Introduction to Indian Stock Market..

An effort made by Financial Club-FINALY$T, IBA GN

Bombay Stock Exchange (BSE) is the oldest stock exchange in Asia. It was established as "The Native Share & Stock Brokers Association" in 1875. BSE is now synonymous with Dalal Street. The Short form of the BSE-Sensitive Index is SENSEX. The base year of SENSEX is 1978-79 and the base value is 100. Number of Constituent Companies -30.

Incorporated in November 1992. Recognized as a stock exchange in April 1993.

In October 1995, It Became largest stock exchange in the country.

Number of Constituent Companies -50.

The short form of the BSE-Sensitive Index, it is a "Market Capitalization-Weighted" index of 30 stocks representing a sample of large, wellestablished and financially sound companies.

Days Weightage (%)=

Market Cap of Stock X 100 Total Market Cap.

Market Capitalisation Weighted Method.

Market Capitalisation Weighted Method. SENSEX=

Total Market Capitalization of 30 companies in the Index Index Divisor*

*it is only link to original base period value of SENSEX * Base Market Cap/ Base value(100)

To measure market movements.

Benchmark for funds performance.

For index based derivative products.

Market capitalization It is the total market value, at the current stock exchange list price multiplied by the total number of equity shares issued by the company.

SENSEX is continuously updated every 15 seconds on all trading stations connected to BSE.

Sensex Measure of the performance of the collection of 30 blue chip stocks traded on the BSE, considered to represent the barometer of market activity and sentiment

Primary market A market for new issues of shares debentures and bonds, where investors apply directly to the issuer for allotment on a pre specified basis (price minimum application amount etc.)

Primary Market (IPOs) Secondary market

Portfolio A collection of assets or investments of an individual or organization. A portfolio may contain all the financial assets such as shares, debentures, Govt. bonds etc. by the same individual or organization

Stock Stock means representation of the ownership in a company. Stock, share, security, equity, and scrips mean one and same.

Stock exchange It is an organized market place for buying and selling listed securities.

Stock brokers A member of the stock exchange who is licensed to buy or sell shares on his own or on his clients behalf. He charges commission brokerage on the deals.

Brokerage It is a commission charged by a broker. The maximum brokerage chargeable, as stipulated by SEBI is at present 2.5% of the trade value.

Bid Ask

Blue chip The term blue chip refers to stock of well known companies with stable businesses. These shares are actively traded, as the companys growth prospects are considered good.

Bear market A bear market refers to a continuous phase of declining share prices. Bear markets are characterized by over all pessimism as market participants expect price to decline in future

Bull market It refers to a continuous phase of rising share prices. Bull market are characterized by optimism about the upward movement of prices in the future.

Buy back The repurchase by company of its own stocks or bonds.

Opening Price Days High Days Low Closing price

Dividend It is the amount of money or stock that a company distributes to its shareholders, in the ratio that they hold share in the company.

Listed Securities Securities listed on a stock exchange, as opposed to the permitted securities, which are not listed on the exchange but can be traded on the exchange.

Face value The nominal value printed on the face of the share, debenture or bond. It is also known as par value

Online trading The sale and purchase of securities over the internet or through a brokers proprietary software.