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Stock Market Indices

Presented By:
Priti Kopade Bhagyashree Powale Ankita Sawant Nikhat Shaikh Pranoti Shinde

M-3023 M-3039 M-3046 M-3048 M-3053

Contents
Introduction Bse and Nse Indices
 

INTRODUCTION:

ck ?? to rket S a m

q A stock market is a public market for the trading of company stock and derivatives at an agreed price; these are securities listed on a stock exchange as well as those only traded privately. q q A place where shares, stocks and bonds are bought and sold. q

STOCK MARKET INDICES :
ØStock market indices are the barometer of the stock market. ØBSE SENSEX,NSE-50 etc are some of the market indices.

Their usefulness:
ü Indices help to recognize broad trends in the market. ü The investor can use the indices to allocate the funds rationally among the stocks. ü Technical analysts use these indices to predict the future market. ü Indices function as a status report on the general economy.

ü

Determinants of a Stock Index
Liquidity Diversification Optimum Size Market Capitalization Averaging

BOMBAY STOCK EXCHANGE BSE
Bombay Stock Exchange is the oldest stock exchange in Asia with a rich heritage of over 133 years of existence. BSE is the first stock exchange in the country which obtained permanent recognition (in 1956) from the Government of India under the Securities Contracts (Regulation) Act (SCRA) 1956. Over the past 133 years, BSE has facilitated the growth of the Indian corporate sector by providing it with cost and time efficient access to resources.

SENSEX (BSE30)

The index includes 30 companies which figure in top 100 in terms of market capitalization and are also among the leaders in their industry groups.

Presently the following are the constituent companies:

ACC , Infosys , ICICI Bank , Dr . Reddy ’ s Lab , SBI , CIPLA , Zee Telefilms , Nestle India , RPL , RIL , HCL Tech ., Bajaj Auto , BHEL , Castrol , BSES , Colgate Palmolive , Hindalco , Grasim , Glaxo , Hero Honda , Gujarat Ambuja Cements , HLL , HPCL , ITC , L & T , MTNL , Ranbaxy , TISCO , TELCO and Satyam .

NATIONAL STOCK EXCHANGE (NSE)
The National Stock Exchange of India (NSE) situated in Mumbai - is the largest and most advanced exchange with 1016 companies listed and 726 trading members. The NSE is owned by the group of leading financial institutions such as Indian Bank or Life Insurance Corporation of India.

Standard and Poor’s CRISIL NSE Exchange NIFTY
S&P CNX NIFTY is an S&P endorsed Stock Index owned by the India Index Services Ltd (IISL). It is a highly diversified index, accurately reflecting the overall market conditions and is composed of 50 liquid stocks. (NSE, CRISIL and S&P).

Use of Indices

National Stock Exchange Indices

Bombay Stock Exchange Indices

Priti
M - 3023

Kopade

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Signals of stock price increase


1.

RISE IN EARNINGS
If a company earns 100 Rs.per share for the past 2 years & its earning are know 120 Rs. per share i.e a 20% increase , consider is increase as positive. As the saying goes , “Earnings drive the market.”

2.

INCREASE IN ASSETS AS DEBTS ARE STABLE OR DECREASING
Key to growing the book value of company. Rising book value has a positive impact on market value which in turn tend to strive stock price up.



3.

POSITIVE PUBLICITY FOR INDUSTRY

  

4. 5.

HEAVY INSIDER OR CORPORATE Powerful Demographics

BUYING

If a company generates lots of profit from the teenage market and market is going to expand. Low P/E Relative to Industry or Market If the industry P/E ratio is 20 and you are looking at a stock that has a P/E of 15, all things being equal, that great. The company has room for growth, and you have a good value.

  

6.

The Trend is your Friend

HERO

HONDA

MOTOR LTD INDIA

Driven By The Trust Of Our Customers

 Type : Public company BSE:HEROHONDA M  Founded : January 19, 1984 in Gurgaon,Haryana, India  Headquarters : New Delhi, India  Key people : Brijmohan Lal Munjal (chairman & founder)  Toshiaki Nakagawa (joint managing director)  Pawan Munjal (CEO)  Industry : Automotive  Products : Motorcycles, Scooters  Revenue : US$ 2.8 billion  Website : www.Herohonda.com

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The Hero Honda Group’s market capitalization
Market capitalisation *
USD million

31-3-1996

31-3-2005

31-3-2000

Change In Price

3 months

1 year

Intra day

n Change: -19.20(1.14%) 

-30.35(0.19%)  n Open: 1,675.00 16,229.27  Close: 1,671 Close: 16,255.97

Change: Open:

Compare with BSE

n Last Trade: 1 , 671 . 00INR n Change: 20.55(1.21%) 

Hero Honda

Price Earning Ratio
BHAGYASHREE S. POWALE SYBMS ROLL NO. M-3039

Definition

Determining Share Prices

Present Value of Growth Opportunities (PVGO)

Other related measures

Two analytical models

EFFECTS OF STOCK MARKET ON INDIAN ECONOMY
n Wealth effect n n Effect on pension n n Investment n n Raising funds for companies

EFFECT ON COMPANIES
n Difficult to issue share rights n n Firm is trying to take over n n A collapsing share price is often a reflection

of badly performing firm

STOCK MARKET ON JANUARY 2008
n Already since the start of the year the FTSE-100 has fallen 7%.

Yesterday, the stock market fell 3% of 190 points on fears related to the growing credit crunch. In particular, American bank Citibank wrote off $18billion from its mortgage defaults. It hopes this will draw a line under the losses in the derivatives market.

n n Although, mortgage defaults in the UK are not such a problem in

the UK. The UK is been squeezed by the shortage of capital as investors are unwilling to risk purchasing any ’subprime’ related debt. This has caused the cost of borrowing to increase, it means that mortgage costs have increased despite the cut in interest rates.

n

FACTORS THAT WILL AFFECT THE STOCK MARKET IN THE CURRENT YEAR
n Slow down in growth n n Cut in interest rates n n Credit crisis n n

CURRENT BSE INDICES
BSE AUTO BANKEX BANKNIFTY CAPITAL GOODS CONSUMER DURABLES BSE FMCG BSE HEALTH BSE IT CARE BSE METALS OIL& GAS BSE PSU BSE TECK BSE SMALL CAP BSE MID CAP 6850.00 9583.75 8504.55 13165.67 3957.17 2746.09 4830.08 5160.63 16015.03 9593.95 9131.91 3165.86 7994.98 6330.23 29.71 17.08 8.40 0.97 52.56 2.64 31.35 1.38 14.19 0.80 11.56 8.86 48.92 26.30