M.

Com Part I

ADVANCED FINANCIAL ACCOUNTING PROJECT WORK

ANALYSIS OF NIFTY AND SENSEX
Mahesh Chandra Mohanty

12

ANALYSIS OF NIFTY AND SENSEX

ACKNOWLEDGEMENT First of all, I would like to send my sincere thanks to Mr. Suresh Laurik for his helpful hand in the completion of my project and I would also like to take an opportunity to thank all the people who helped me in collecting

necessary information and making of the report. I am grateful to all of them for their time, energy and wisdom. Getting a project ready requires the work and effort of many people. I would like all those who have contributed in completing this project.

Mahesh Mohanty

DECLARATION

I Mahesh Chandra Mohanty, Class M.com I of Lords College, Mumbai hereby declare that the project entitled Analysis of Nifty and Sensex. is an original work and the same has not been submitted to any other institutions for the award of any other degree. The feasible suggestion has been duly incorporated in consultation with the supervisior

Mahesh Mohanty

INDEX 1. Introduction of Nifty 2. Partnership 3. Highlights 4. Eligibility Criteria 5. Index Calculation Formula 6. 50 Major Companies 7. Introduction of Sensex 8. Calculation 9. Constituents 10. Milestones 11. Major crashes in 2000 12. Major Falls 13. Conclusion 14. Bibliography

S&P CNX Nifty

Introduction The S&P CNX Nifty is the headline index on the National Stock Exchange of India Ltd. (NSE). The Index tracks the behavior of a portfolio of blue chip companies, the largest and most liquid Indian securities. It includes 50 of the approximately 1430 companies listed on the NSE, captures approximately 65% of its float-adjusted market capitalization and is a true reflection of the Indian stock market. The S&P CNX Nifty covers 22 sectors of the Indian economy and offers investment managers exposure to the Indian market in one portfolio. The S&P CNX Nifty stocks represents about 65% of the free float market capitalization of the stocks listed at National Stock Exchange (NSE) as on March 30, 2012. S&P CNX Nifty has shaped up as the largest single financial product in India, with an ecosystem comprising: exchange traded funds (onshore and offshore), exchange-traded futures and options (at NSE in India and at SGX and CME abroad), other index funds and OTC derivatives (mostly offshore). The S&P CNX Nifty index is a free float market capitalisation weighted index. The index was initially calculated on full market capitalisation methodology. From June 26, 2009, the computation was changed to free float methodology. The base period for the S&P CNX Nifty

index is November 3, 1995, which marked the completion of one year of operations of NSE's Capital Market Segment. The base value of the index has been set at 1000, and a base capital of Rs 2.06 trillion.The S&P CNX Nifty Index was developed by Ajay Shah and Susan Thomas.

Nifty chart between the period 1992 -2012 Partnership The S&P CNX Nifty is owned and managed by India Index Services and Products Ltd. (IISL), which is a joint venture between the NSE and CRISIL. IISL is Indias first specialized company focused on an index as a core product. IISL has a licensing and marketing agreement with Standard & Poors, who is a world leader in index services.

Highlights The S&P CNX Nifty is a 50 stock, float-adjusted marketcapitalization weighted index for India, accounting for 21 diversified sectors of the economy. It is used for a variety of purposes, such as benchmarking fund portfolios, index based derivatives and index funds. The S&P CNX Nifty is derived from economic research and is created for those interested in investing and trading in Indian equities. Market Representation. The S&P CNX Nifty stocks represent about 65% of the total float-adjusted market capitalization of the National Stock Exchange (NSE). Diversification. The S&P CNX Nifty is a diversified index, accurately reflecting the overall market. The reward-to-risk ratio of S&P CNX Nifty is higher than other leading indices, offering similar returns but at lesser risk. Liquidity. Market impact cost is the best measure of the liquidity of a stock. It accurately reflects the costs faced when actually trading an index. For a stock to qualify for inclusion in the S&P CNX Nifty, it has to reliably have market impact cost below 0.50 %, when doing S&P CNX Nifty trades of Rupees (Rs) 20 million. The current impact cost of the

