INDIAN STOCK MARKET

By : - VISHAL K. BAKHEDI
ENROLL NO : - MB104620
STOCK MARKET OR SHARE MARKET
A stock is a small share that represents a
partial ownership of a company.

A Stock market is the place where buying
and selling of stocks takes place. Nowadays
due to internet and advanced technology
buying and selling of stocks takes place
anywhere in India and also from foreign
country, there is no need to be physical
present in exchanges like NSE and BSE

STOCK MARKET
Stocks are issued by companies in order to
raise capitals and are bought by investors in
order to acquire a portion of the company.

INDIAN STOCK MARKET
There are 25 stock exchanges in the India.
Bombay stock exchange is the largest, with
over 6,000 stocks listed.
Established in the year 1875



STOCK MARKET
The National Stock Exchange (NSE),
located in Bombay, and it is India's first debt
market. It was set up in the year 1993 and it
was opened for trading in mid-1994








Name of Indian stock exchange
1. Bombay Stock Exchange
2. National Stock Exchange(Mumbai)
3. Banglore Stock Exchange
4. Utter Pradesh Stock Exchange(Kanpur)
5. Magadh Stock Exchange(Patna)
6. Ahmedabad Stock Exchange
7. Vadodara Stock Exchange(Baroda)
8. Bhubaneswar Stock Exchange
9. Calcutta Stock Exchange(Kolkata)
10. Madras Stock Exchange

Name of Indian stock exchange
11. Cochin Stock Exchange
12. Coimbatore Stock Exchange
13. Gauhati Stock Exchange
14. Hydrabad Stock Exchange
15. Madhya Pradesh Stock
Exchange(Indore)
16. Jaipur Stock Exchange
17. Ludhina Stock Exchange
18. Mangalore Stock Exchange
19. Pune Stock Exchange
20. Saurashtra Kutch Stock Exchange
Name of Indian stock exchange
21. Interconnected Stock Exchange Of India
22. United Stock Exchange Of India
23. MCX Stock Exchange Ltd
24. OTC Exchange Of India
25. Delhi Stock Exchange Ltd.
Stock market
Stock exchanges

Mainly there are two exchanges in India.


NSE (National stock exchange)
Nifty is listed with NSE.


BSE (Bombay stock exchange)
Sensex is listed with BSE.

Stock exchanges
Two types of Indices

Nifty
Sensex

Nifty - Nifty consist of a group of 50 shares.

Sensex - Sensex consist of a group of 30
shares.


Stock exchanges
Index in share market

Index consists of group of shares. Index
denotes the direction of the entire market.
Like when people say market is going up or
down then that means Index is going up or
down.

Index consists of High market capitalization
and High liquidity shares.
Stock exchanges
High Market capitalization shares -
Companies having highest number of
shares and highest price of each share.
Market capitalization is calculated by
multiplying current share price and number
of shares in the market.

High Liquidity shares - Shares in the
market with high volumes.

TRADING IN STOCK MARKET
One should have a demat and trading
account, computer and internet connection
and he/she can start the share trading or
investing from anywhere.

A person want to buy/sell stocks in the stock
market has to first place his/her order with a
broker or can do themselves using online
trading systems.
The stocks purchased will be sent to the you
either in physical or demat format. This
process is called Rolling Settlement Cycle



What is Demat account and why it is
required?
Demat (Dematerialization) is the process by
which an investor can get stocks converted
into electronic form maintained in an
account with the Depository Participant
(DP).
Depository Participant (DP) could be
organizations involved in the business of
providing financial services like banks,
brokers, financial institutions etc. DPs are
like agents of Depository.
Cont
Depository is an organization responsible to
maintain investor's securities in the
electronic form.
In India there are two such organizations
called NSDL (National Securities Depository
Ltd.) and
CDSL (Central Depository Services India
Ltd.)



Is a demat account a must?
The market regulator, the Securities and
Exchange Board of India (SEBI), has made
it compulsory to open the demat account if
you want to buy and sell stocks.
How to open a Demat account?
You have to approach a DP to open a
Demat account. Most banks are DP
participants so you may approach them.
A broker and a DP are two different people.
A broker is a member of the stock
exchange, who buys and sells stocks on his
behalf and also on behalf of his customers.



Important terms in stock market and in stock trading

Open - The first price at which the stock
opens when market opens in the morning.

High - The stock price reached at the
highest level in a day.

Low - The stock price reached the lowest
level in a day.


Important terms in stock market and in stock trading

Close - The stock price at which it remains
after the end of market timings or the final
price of the stock when the market closes
for a day.

Volume - Volume is nothing but quantity.

Bid - The Buying price is called as Bid
price.

Offer - The selling price is called offer price.

Important terms in stock market and in stock trading

Bid Quantity - The total number of stocks
available for buying is called Bid Quantity.

Offer Quantity - The total number of stocks
available for selling is called Offer Quantity.

Buying and selling of stocks - Buy is also
called as demand or bid and selling is also
called as supply or offer.First selling and
then buying (this only happens in day
trading) is called as shorting of stocks or
short sell.

Important terms in stock market and in stock trading

Stock Trading - Buying and Selling of
stocks is called stock trading.

Transaction - One complete cycle of buying
and selling of stocks is called One
Transaction.

Squaring off - This term is used to
complete one transaction. Means if you buy
then have to sell (means square-off) and if
you sell then you have to buy (means
square-off).

