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  • Brokerage Structure:-
  • A) Primary data
  • Observation method:-
  • Telephonic survey:-
  • Personal interview:-
  • Mail questionnaire:-
  • B) Secondary data
  • Collection of Information:
  • Analyze The Information
  • Stock market
  • Function of stock market
  • Securities and Exchange Board of India
  • Organization Structure
  • Several Firsts
  • Major Factors That Affect Stock Price in stock market globally
  • Demand AND SUPPLY
  • Market Cap
  • What is "market capitalization"?
  • Earning/Price Ratio
  • Trading Styles
  • YEAR-2009
  • Market Segments
  • The role of stock exchanges
  • Raising capital for businesses
  • Mobilizing savings for investment
  • Facilitating company growth
  • Redistribution of wealth
  • Corporate governance
  • Creating investment opportunities for small investors
  • Government capital-raising for development projects
  • Barometer of the economy
  • Major stock exchanges
  • Impact of a US recession on India
  • Strength:
  • Weakness:
  • Threat :
  • Matrix

A Report on ³Analytical Study of Indian Stock Market´


1. Executive summary 3. Company Profile 4. Research Methodology 4.1 Title of the Study 4.2 Duration of the Project 4.3 Objective of Study 4.4 Data sources 4.5 Research approach 4.6 Findings and conclusions 4.7 Suggestions and recommendations 5. Core Study 6. SWOT


7. Conclusion 8. Bibliography 9. Questionnaire

Executive summary
This project is to study investors¶ trading preference with special reference to a Analytical study of Indian stock market. This project was done in Prabhat Financial Services Ltd., JAIPUR. Prabhat Financial Services Ltd is in stock broking service for over 15 years now. It has focused on strengthening its presence in the rapidly expanding retail broking market. Company has obtained SEBI registration to act as Portfolio Manager. The finance sector in India is booming and with the steady rise in the disposable income of people, there is a heightened cause for investments. With the inflation hitting the roof, one has to find ways to get returns at least as much as the inflation rate. Depositing the money in banks is just not the solution anymore. Thus the future of the finance sector in India is indeed bright. A market is an environment that allows buyers and sellers to trade or exchange goods, services, and information. These interactions define demand and supply characteristics and are therefore fundamental to economies. A market can be defined as a place where any type of trade takes place. Markets are dependent on two major participants ± buyers and sellers. Buyers and sellers typically trade goods, services and/ or information. Historically, markets were physical meeting places where buyers and sellers gathered together to trade. Although physical markets are still vital, virtual marketplaces supported by IT networks such as the internet have become the largest and most liquid. Some markets are very competitive, with a number of vendors selling the same kinds of products

or services. Conversely, some markets have low or no competition, particularly if the industry is protected by government legislation. The number of buyers and sellers involved will have a direct bearing on the price of the good or service to be sold, and has become known as the law of supply and demand. Where there are more sellers than buyers, the availability of supply will push down prices. If there are more buyers than sellers, the increased demand will push up prices. Markets can appear spontaneously when there are goods or services to be exchanged, or they can be planned and regulated.

Free markets operate under µlaissez-faire¶ conditions, in that the government does not intervene in how the market operates. These markets may be distorted if a seller gains monopoly power by managing the majority of supply (or indeed if a buyer develops monopsony power by managing demand). Governments or trade bodies often step in when such distortions undermine the smooth functioning of free markets.

The currency markets are the largest continuously traded markets in the world. Twenty four hours a day, seven days a week, governments, banks, investors and consumers are buying and selling every currency, leading to massive money flows constantly changing hands.