S&P CNX Nifty for a portfolio size of Rs 20 million is 0.13%. Hedging Effectiveness. The basic risk of the S&P CNX Nifty futures is lower than other index portfolios, due to the liquidity of the S&P CNX Nifty constituent stocks and of the NSE. In addition, the S&P CNX Nifty has higher correlations with typical investment portfolios in India, compared to other indices. These two factors allow for effective hedging of the Index. Index Family S&P CNX Defty. The S&P CNX Defty is a U.S. dollardenominated index based on the S&P CNX Nifty. This index was developed to provide a benchmark of Indian stocks to international investors, providing them with an instrument for measuring returns on their equity investment in dollar terms. This ensures that the risk arising out of currency fluctuation is covered through the S&P CNX Defty. Eligibility Criteria Selection of the index set is based on the following criteria: Liquidity (Impact Cost) Float-Adjusted Market Capitalization Float

 Domicile Eligible Securities Other Variables Liquidity. For inclusion in the index, the security should have traded at an average impact cost of 0.50 % or less during the last six months, for 90% of the observations. Impact cost is the cost of executing a transaction in a security in proportion to its index weight, measured by market capitalization at any point in time. This is the percentage mark up suffered while buying/selling the desired quantity of a security compared to its ideal price (best buy + best sell)/2. Float-Adjusted Market Capitalization. Companies eligible for inclusion in the S&P CNX Nifty must have at least twice the float-adjusted market capitalization of the current smallest index constituent. Float. Companies eligible for inclusion in the S&P CNX Nifty should have at least 10% of its stock available to investors (float). For this purpose, float is stocks which are not held by the promoters and associated entities (where identifiable) of such companies.

Domicile. The company must be domiciled in India and trade on the NSE. Eligible Securities. All common shares listed on the NSE (which are of equity and not of a fixed income nature) are eligible for inclusion in the S&P CNX Nifty index. Convertible stock, bonds, warrants, rights, and preferred stock that provide a guaranteed fixed return are not eligible. Other Variables A company which comes out with an IPO is eligible for inclusion in the index if it fulfills the normal eligibility criteria for the index -- impact cost, float-adjusted market capitalization and float -- for a three-month period instead of a six-month period. Index Calculations Formulas The S&P CNX Nifty index is computed by dividing the float-adjusted market capitalization of the index component securities as of current date (MCn) by the floatadjusted market capitalization of the same securities as of initial date (MC1) multiplied by the index value as of initial date (I1):

In = (I1 * MCn)/MC1 where: MCn = Float-adjusted index market capitalization as of the current date. MCn = where: Qi = Number of float adjusted shares outstanding of the ith issue as of the current date. Pi = Security price of the ith issue as of the current date. N = Total number of component securities used in the index calculation. The S&P CNX Nifty currently consists of the following 50 major Indian companies: Here is the list of 50 companies that form part of S&P CNX Nifty Index as on 30th April 2012: Ambuja Cements Asian Paints Ltd. ACC Ltd. Ltd Axis Bank Ltd. Bharat Petroleum Bajaj Auto Ltd. Corporation Ltd Bharti Airtel Ltd. Cairn India Ltd. Bank of Baroda Bharat Heavy Electricals Ltd. Ranbaxy Laboratories Ltd. Reliance Industries Ltd.

Cipla Ltd. Hero MotoCorp Ltd. Hindalco Industries Ltd. Hindustan Unilever Ltd. Housing Development I T C Ltd. ICICI Bank Ltd. Infosys Ltd. Infrastructure Development Finance Co. Ltd. Jaiprakash Associates Ltd. Oil & Natural Gas Corporation Ltd. Power Grid Corporation of India Ltd. Finance Corporation Ltd.