Important terms in stock market and in stock trading

Limit Order - In limit order the buying or
selling price has to be mentioned and when
the stock price comes to that price then your
order will get executed with the mentioned
price by you

Market Order - When you put buy or sell
price at market rate then the price get
executes at the current rate of market. The
market order get immediately executed at
the current available price



Different types of stock trading
Day trading and Delivery trading are the two
main types of stocks trading.

Day trading -
Buying and selling of stocks on daily basis is
called day trading this is also called as Intra
day trading. Whatever you buy today you
have to sell it today OR whatever you sell
today you have to buy it today and very
importantly during market hours that is 9.00
am to 3.30 pm (Indian time).

Different types of stock trading
Delivery Trading
In Delivery Trading, as the name say, you have to take the
delivery of stocks and after getting these stocks in your demat
account you can sell them at anytime (or you can hold them till
you want, there is no restriction). In delivery trading you need to
have the amount required to buy stock for example, if you want
to buy 100 stocks of Reliance at price 500 than you must have
(100*500) Rs. 5000 in your account; once you purchased these
stocks will get deposited in your demat account (say after
basically, trading day and 2 additional days). Then you can sell
these stocks when the price of these stocks goes up or else you
can sell whenever you want.
Please Note - First you have to buy and sell. You cant sell
before buying in delivery trading while its possible in day
trading.





Investment in Short term, Mid term and Long term trading

Short Term Trading -
Stock trading done from one week to couple
of months is called short term.

Mid term Trading -
Stock trading done from one month to
couple of months, say six to eight months is
called mid term trading.




Investment in Short term, Mid term and Long term trading

Long term trading -
Stock trading done form couple of months to
couple of years is called long term trading.
Companies whose fundamentals are good
and have good future plans then the stocks
of these companies are used for long term
trading.
Generally traders having good capital go for
long term trading.

Stock Market Conditions
There are two ways to describe the general
conditions of the stock market:
BULL MARKET
BEAR MARKET

BULL MARKET -
A Bull Market indicates the constant upward
movement of the stock market. A particular
stock that seems to be increasing in value is
described to be bullish
Stock Market Conditions
BEAR MARKET

A bear market indicates the continuous
downward movement of the stock market.
stock that seems to be decreasing in value
is described to be bearish.


How Are Indices Of Sensex And Nifty Calculated
Sensex (sensitive index) has been calculated
since 1986 and initially it was calculated
based on the Total Market Capitalization
methodology and the methodology was
changed in 2003 to Free Float Market
Capitalization.

The Sensex is calculated for every 15
seconds
How Are Indices Of Sensex And Nifty Calculated
Free Float Market Capitalization

The value of all the shares available for
public trading excluding the promoter
equity, holdings through FDI Route,
holdings by private corporate, and
holdings by employee welfare funds.
Why free flow market capitalization
1. It depicts the market more rationally.
2. It removes undue influence of government
or promoter share holding, there by giving
the equal opportunity for companies to be
in the sensex.
3. Almost all the indices world over are
calculated by this methodology.
4. It gives fund managers more authentic
information for benchmark comparisons.
Calculation of market capitalization



Market capitalization of a co. is determined by
multiplying the price of its stock by the
number of shares issued by the company.
How Sensex Index is calculated
The formula for calculating the sensex =

(sum of Free Float Market capitalization of 30
benchmark stocks)* Index Factor

Where;
Index Factor = 100/market cap value in
1978-79
100 is value during 1978-79
Example on Sensex Index calculation
Assume sensex has only 2 stocks namely SBI
and RELIANCE. Total shares in SBI are 500
out of 200 are held by government and only
300 are available for public trading.
Reliance has 1000 shares out of which 500
are held by promoters and 500 are available
for trading. Assume price of SBI stock is Rs
100 & Reliance is 200.


Example on sensex calculation
Solution
Then Free Float Cap of these two company
= (300*100+500*200)
= 30,000+1,00,000
= 1,30,000

Assume market cap during the year 1978-79
was 25000
Then SENSEX = 1,30,000*100/25000
= 520

Methodology



The methodology in the example is exactly
followed to calculate the SENSEX. Only
difference being the inclusion of 30 stocks.
Index closure


The closing SENSEX on any trading day is
computed taking the weighted average of all
the traders on SENSEX constituents in the
last 30 minutes of trading session.
How Nifty Index is calculated
The National Stock Exchange (NSE) is
associated with Nifty
The calculation of Nifty is same as we
calculated SENSEX. But with two key
differences.
1. Base year is 1995 and base value is 1000
2. Nifty is calculation based on 50 stocks.
everything else reaming the same in nifty
index calculation as well
CAUSES OF PRICE FLUCTUATION
1. DEMAND AND SUPPLY
2. BANK RATE
3. SPECULATIVE PRESSURE
4. ACTIONS OF UNDERWRITERS AND
OTHER FINANCIAL INSTITUTIONS
5. CHANGE IN COMPANYS BOARD OF
DIRECTORS
6. FINANCIAL POSITION OF THE COMPANY

CAUSES OF PRICE FLUCTUATION
7. TRADE CYCLE
8. POLITICAL FACTORS
9. SYMPATHETIC FLUCTUATIONS
10. OTHER FACTORS:
A. EXPECTED MONSOON
B. PERSONAL HEALTH OF HEAD OF
GOVERNMENT OR CHAIRMAN OF THE
COMPANY
C. OIL PRICES IN THE INTERNATIONAL
MARKET