down day for him Taiwan Weightedwhich begins on Thursday, September 1, with notable drops in 1.58%until the 14,856.94 points, after opening. Comparing this data with that of previous days, the Taiwan Weighted interrupted with the positive streak of market prices of the last two sessions.
In relation to the profitability of the last week, the Taiwan Weighted marks a decrease in 2.26% and in the last year it still maintains a decrease in 11.26%. The Taiwan Weighted stands a 19.81% below its maximum this year (18,526.35 points) and a 6.5% above its minimum price for the current year (13,950.62 points).
What is a stock index and what is it for?
a stock index is an indicator that shows how the value 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 markets of different countries of the world and each of them can be integrated by signatures with certain 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 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, share prices tend to fall.
They also work to measure the performance of an asset manager and allow investors to analyze comparisons between return 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. closely watched how company stocks tended to go up or down together in price, 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 can be aggregated based on geographic location, sectors, company size, or even asset typeFor 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 to read an index?
Each stock index has its own calculation method, but the main factor is the market capitalization of each firm that integrates it. This is obtained by multiplying the value of the day of the action in the corresponding stock market by the total number of shares that are in the hands of investors.
Companies listed on the stock exchange are required to present a balance of its composition. This report must be published every three or six months, as the case may be.
Reading a stock index also requires examining its variations over time. Current 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 a Source of misunderstandings.
If one index sees a 500-point increase in one day, while another only gains 20, it might seem like the first index outperformed. However, if the former started the day at 30,000 points and the other at 300, it can be deduced that, in percentage terms, the gains for the latter were larger.
What are the main stock indices?
Between the major US stock indices There 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 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 that contains the most prominent 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 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 appears as 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 Latin Americayou have the CPIwhich contains at 35 most influential firms of the Mexican Stock Exchange (BMV). At least a third of them are owned by magnate 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.