Coal India Ltd. DLF Ltd. Dr. Reddy's Laboratories Ltd. GAIL (India) Ltd.

Reliance Infrastructure Ltd. Sesa Goa Ltd. Siemens Ltd.

State Bank of India HCL Technologies Steel Authority of Ltd . India Ltd. Sterlite Industries HDFC Bank Ltd. (India) Ltd. Sun Jindal Steel & Pharmaceutical Power Ltd. Industries Ltd. Kotak Mahindra Tata Consultancy Bank Ltd. Services Ltd. Larsen & Toubro Ltd. Mahindra & Mahindra Ltd. Maruti Suzuki India Ltd. NTPC Ltd. Tata Motors Ltd. Tata Power Co. Ltd. Tata Steel Ltd. Wipro Ltd. Punjab National Bank

SENSEX
The Bombay Stock Exchange building located on Dalal Street, Mumbai. The BSE SENSEX, also called the BSE 30 or simply the SENSEX, is a free-float market capitalization-weighted stock market index of 30 well-established and financially sound companies listed on Bombay Stock Exchange (BSE). The 30 component companies which are some of the largest and most actively traded stocks, are representative of various industrial sectors of the Indian economy. Published since January 1, 1986, the SENSEX is regarded as the pulse of the domestic stock markets in India. The base value of the SENSEX is taken as 100 on April 1, 1979, and its base year as 1978-79. On 25 July 2001 BSE launched DOLLEX-30, a dollar-linked version of SENSEX. As of 21 April 2011, the market capitalisation of SENSEX was about 29,733 billion (US$538 billion) (42.34% of market capitalization of BSE), while its freefloat market capitalization was 15,690 billion (US$284 billion).

Calculation The Bombay Stock Exchange regularly reviews and modifies its composition to be sure it reflects current market conditions. The index is calculated based on a free float capitalization method, a variation of the market capitalization method. Instead of using a company's outstanding shares it uses its float, or shares that are readily available for trading. The free-float method, therefore, does not include restricted stocks, such as those held by promoters, government and strategic investors. Initially, the index was calculated based on the "full market capitalization method". However this was shifted to the free float method with effect from September 1, 2003. Globally, the free float market capitalization is regarded as the industry best practice. As per free float capitalization methodology, the level of index at any point of time reflects the free float market value of 30 component stocks relative to a base period. The market capitalization of a company is determined by multiplying the price of its stock by the number of shares issued by the company. This market capitalization is multiplied by a free float factor to determine the free float market capitalization. Free float factor is also referred as adjustment factor. Free float factor represents the percentage of shares that are readily available for trading.

The calculation of SENSEX involves dividing the free float market capitalization of 30 companies in the index by a number called index divisor.The divisor is the only link to original base period value of the SENSEX. It keeps the index comparable over time and is the adjustment point for all index adjustments arising out of corporate actions, replacement of scrips, etc. The index has increased by over ten times from June 1990 to the present. Using information from April 1979 onwards, the long-run rate of return on the BSE SENSEX works out to be 18.6% per annum, which translates to roughly 9% per annum. Constituents Main article: List of BSE SENSEX companies The BSE Sensex currently consists of the following 30 major Indian companies as of 17 February 2012.[1] No. 1 2 3 Company Housing Development Finance Corporation Cipla Bharat Heavy Electricals Industry Consumer finance Pharmaceuticals Electrical equipments Scrip 500010 500087 500103

No. 4 5 6 7 8 9

Company State Bank Of India HDFC Bank Hero Motocorp Infosys Oil and Natural Gas Corporation Reliance Industries

Industry Banking Banking Automotive Information Technology Oil and gas Oil and gas Power Metals and Mining Steel Conglomerate Automotive Automotive Consumer goods Conglomerate Metals and Mining

Scrip 500112 500180 500182 500209 500312 500325 500400 500440 500470 500510 500520 500570 500696 500875 500900