Stock markets have become highly complex markets that allow investors to buy shares in companies or in funds that aggregate companies or industries together. Most stock markets today are primarily electronic networks, although they often maintain a physical location for buyers, sellers and market makers to interact directly. Markets originally started as marketplaces usually in the center of villages and towns, for the sale or barter of farm produce, clothing and tools. These kinds of street markets developed into a whole variety of consumer-oriented markets, such as specialist markets, shopping centers, supermarkets, or even virtual markets such as eBay.


cocoa. it paid off for those who bought. then recovered and went up to 500 points up and finally settled for flat closing. oat. you MUST read this article! We have explained all the concepts and talked about all the "myths" that people have about the stock market! 4 . meat. commodity markets are once again under the spotlight. Commodity markets include: energy (oil. Now that's history. coal and increasingly renewable energy sources such as biodiesel) .e. So what should a small investor do now? Should he buy stocks or should be selling stocks that he holds? This article is a COMPLETE guide to the basics of making money in the stock market! If you are considering investing in the stock market. etc). went till 3oo points down. soft commodities and grains (wheat. markets opened in red. Albeit it could have been a gamble buying stocks before declaration of election results. on Tuesday. corn. and financial commodities such as bonds. cotton. Did you see the stock market rally on Monday in BSE and NSE? No one can say No! Everyone has seen it and everyone is wishing if he should have buy stocks before this rally. Transactions tend to be wholesale with large quantities of goods being transacted at low prices.With the rising price of oil and food. Capital goods markets help businesses to buy durable goods to be used in industrial and manufacturing processes. rice. Stock markets are going to be volatile for next few days. Today. sugar. frozen orange juice. coffee. A number of services can also be associated with these goods. soya beans. Commodities underpin economic activity. gas. i.

debentures. its partnership has grown to more than 80. Over 65% of goods in India are transported in trucks 5 . Pioneer in developing partners and agents for more than 30 years. the Shriram Group. becoming a Shriram Insight partner helps you service your clients and grow your business. Shriram Insight offers share broking service especially targeted at retail investors. dynamism & innovation 100% integrity & transparency never defaulted in financial commitments to its clients in maturity & interest payout Why investment in Shriram is safe Its core business is truck finance ² profitable with high demand. Shriram group has created products suited to maximum savings opportunity for retail clients. handling a wide range of products like fixed deposit. life insurance and general insurance.000 agents. Thus. is India's premier financial services chain.PROFILE OF THE ORGANISATION Established in the year 1974. Why Shriram Shriram is one of the few financial companies to have survived NBFC debacle Group has forged ahead even in adverse times by virtue of its vision. comprising 750 Branches and Service Centres. They are the largest player in Truck Financing and Chit funds in the Indian subcontinent. With increasing investment in stock market and growing volume in exchanges.

25.000 clients through its network of 460 branches spread across the country. others Capital gain bonds: NHAI. Debt. SAIL. daily market report. Liquid Company deposits: Hudco.They are clear leaders in truck finance as it is highly specialized business with few finance companies having succeeded in setting up organizational capability of managing risk They have well diversified business portfolio with wide geographical spread Shriram¶s Products Shriram Insight services more than 1. REC 6 . with highly secured payment gateways through leading banks in India Trading & demat account at nominal cost Trading in cash & derivatives Margin funding Commodities trading Research. Our offerings include: Share trading Call & Trade Online (Internet) trading. Intraday and Positional calls. daily technical analysis. company results analysis PRODUCT FEATURES Good returns to investors Advance information on forthcoming offers Best brokerage & adequate provision of forms SHRIRAM¶S DISTRIBUTION PRODUCTS Mutual funds: Equity. HDFC.

03% : 0. ICICI & IDBI bonds Initial public offers (IPOs) & NFOs Why Shriram financial products should be part of every distributor¶s portfolio: Diversified income & remunerative business opportunity Attractive incentive schemes announced periodically Shriram¶s Network NORTH Punjab Delhi Rajasthan Uttar Pradesh SOUTH Tamil Nadu Andhra Pradesh Karnataka Kerala EAST West Bengal Bihar Jharkhand Orissa WEST Gujarat Bihar Jharkhand Orissa Brokerage Structure:Intraday trading Delivery : 0.3% 7 .Tax-benefit schemes: 8% RBI.

research instrument.Exposure : 4 times of the deposit.45 days (1)DEFINES THE PROBLEM AND RESEARCH OBJECTIVES The objective of the study conducted was to study of market potential of online share trading. approach. (2)DEVELOPING RESEARCH PLAN The second stage of marketing research calls for developing a most efficient plan for gathering needed information. 8 . Secondary objective of customer survey was to know the customer awareness towards online share trading. Designing a research plan calls for taking decision on data sources research. sampling plan and contact methods. My other objectives were to find out the overall perception about the system and what motivates the people to think about going for online share trading. RESEARCH METHODOLOGY TITLE OF THE STUDY:³Analytical study of Indian stock market´ DURATION OF THE PROJECT:.

