Local markets under tension: BEL-20 Index shows fluctuating trends

A stock market index is a tool that shows how the value of a certain sentence of assets changes. It is important to understand that various indices can consist of a variety of companies or industries. These indices are used by financial markets around the world to pursue trends and moods in the business environment.

Every index has special criteria according to which the companies are selected. This often includes market capitalization, i.e. the total value of the shares given by a company, as well as belonging to certain industries. Some indices even include only a handful of shares, while other hundreds of companies take into account.

The importance of stock market indices goes beyond the pure number indicator; They are indicators of the investor trust and the condition of markets. If investors lose confidence in the markets, the share price usually also falls. In addition, these indices help to measure the performance of asset managers and give investors the opportunity to compare risk and return.

The development of the indices over time

stock exchange indices have not recently been relevant; Their roots go back to the late 19th century. At that time, journalist Charles H. Dow observed that the share prices tended to climb or fall together. This led to the creation of two indices: one for the 20 most important railway companies and another for 12 shares from different industries.

Nowadays there is a variety of indices that are compiled due to regional conditions, diversity of sectors or company sizes. The US Nasdaq index, for example, includes the 100 largest technology companies, including heavyweights such as Apple and Microsoft.

Each stock market index has its own calculation methodology, whereby the market capitalization of the companies contained is the relevant criterion. This means that the development of an index also depends on the changes in the stock prices of individual companies. Investors should make sure that a relatively large point gain of an index does not always mean a better percentage increase than a small point gain from another.

An example is the Dow Jones, which contains 30 industrial companies, or the S&P 500, which combines the 500 largest companies at NYSE. In Europe, indices such as the EuroStoxx 50, the Dax 30 in Germany and the FTSE 100 take central positions in London. In Asia, Nikkei 225 in Japan or the SSE Composite Index in China are important.

There are also global indices, such as the MSCI World, which includes companies from 23 developed countries, or the MSCI Emerging Markets that combine companies from emerging countries. These indices are crucial for investors who want to create at an international level because they enable a better assessment of the global market processes.

A look at the importance of the indices

The current movements within the BEL-20 index and other important indices show that despite the uncertainties in the markets, there is a certain level of stability. For investors, it is crucial to analyze the trends and data carefully in order to be able to make well -founded decisions. Therefore, stock market indices are not just numbers on a paper; They are a crucial tool for market analyzes and investment decisions across different regions and sectors.

The persistent volatility in the markets this year can also be explained by a number of economic and geopolitical factors. Inflation remains high in many regions of the world, which influences the monetary policy of central banks. In the United States, the Federal Reserve tried to reduce inflation pressure through interest rate increases and monetary policy tightening measures, but this also has an impact on the stock markets. At the same time, there are efforts in the EU to keep their economy stable in view of the energy crisis and the Ukraine conflict. Solution approaches vary, but everyone involved agreed that a sustainable solution is necessary to regain the trust of investors.

in Asia, in particular, investors in particular the economic development in China, which is challenged by strict covid-19 measures and their economic consequences. It remains to be seen how the measures for the global economy and its financial markets will have an impact. The volatile markets show how connected the financial systems are global and how changes in a market can quickly affect others.

Current economic key figures

According to the last reports, the inflation rate in the United States is about 6.2%, which continues to provide investors. In Europe, an inflation of about 8.5% is reported, with energy prices playing a significant role. With regard to economic growth, a forecast of the International Monetary Fund (IMF) shows that growth for 2023 could be in the larger economic nations at 2.5%, which represents a mitigation compared to previous years. The IMF also emphasizes that uncertainty are frustrating factors in terms of geopolitical tensions and inflation that could affect investors' trust.

The international trade environment also remains tense, with persistent supply chain problems and a significant increase in raw material prices. It is expected that the volatility of the markets will continue to exist in the coming months, while investors are trying to adapt to the changing conditions.

relevant indices and their meaning

In the current economic landscape, the dax remains one of the most important indices in Europe, and shows the performance of the 30 largest and most liquid companies on the Frankfurt stock exchange. When looking at the performance of the DAX in recent months, it can be seen that despite the uncertainty in the markets, it shows a moderate, albeit fluctuating, growth tendency. The companies in the DAX are often leading in their sectors and offer investment options that are attractive for many investors.

on a global level, the has often served as a barometric benchmark for the general performance of the US economy and the stock markets. In larger economic recessions, indices such as the S&P 500 have often shown a more volatile reaction that affects the general market mood. Current statistics show that the S&P 500 has increased by about 7.5% in the past twelve months, which shows that despite the volatility there are areas that attract investors.