10 Tata Power 11 Hindalco Industries 12 Tata Steel 13 Larsen & Toubro 14 Mahindra & Mahindra 15 Tata Motors 16 Hindustan Unilever 17 ITC 18 Sterlite Industries

No. 19 Wipro

Company

Industry Information Technology Pharmaceuticals Oil and gas Banking Steel and power

Scrip 507685 524715 532155 532174 532286

20 Sun Pharmaceutical 21 GAIL 22 ICICI Bank 23 Jindal Steel & Power 24 Bharti Airtel 25 Maruti Suzuki 26 Tata Consultancy Services

Telecommunication 532454 Automotive Information Technology Power Real estate Automotive Metals and Mining 532500 532540 532555 532868 532977 533278

27 NTPC 28 DLF 29 Bajaj Auto 30 Coal India

Some of the historical replacements were:

DLF replaced Dr. Reddy's Lab on November 19, 2007.

Jaiprakash Associates Ltd replaced Bajaj Auto Ltd on March 14, 2008. Sterlite Industries replaced Ambuja Cements on July 28, 2008. Tata Power Company replaced Cipla Ltd. on July 28, 2008. Sun Pharmaceutical Industries replaced Satyam Computer Services on January 8, 2009 Hero Honda Motors Ltd. replaced Ranbaxy on June 29, 2009 Cipla to replace Sun Pharma from May 3, 2010 Grasim replaced JSPL in 2010 Bajaj Auto replaced ACC from Dec 6th, 2010 Coal India replaced Reliance Infrastructure and Sun Pharmaceutical replaced Reliance Communications from Aug 8th, 2011 .

Milestones

The graph of SENSEX from July 1997 to March 2011 Here is a timeline on the rise of the SENSEX through Indian stock market history.

1000, July 25, 1990 - On July 25, 1990, the SENSEX touched the four-digit figure for the first time and closed at 1,001 in the wake of a good monsoon and excellent corporate results. 2000, January 15, 1992 - On January 15, 1992, the SENSEX crossed the 2,000-mark and closed at 2,020 followed by the liberal economic policy initiatives undertaken by the then finance minister and current Prime Minister Dr Manmohan Singh. 3000, February 29, 1992 - On February 29, 1992, the SENSEX surged past the 3000 mark in the wake of the market-friendly Budget announced by Manmohan Singh. 4000, March 30, 1992 - On March 30, 1992, the SENSEX crossed the 4,000-mark and closed at 4,091 on the expectations of a liberal export-import policy. It was then that the Harshad Mehta scam hit the markets and SENSEX witnessed unabated selling. 5000, October 11, 1999 - On October 8, 1999, the SENSEX crossed the 5,000-mark as the Bharatiya

Janata Party-led coalition won the majority in the 13th Lok Sabha election.

6000, February 11, 2000 - On February 11, 2000, the information technology boom helped the SENSEX to cross the 6,000-mark and hit and all time high of 6,006. 7000, June 21, 2005 - On June 20, 2005, the news of the settlement between the Ambani brothers boosted investor sentiments and the scrips of RIL, Reliance Energy, Reliance Capital and IPCL made huge gains. This helped the SENSEX crossed 7,000 points for the first time. 8000, September 8, 2005 - On September 8, 2005, the Bombay Stock Exchange's benchmark 30-share index the SENSEX - crossed the 8000 level following brisk buying by foreign and domestic funds in early trading. 9000, December 9, 2005 - The SENSEX on November 28, 2005 crossed 9000 to touch 9000.32 points during mid-session at the Bombay Stock Exchange on the back of frantic buying spree by foreign institutional investors and well supported by local operators as well as retail investors.