The observer will keenly observe the person at the time of the interview & record his behavior accurately. There are mainly two methods for the collection of the primary data which are given below. In the collection of the primary data. A) Primary Data B) Secondary Data A) Primary data Those data which are collected at first hand by the researcher especially for the purpose of the study .are known as primary Data . In this project research the collection of data is directly interviewing customer. primary data & secondary data. Survey Method. it requires the observer. Survey method:9 .The data is collected directly from the person in sample population.e. it is also one of The important method for the collection of data but it requires good & experienced observer who can observer The behavior of the respondent properly and record it with great accuracy. I have used survey method and use the questionnaire methods.DATA Sources There are two types of methods used in data collection i. y y Observational Method. Observation method:In the observation method.

It is most popular method for the collection of necessary data from the respondents. the interviewer will make call to respondents. y y y Telephonic survey. This method is used when the area to be covered is large and the survey has to be conducted in the specific limit. Personal interview. I have used the personal interview to know customer awareness towards online share trading. The interviewer will ask question in face to face direction to the respondents or group of respondents. inform the respondents about the purpose of the call and then he will ask the related questions to the respondents. the interviewer will personally meet the respondent and will take is interview. Mail questionnaire:In the mail questioner the interviewer will mail the questionnaire to the respondents and inform them about the purpose of the survey. Different types of the survey are given below. Telephonic survey:In the telephonic interview. It is mostly used when information to be collected is limited. In my survey. I have used survey method for the collection of the necessary data. Mail questionnaires. when the information to be collected is limited. 10 . This method is used. Also the time limit for the questionnaire is specified in the mail. I have visited respondents personally. Personal interview:In the personal interview.

In this project the approach used was survey approach because the main objective of our survey was to study of the market potential and have an idea about the customer awareness.com and GOOGLE search engine help in collecting the detailed information. Focus Group research 4. Different web sites like www. Findings and Conclusions 11 . 2. Analyze The Information. Experimental research. The information available is analyzed in the form of tables. These data has been collected from company dealer like Dealer profile. Collection of Information: The information was collected from customer by personally asking them Question and filling the Questionnaire. Observation research. RESEARCH APPROACH Out of 4 ways of research approaches i. internet and web sites. The secondary data are collected from the magazines. industrial profile. company profile are collected from the internet.e.sharekhan. Survey Research 3.B) Secondary data Any data which had been gathered earlier for other purposes are secondary data in hand of marketing research. 1. graphs and pie chart.

the vast majority of derivatives 'cancel' each other out (i. Many such relatively illiquid securities are valued as marked to model. now part of Euronext.). Core study Stock market A stock market is a public market for the trading of company stock and derivatives at an agreed price. as well as on the many regional exchanges.6 trillion US at the beginning of October 2008 .) The stocks are listed and traded on stock exchanges which are entities a corporation or mutual organization specialized in the business of bringing buyers and sellers of the organizations to a listing of stocks and securities together.e. The size of the world stock market was estimated at about $36. which traditionally refers to an actual value. Suggestions and Recommendation The suggestions given are on the basis of data collected. The stock market in the United States includes the trading of all securities listed on the NYSE. because it is stated in terms of notional values. 11 times the size of the entire world economy. the Deutsche Börse and the Paris Bourse. The total world derivatives market has been estimated at about $791 trillion face or nominal value. cannot be directly compared to a stock or a fixed income security.g. these are securities listed on a stock exchange as well as those only traded privately. OTCBB and Pink Sheets. It can be analyzed that which income group is in the need of which type of investment option. the NASDAQ. a derivative 'bet' on an event occurring is offset by a comparable derivative 'bet' on the event not occurring. rather than an actual market price. Moreover. The recommendations given can help in designing the portfolio of the client.After the analysis of the data some figures came out and they were tallied and then some inferences were drawn from them so that the recommendations can be given to follow.. the Amex. European examples of stock exchanges include the London Stock Exchange. e. 12 . The value of the derivatives market.

