Day without changes for the ATXwhich begins on Wednesday, April 6 with a variation of the 0.1%until the 3,249.42 pointsafter the start of the opening session. Regarding past days, the ATX adds three successive days in negative values.
Compared to the last week, the ATX record a drop in 3.09%; on the other hand, in the last year it still maintains a rise in 1.76%. The ATX stands a 19.92% below its maximum so far this year (4,057.59 points) and a 11.27% above its minimum valuation for the current year (2,920.29 points).
Stock market indices… for what?
a stock index It is an indicator that shows how the price of a certain set of assets changesfor which it takes data from different companies or sectors of a fragment of the market.
These indicators are mainly used by the stock exchanges of each country and each of them can be integrated by firms with different specificities such as having a similar market capitalization or belonging to the same type of business, 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 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. Generally, if investors lack confidence, stock values 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.
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
Today there are various indices and they can be associated based on their geography, 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 it calculated and how to read them?
Each stock index has its own calculation methodbut 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 share in the corresponding stock market by the total number of shares that are 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 involves examining its changes over time. New indices always appear with a fixed value based on the prices of the securities on your start date, but not everyone follows this method. Therefore, it can be a source of misunderstandings.
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 former started the day at 30,000 points and the other at 300, it can be concluded that, in percentage terms, the gains for the latter were considerable.
Major stock indices
Between the major US stock indices There is the Dow Jones Industrial Average, better known as dow jonesmade up of 30 companies. Similarly, the S&P 500comprising 500 of the largest companies on the New York Stock Exchange. Lastly, appears the Nasdaq 100which brings together 100 of the largest non-financial firms.
On the other hand, the most outstanding indices of Europe are the Eurostoxx 50covering the 50 largest companies in the eurozone. On the other hand, the DAX 30the main German index that contains the most outstanding 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.
On AsiaThe main stock indices are the Nikkei 225composed of the 225 largest companies on the Tokyo Stock Exchange. There is also the SSE Composite Indexwhich is listed as the most notable in 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 IPCwhich contains at 35 most prestigious firms of the Mexican Stock Exchange (BMV). At least a third of them are part of the estate of tycoon Carlos Slim.
Another is the Bovespamade up of the 50 most important companies on the São Paulo stock exchange; the merval from Argentina; the ITSELF From Chile; the IGBC of Bogota; 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 Worldwhich includes 1,600 companies from 23 developed countries; the MSCI Emerging Marketsmade 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.