10,000, February 7, 2006 - The SENSEX on February 6, 2006 touched 10,003 points during mid-session. The SENSEX finally closed above the 10,000-mark on February 7, 2006. 11,000, March 27, 2006 - The SENSEX on March 21, 2006 crossed 11,000 and touched a peak of 11,001 points during mid-session at the Bombay Stock Exchange for the first time. However, it was on March 27, 2006 that the SENSEX first closed at over 11,000 points. 12,000, April 20, 2006 - The SENSEX on April 20, 2006 crossed 12,000 and touched a peak of 12,004 points during mid-session at the Bombay Stock Exchange for the first time. 13,000, October 30, 2006 - The SENSEX on October 30, 2006 crossed 13,000 for the first time. It touched a peak of 13,039.36 and finally closed at 13,024.26. 14000, December 5, 2006 - The SENSEX on December 5, 2006 crossed 14,000. 15,000, July 6, 2007 - The SENSEX on July 6, 2007 crossed 15,000 mark. 16,000, September 19, 2007 - The SENSEX on September 19, 2007 crossed the 16,000 mark.

17,000, September 26, 2007 - The SENSEX on September 26, 2007 crossed the 17,000 mark for the first time. 18,000, October 9, 2007 - The SENSEX on October 9, 2007 crossed the 18,000 mark for the first time. 19,000, October 15, 2007 - The SENSEX on October 15, 2007 crossed the 19,000 mark for the first time. 20,000, October 29, 2007 - The SENSEX on October 29, 2007 crossed the 20,000 mark for the first time. 21,000, Jan 08, 2008 - The SENSEX on January 8, 2008 touched all time peak of 21078 before closing at 20873.[2] November 5, 2010 - The SENSEX on November 5, 2010 closes at 20,893.6 with highest peak in two years.

Major crashes since 2000 May 2006 On May 22, 2006, the SENSEX plunged by 1100 points during intra-day trading, leading to the suspension of trading for the first time since May 17, 2004. The volatility of the SENSEX had caused investors to lose Rs 6 lakh crore (US$131 billion) within seven trading sessions. The

Finance Minister of India, P. Chidambaram, made an unscheduled press statement when trading was suspended to assure investors that nothing was wrong with the fundamentals of the economy, and advised retail investors to stay invested. When trading resumed after the reassurances of the Reserve Bank of India and the Securities and Exchange Board of India (SEBI), the SENSEX managed to move up 700 points, still 450 points in the red. The SENSEX eventually recovered from the volatility, and on October 16, 2006, the SENSEX closed at an all-time high of 12,928.18 with an intra-day high of 12,953.76. This was a result of increased confidence in the economy and reports that India's manufacturing sector grew by 11.1% in August 2006.

13,000, October 30, 2006 - The SENSEX on October 30, 2006 crossed 13,000 and still riding high at the Bombay Stock Exchange for the first time. It took 135 days to reach 13,000 from 12,000. And 124 days to reach 13,000 from 12,500. On October 30, 2006 it touched a peak of 13,039.36 & closed at 13,024.26. 14,000, December 5, 2006 - The SENSEX on December 5, 2006 crossed 14,000 and touched a peak of 14028 at 9.58AM(IST) while opening for the day December 5, 2006.

15,000, July 6, 2007- The SENSEX on July 6, 2007 crossed another milestone and reached a magic figure of 15,000. it took almost 7 month and 1 day to touch such a historic miles

May 2009 On May 18, 2009, the SENSEX surged 2110.79 points from the previous closing of 12174.42 this leading to the suspension of trade for the whole day.This event created history in Dalal Street, by being the first ever time that trade had been suspended for an increase in value. This rally is primarily due to the victory of the UPA in the 15th General elections. Trading was open for that day only for 55 seconds. Initially 25 seconds and 30 seconds market reached upper freeze limit twice in that day itself. Effects of the subprime mortgage crisis in the U.S On Monday July 23, 2007, the SENSEX touched a new height of 15,733 points. On July 27, 2007 the SENSEX witnessed a huge correction because of selling by foreign institutional investors (FIIs) and global cues to come back to 15,160 points by noon. Following global cues and heavy selling in the international markets, the BSE SENSEX fell by 615 points in a single day on Wednesday August 1, 2007.