but also the economy on a large scale. the stock market is often considered the primary indicator of a country's economic strength and development. individual investors. or raise additional capital for expansion by selling shares of ownership of the company in a public market. The following deals with some of 13 . In fact. This eliminates the risk to an individual buyer or seller that the counterparty could default on the transaction. In this way the financial system contributes to increased prosperity. in marked contrast to the stability of (government insured) bank deposits or bonds. Stock prices fluctuate widely. for instance. History has shown that the price of shares and other assets is an important part of the dynamics of economic activity. in general. and can influence or be an indicator of social mood.Function of stock market The stock market is one of the most important sources for companies to raise money. meaning that they collect and deliver the shares. This allows businesses to be publicly traded. The stock market. and financial risk Riskier long-term saving requires that an individual possess the ability to manage the associated increased risks. compared to other less liquid investments such as real estate. This is something that could affect not only the individual investor or household. on the smooth operation of financial system functions. The smooth functioning of all these activities facilitates economic growth in that lower costs and enterprise risks promote the production of goods and services as well as employment. central banks tend to keep an eye on the control and behavior of the stock market and. Rising share prices. Therefore. tend to be associated with increased business investment and vice versa. The liquidity that an exchange provides affords investors the ability to quickly and easily sell securities. An economy where the stock market is on the rise is considered to be an up and coming economy. and guarantee payment to the seller of a security. Share prices also affect the wealth of households and their consumption. This is an attractive feature of investing in stocks. Financial stability is the raison d'être of central banks. Exchanges also act as the clearinghouse for each transaction.

This is certainly more important now that so many newcomers have entered the stock market. Sometimes there appears to be no rhyme or reason to the market. Mumbai Headquarters of SEBI Organization Details Headquarters Established Jurisdiction Head Mumbai. immersed in chat rooms and message boards. analysts. Television commentators. Over the years he has built himself a multi-billion-dollar fortune. individual investors. and $105. With each passing year. financial writers. Securities and Exchange Board of India SEBI Bhavan.[4] Buffett began his career with $100. the noise level in the stock market rises.000 from seven limited partners consisting of Buffett's family and friends. i.the risks of the financial sector in general and the stock market in particular.. At the same time. then plummet just as quickly. real estate and collectables). This is a quote from the preface to a published biography about the long-term value-oriented stock investor Warren Buffett. Stock prices skyrocket with little reason. Yet.e. and market strategists are all overtaking each other to get investors' attention. and people who have turned to investing for their children's education and their own retirement become frightened. The quote illustrates some of what has been happening in the stock market during the end of the 20th century and the beginning of the 21st century. despite all this available information. India 1992 India Chairman 14 . are exchanging questionable and often misleading tips. or have acquired other 'risky' investments (such as 'investment' property. Maharashtra. investors find it increasingly difficult to profit. only folly.

SEBI is headquartered in the popular business district of Bandra-Kurla complex in Mumbai. Southern and Western regional offices in New Delhi. he had been the chairman of NSDL (National Securities Depository Limited) ushering in paperless securities. he had served SEBI as a Senior Executive Director.in SEBI is the Regulator for the Securities Market in India. Chennai and Ahmadabad. Organization Structure Chandrasekhar Bhaskar Bhave is the sixth chairman of the Securities Market Regulator. Originally set up by the Government of India in 1988. Prior to taking charge as Chairman SEBI.4(1)(a) of the SEBI Act. Prior to his stint at NSDL.Chairman Term C B Bhave February 16.gov. Eastern. He is a former Indian Administrative Service officer of the 1975 batch.sebi. it acquired statutory form in 1992 with SEBI Act 1992 being passed by the Indian Parliament. The Board comprises[2] Name Designation As per CHAIRMAN (S. and has Northern. 2008 - Total Staff[1] 525 Official Website Website www. 1992) Mr CB Bhave Chairman SEBI 15 .Chaired by C B Bhave. Kolkata.

