positive day for Taiwan Weightedwhich ended the session on Monday, February 20 with slight increases in 0.35%until the 15,534.02 points. He Taiwan Weighted scored a maximum of 15,575.32 points and a minimum of 15,436.66 points. The trading range for the Taiwan Weighted between its highest and lowest point (maximum-minimum) during this day it stood at the 0.89%.
In the last seven days, the Taiwan Weighted accumulates a drop in 0.07%so that in year-on-year terms it still maintains a decrease in the 14.42%. He Taiwan Weighted a 0.77% below its maximum so far this year (15,654.48 points) and a 9.4% above its minimum price for the current year (14,199.13 points).
Stock indices… What for?
a stock index It is an indicator that measures the evolution of the value of a certain set of assetsfor which it uses data from different companies or sectors of a fragment of the market.
These indicators are used mainly by the stock markets of each country and each of them can be integrated by signatures with specific characteristics 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 shares of an entity. 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 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 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 in humanity there are various indices and They can join a union based on their location, sectors, the size of the companies 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 factor 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.
Companies listed on the stock market are required to present a balance of its composition. Said report must be notified every three or six months, as appropriate.
Reading a stock index also implies observing its changes over time. Current indices always start with a fixed value based on stock prices on their start date, but not everyone follows this method. Therefore, it can be misleading.
If one index increases 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 concluded that, in percentage terms, the gains for the latter were considerable.
What are the major 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. Likewise, the S&P 500, which comprises 500 of the largest companies on the New York Stock Exchange. Finally, the Nasdaq 100which brings together 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. Also, the DAX 30, the main German index containing the most prominent 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. Also, the SSE Composite Index, which is listed as the most solid in 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 Latin Americayou have the CPIwhich contains the 35 most outstanding 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 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.
Finally, 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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