16,000, September 19, 2007- The SENSEX on September 19, 2007 crossed the 16,000 mark and

reached a historic peak of 16322 while closing. The bull hits because of the rate cut of 50 bit/s in the discount rate by the Fed chief Ben Bernanke on September 26, 2007 crossed the 17,000 mark for the first time, creating a record for the second fastest 1000 point gain in just 5 trading sessions. It failed however to sustain the momentum and closed below 17000. The SENSEX closed above 17000 for the first time on the following day. Reliance group has been the main contributor in this bull run, contributing 256 points. This also helped Mukesh Ambani's net worth to grow to over $50 billion or Rs.2 trillion. It was also during this record bull run that the SENSEX for the first time zoomed ahead of the Nikkei of Japan.

18,000, October 9, 2007- The SENSEX crossed the 18k mark for the first time on October 9, 2007. The journey from 17k to 18k took just 8 trading sessions which is the third fastest 1000 point rise in the history of the SENSEX. The SENSEX closed at 18,280 at the end of day. This 788 point gain on October 9 was the second biggest single day absolute gains. 19,000, October 15, 2007- The SENSEX crossed the 19k mark for the first time on October 15, 2007. It took just 4 days to reach from 18k to 19k. This is the fastest 1000 points rally ever and also the 640 point rally was the second highest single day rally in

absolute terms. This made it a record 3000 point rally in 17 trading sessions overall. Participatory notes issue On October 16, 2007, SEBI (Securities & Exchange Board of India) proposed curbs on participatory notes which accounted for roughly 50% of FII investment in 2007. SEBI was not happy with P-notes because it was not possible to know who owned the underlying securities, and hedge funds acting through P-notes might therefore cause volatility in the Indian markets. However the proposals of SEBI were not clear and this led to a knee-jerk crash when the markets opened on the following day (October 17, 2007). Within a minute of opening trade, the SENSEX crashed by 1744 points or about 9% of its value - the biggest intra-day fall in Indian stock markets in absolute terms till then. This led to automatic suspension of trade for 1 hour. Finance Minister P. Chidambaram issued clarifications, in the meantime, that the government was not against FIIs and was not immediately banning PNs. After the market opened at 10:55 AM, the index staged a comeback and ended the day at 18715.82, down 336.04 from the last day's close. This was, however not the end of the volatility. The next day (October 18, 2007), the SENSEX tumbled by 717.43

points 3.83 per cent to 17998.39. The slide continued the next day when the SENSEX fell 438.41 points to settle at 17559.98 at the end of the week, after touching the lowest level of that week at 17226.18 during the day. After detailed clarifications from the SEBI chief M. Damodaran regarding the new rules, the market made a 879-point gain on October 23, thus signalling the end of the PN crisis.

20,000, October 29, 2007- The SENSEX crossed the 20k mark for the first time with a massive 734.5 point gain but closed below the 20k mark. It took 11 days to reach from 19k to 20k. The journey of the last 10,000 points was covered in just 869 sessions as against 7,297 sessions taken to touch the 10,000 mark from 1,000 levels. In 2007 alone, there were six 1,000point rallies for the SENSEX. 21,000, January 8, 2008 Business Standard

January 2008 In the third week of January 2008, the SENSEX experienced huge falls along with other markets around the world. On January 21, 2008, the SENSEX saw its highest ever loss of 1,408 points at the end of the session. The SENSEX recovered to close at 17,605.40 after it

tumbled to the day's low of 16,963.96, on high volatility as investors panicked following weak global cues amid fears of a recession in the US. The next day, the BSE SENSEX index went into a free fall. The index hit the lower circuit breaker in barely a minute after the markets opened at 10 AM. Trading was suspended for an hour. On reopening at 10.55 AM IST, the market saw its biggest intra-day fall when it hit a low of 15,332, down 2,273 points. However, after reassurance from the Finance Minister of India, the market bounced back to close at 16,730 with a loss of 875 points.[3] Over the course of two days, the BSE SENSEX in India dropped from 19,013 on Monday morning to 16,730 by Tuesday evening or a two day fall of 13.9%.[3]