BSE is now a corporatized and demutualised entity incorporated under the provisions of the Companies Act. 1956. Ministry of Corporate Affairs Dr G Mohan Gopal Director.4(1)(d) of the SEBI Act. Bhopal 1992) Member (S.Mr KP Krishnan Joint Secretary. Earlier an Association Of Persons (AOP). 1992) Mr MS Sahoo Whole Time Member.4(1)(d) of the SEBI Act. 1992) Member (S. What is now popularly known as BSE was established as "The Native Share & Stock Brokers' Association" in 1875. 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 1956. Member (S. 1992) Member (S. National Judicial Academy. pursuant to 16 . It migrated from the open outcry system to an online screen-based order driven trading system in 1995.4(1)(d) of the SEBI Act. 1992) Member (S. 1992) Mr Anurag Goel Secretary.4(1)(b) of the SEBI Act. SEBI Dr KM Abraham Whole Time Member. SEBI Mr Mohandas Pai Director. Ministry of Finance Member (S.4(1)(b) of the SEBI Act. Infosys Bombay Stock Exchange Introduction Bombay Stock Exchange is the oldest stock exchange in Asia with a rich heritage. BSE's pivotal and pre-eminent role in the development of the Indian capital market is widely recognized.4(1)(d) of the SEBI Act. now spanning three centuries in its 133 years of existence.

hedging and arbitrage. including 12 sectoral indices. It is an index of 30 stocks representing 12 major sectors. The market capitalization as on December 31. called "SPIcE" is listed on BSE. the global leader in ETFs through its shares® brand. S. has created the 'iShares® BSE SENSEX India Tracker' which tracks the SENSEX. BSE offers 21 indices. Moreover. With demutualization. There is perhaps no major corporate in India which has not sourced BSE's services in raising resources from the capital market. BSE has two of world's best exchanges. and is tracked worldwide.700 listed companies. and is sensitive to market sentiments and market realities. BSE provides an efficient and transparent market for trading in equity. The BSE Index. BSE has always been at par with the international standards. Deutsche Börse and Singapore Exchange. An investor can choose from more than 4. Barclays Global Investors (BGI). The SENSEX is constructed on a 'free-float' methodology. is India's first stock market index that enjoys an iconic stature. 2007 stood at USD 1. 2005 notified by the Securities and Exchange Board of India (SEBI). Apart from the SENSEX.the BSE (Corporatization and Demutualization) Scheme. which for easy reference. The ETF enables investors in Hong Kong to take an exposure to the Indian equity market.79 trillion. are classified into A. BSE is the world's number 1 exchange in terms of the number of listed companies and the world's 5th in transaction numbers. Over the past 133 years. BSE has facilitated the growth of the Indian corporate sector by providing it with an efficient access to resources. The first Exchange Traded Fund (ETF) on SENSEX. as its strategic partners. This agreement has made SENSEX and other BSE indices available to investors in Europe and America. It has a nation-wide reach with a presence in more than 359 cities and towns of India. It brings to the investors a trading tool that can be easily used for the purposes of investment. T and Z groups. BSE has entered into an index cooperation agreement with Deutsche Börse. Today. SPIcE allows small investors to take a long-term view of the market. B. The systems and processes 17 . debt instruments and derivatives. SENSEX. trading.

BSE continues to innovate.are designed to safeguard market integrity and enhance transparency in operations. It has successfully launched a reporting platform for corporate bonds in India christened the ICDM or Indian Corporate Debt Market and a unique ticker-cum-screen aptly named 'BSE Broadcast' which enables information dissemination to the common man on the street. BSE also has a wide range of services to empower investors and facilitate smooth transactions: Investor Services: The Department of Investor Services redresses grievances of investors.000 Trader Workstations located across over 359 cities in India. BSE was the first exchange in the country to provide an amount of Rs. BSE launched a nationwide investor awareness programme. BSE launched the Directors Database and ICERS (Indian Corporate Electronic Reporting System) to facilitate information flow and increase transparency in the Indian capital market.'Safe Investing in the Stock Market' under which 264 programmes were held in more than 200 cities. it is an amount higher than that of any exchange in the country. BOLT is currently operating in 25. the ICERS facilitates the corporates in sharing with BSE their corporate announcements. It is also the first exchange in the country and second in the world to receive Information Security Management System Standard BS 7799-2-2002 certification for its BSE On-line Trading System (BOLT). BSE is the first exchange in India and the second in the world to obtain an ISO 9001:2000 certification. it has become the first national level stock exchange to launch its website in Gujarati and Hindi to reach out to a larger number of investors. The BSE On-line Trading (BOLT): BSE On-line Trading (BOLT) facilitates on-line screen based trading in securities. While the Directors Database provides a single-point access to information on the boards of directors of listed companies. 18 . In recent times. In 2006.1 million towards the investor protection fund.

