listed as the most representative of China, made up of the most relevant 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 consolidated firms on 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 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.
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; 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.