9,975, October 17, 2008 - SENSEX crashes below the psychological 5 figure mark of 10K, following extremely negative global financial indications in US and other countries. Exactly one year back in October 2007, SENSEX had gone past the 20K mark. 8701.07, October 24, 2008 lost 10.96% of its value on the intra day trade, the 3rd highest loss for a one day period in its history

Major falls Some major single-day falls of the SENSEX have occurred on the following dates:[6]

1. January 21, 2008 --- 1,408.35 points 2. Oct 24, 2008---1070.63 points 3. March 17, 2008 --- 951.03 points 4. July 6, 2009 --- 870 points 5. January 22, 2008 --- 857 points 6. February 11, 2008 --- 833.98 points 7. May 18, 2006 --- 826 points 8. October 10, 2008 --- 800.10 points 9. March 13, 2008 --- 770.63 points 10. December 17, 2007 --- 769.48 points 11. January 7, 2009 --- 749.05 points 12. March 31, 2007 --- 726.85 points 13. October 6, 2008 --- 724.62 points 14. October 17, 2007 --- 717.43 points 15. September 15, 2008 --- 710.00 points 16. September 22, 2011 --- 704.00 points 17. January 18, 2007 --- 687.82 points 18. November 21, 2007 --- 678.18 points 19. August 16, 2007 --- 642.70 points 20. August 17, 2009 --- 626.71 points 21. June 27, 2008 --- 600.00 points 22. February 24, 2011 --- 545.92 points 23. February 27, 2012 --- 477.82 points 24. November 16, 2010 --- 444.55 Points 25. February 4, 2011 --- 441.92 Points 26. November 12, 2010 --- 432 Points

Conclusion

S&P CNX Nifty and Sensex are based on proper calculation which show actual movement of market as it comprises those stocks which has more shares trading in the market. If the Sensex goes up, it means that the prices of the stocks of most of the major companies on the BSE have gone up. If the Sensex goes down, this tells you that the stock price of most of the major stocks on the BSE have gone down. Just like the Sensex represents the top stocks of the BSE, the Nifty represents the top stocks of the NSE. As the selection of a stock in sensex and nifty is adhere to specific way which gives a true and fair position of market. It gives idea to the investor that whether the market is bullish or bearish. By getting idea about it, one thing is affirmed that there is no precised way which will give that whether stock price will increase or decrease, it alll based on assumption and calculation. It is somewhat a prediction.

BIBLIOGRAPHY/REFERENCES
"http://en.wikipedia.org/w/index.php?title=BSE_SENSEX&oldid and nifty =512556001" BSE Sensex". Bseindia.com. 2003-09-01. And www.nseindia.com http://www.bseindia.com/about/abindices/bse30.asp. Retrieved 2012-02-19. Sensex hits 21,000; ends up 61 points - Rediff.com Business". In.rediff.com. 2008-01-08. http://in.rediff.com/money/2008/jan/08sensex.htm. Retrieved 2011-09-19. Business Bureau (2008-01-21). "The 10 biggest falls in SENSEX history". MarketWatch. http://www.rediff.com/money/2008/jan/21spec1.htm. Retrieved 2008-01-23. What are P-Notes?". October 17, 2007. http://www.rediff.com/money/2007/oct/17spec.htm. Retrieved February 21, 2011. Vaidyanathan, R. (Oct 24, 2007). "Why Participatory Notes are dangerous". The Hindu. http://www.thehindubusinessline.in/2007/10/24/stories/2007102 450800800.htm. Retrieved February 22, 2011. The Hindu News Update Service". Hindu.com. http://www.hindu.com/thehindu/holnus/001200801221826.htm. Retrieved 2011-09-19.