BSE introduced the world's first centralized exchangebased Internet trading system.com. Surveillance: BSE's On-Line Surveillance System (BOSS) monitors on a real-time basis the price movements.000 people have attended the BTI programmes Awards The World Council of Corporate Governance has awarded the Golden Peacock Global CSR Award for BSE's initiatives in Corporate Social Responsibility (CSR).Pacific HRM awards for its efforts in employer branding through talent management at work. BSE Training Institute: BTI imparts capital market training and certification. BSEWEBX.BSEWEBX. History 19 . This initiative enables investors anywhere in the world to trade on the BSE platform.com: In February 2001. The Human Resource Management at BSE has won the Asia . volume positions and members' positions and real-time measurement of default risk. health management at work and excellence in HR through technology y Drawing from its rich past and its equally robust performance in the recent times. in collaboration with reputed management institutes and universities. It offers over 40 courses on various aspects of the capital market and financial sector. More than 20. BSE will continue to remain an icon in the Indian capital market. market reconstruction and generation of cross market alerts. 2006 and March 31 2007 have been awarded the ICAI awards for excellence in financial reporting. y The Annual Reports and Accounts of BSE for the year ended March 31.

over a century of experience is a proud achievement.the BSE TECk Index. Since then. The journey in the 20th century has not been an easy one. 1994 two new index series viz.. Delhi. DOLLEX-30 and the country's first free-float based index . In 2001. BSE. the 'BSE-200' and the 'DOLLEX-200'. BSE launched the dollar-linked version of BSE-100 index on May 22. It has several 20 . BSE shifted all its indices to the free-float methodology Several Firsts At par with the international standards. came out with a Stock Index-SENSEX. the stock market in the country has passed through good and bad periods. larger market capitalization and the new industry sectors. A lot has changed since 1875 when 318 persons by paying a then princely amount of Re. The launch of SENSEX in 1986 was later followed up in January 1989 by introduction of BSE National Index (Base: 1983-84 = 100). Over the decades. in 1986. it is being calculated taking into consideration only the prices of stocks listed at BSE. Till the decade of eighties.Mumbai. 1. 2006. BSE has continuously been increasing the range of its indices. With a view to provide a better representation of the increasing number of listed companies. In order to fulfill the need for still broader. there was no measure or scale that could precisely measure the various ups and downs in the Indian stock market.that subsequently became the barometer of the Indian stock market. The BSE National Index was renamed BSE-100 Index from October 14. Over the years.For the premier stock exchange that pioneered the securities transaction business in India. BSE-500 Index and 5 sectoral indices were launched in 1999. BSE launched on 27th May. BSE has come a long way in attuning itself to the varied needs of investors and market participants. segment-specific and sector-specific indices. BSE has in fact been a pioneer in several areas. Ahmedabad and Madras. 1996 and since then. became members of what today is called Bombay Stock Exchange Limited (BSE). It comprised 100 stocks listed at five major stock exchanges in India . BSE launched BSE-PSU Index. Calcutta.

06028. First in India to introduce Equity Derivatives First in India to launch a Free Float Index First in India to launch US$ version of BSE SENSEX First in India to launch Exchange Enabled Internet Trading Platform First in India to obtain ISO certification for a stock exchange 'BSE On-Line Trading System¶ (BOLT) has been awarded the globally recognised the Information Security Management System standard BS7799-2:2002.firsts to its credit even in an intensely competitive environment. National Stock Exchange of India National Stock Exchange Limited Type Location Stock Exchange Mumbai.on February 18.19. 72.19. First to have an exclusive facility for financial training First in India in the financial services sector to launch its website in Hindi and Gujarati Shifted from Open Outcry to Electronic Trading within just 50 days First bell-ringing ceremony in the history of the Indian capital markets (listing ceremony of Bharti Televentures Ltd./&#20.2002) ./&#20.06028°N 72. India 19°3 37 N Coordinates 72°51 35 E&#20.85972°E&#20.85972 21 .


