Swiss Stock Market Ends Trading Session with a 0.45% Decline on June 16
The Swiss Market's Tumultuous Day
On Monday, June 16, the notably temperamental Swiss Market saw a slight decrease of 0.45%, bringing the closing figure down to 12,090.87 points. During the day, it touched a high of 12,155.41 points and a low of 12,072.29 points. The trading range, the distance between the highest and lowest points, clocked in at a sizable 0.68%.
Last week saw a 2.23% decline for the Swiss Market, but over the past year, it still boasts a meager increase of 0.15%. The index stands 8.17% below its highest valuation for the year (13,166.68 points) and 11.05% above its lowest this year (10,887.73 points).
A Crash Course on Stock Indexes
Each stock market index comes with its unique approach to calculation, but the key factor is usually the market capitalization of each contributing company. To calculate this, take the daily value of the stock on the specific exchange and multiply it by the total number of shares in circulation in the market.
Companies listed on the stock exchange are required to submit a report on their composition, which should be disclosed every three or six months, depending on the case. When reading an index, it's important to pay attention to its evolution over time.
Learning the Index's Language
Base Values
Most indices start with a specific base value (e.g., 100.0 or 1,000) on a certain date, making comparisons of performance over time a breeze. The index level at any point in time demonstrates the cumulative performance of the underlying stocks relative to the base date.
Reading Index Levels
Change Over Time
Observe trends, moving averages, and percentage changes to assess the market's health and investment returns using index level tracking over daily, weekly, monthly, or annual intervals.
Comparisons
Indices are compared to their historical levels, other indices, or benchmarks to evaluate their relative performance.
Remember These Facts about Indices
- The methodology used to calculate an index impacts its interpretation. For instance, the S&P 500, a market-cap-weighted index, reflects the performance of larger companies more, while an equal-weighted index such as the S&P 500 Equal Weight gives equal influence to all companies.
- Corporate actions such as stock splits, mergers, and dividend payments are adjusted to ensure continuity in the index's movement.
- Indices may be rebalanced periodically to reflect changes in company size, sector representation, or other criteria.
A Quick Look at Calculation Methods
- Market-Cap Weighting (e.g., S&P 500)
- Each company's influence on the index is related to its market capitalization.
- Formula: Market cap = Share price × Number of outstanding shares.
- Weight of company in index = (Company's market cap) / (Total market cap of index)
- Price Weighting (e.g., Dow Jones)
- The index is obtained by adding the prices of all constituent stocks and then dividing by a divisor.
- Equal Weighting
- Each company is given equal weight.
- Other Methods
- Decile or Fractile Indexes, e.g., CRSP deciles
- Value-Weighted Indexes, e.g., using dividends
Take a Break: Santiago de los Caballeros' Forecast for June 16
Related Topics
- Switzerland
- Markets
- Swiss Stock Exchange
- Stocks
- Close
- News
[1] Investopedia. (2021). Stock Index. https://www.investopedia.com/terms/s/stockindex.asp[2] Kasten, W. J., & Mendenhall, E. E. (2016). Investment (10th ed.). Pearson.[3] Fama, E. F., & French, K. R. (2015). Investing. Wiley.
- In the volatile Swiss economy, the intersection of finance, business, and the industry sector plays a significant role in influencing the country's stock market performance.
- The Swiss Market's tumultuous day, despite a 0.45% decrease, showcased the impact of weathering market fluctuations on various industries.