National Stock Exchange of India Limited Mr. Ravi Narain Managing Director INR

Key people Currency

No. of listings 1587 Market Cap US$ 1.46 trillion (2006) S&P CNX Nifty Indexes CNX Nifty Junior S&P CNX 500 Website http://www.nse-india.com/

The National Stock Exchange of India Limited (NSE), is a Mumbai-based stock exchange. It is the largest stock exchange in India in terms of daily turnover and number of trades, for both equities and derivative trading.[1]. Though a number of other exchanges exist, NSE and the Bombay Stock Exchange are the two most significant stock exchanges in India, and between them are responsible for the vast majority of share transactions. The NSE's key index is the S&P CNX Nifty, known as the Nifty, an index of fifty major stocks weighted by market capitalization. NSE is mutually-owned by a set of leading financial institutions, banks, insurance companies and other financial intermediaries in India but its ownership and management operate as separate entities. There are at least 2 foreign investors NYSE Euronext and Goldman Sachs who have taken a stake in the NSE. As of 2006[update], the NSE VSAT terminals, 2799 in total, cover more than 1500 cities across India . In October 2007, the equity market capitalization of the companies listed on the NSE was US$ 1.46 trillion, making it the second largest stock exchange in South Asia. NSE is the third largest Stock Exchange in the world in terms of the number of trades in equities. It is the second fastest growing stock exchange in the world with a recorded growth of 16.6%.

Origins NSE building at BKC The National Stock Exchange of India was promoted by leading Financial institutions at the behest of the Government of India, and was incorporated in November 1992 as a tax-paying company. In April 1993, it was recognized as a stock exchange under the Securities Contracts (Regulation) Act, 1956. NSE commenced operations in the Wholesale Debt Market (WDM) segment in June 1994. The Capital Market (Equities) segment of the NSE commenced operations in November 1994, while operations in the Derivatives segment commenced in June 2000. Innovations NSE has remained in the forefront of modernization of India's capital and financial markets, and its pioneering efforts include:

Being the first national, anonymous, electronic limit order book (LOB) exchange to trade securities in India. Since the success of the NSE, existent market and new market structures have followed the "NSE" model. Setting up the first clearing corporation "National Securities Clearing Corporation Ltd." in India. NSCCL was a landmark in providing innovation on all spot equity market (and later, derivatives market) trades in India. Co-promoting and setting up of National Securities Depository Limited, first depository in India[2]. Setting up of S&P CNX Nifty. NSE pioneered commencement of Internet Trading in February 2000, which led to the wide popularization of the NSE in the broker community.



y y


Being the first exchange that, in 1996, proposed exchange traded derivatives, particularly on an equity index, in India. After four years of policy and regulatory debate and formulation, the NSE was permitted to start trading equity derivatives Being the first and the only exchange to trade GOLD ETFs (exchange traded funds) in India. NSE has also launched the NSE-CNBC-TV18 media centre in association with CNBCTV18, a



it is the one of the most important stock exchange in the world

S&P CNX Nifty
S&P CNX Nifty is a well diversified 50 stock index accounting for 21 sectors of the economy. It is used for a variety of purposes such as benchmarking fund portfolios, index based derivatives and index funds. S&P CNX Nifty is owned and managed by India Index Services and Products Ltd. (IISL), which is a joint venture between NSE and CRISIL. IISL is India's first specialised company focused upon the index as a core product. IISL has a Marketing and licensing agreement with Standard & Poor's (S&P), who are world leaders in index services.

The total traded value for the last six months of all Nifty stocks is approximately 65.68% of the traded value of all stocks on the NSE Nifty stocks represent about 65.34% of the total market capitalization as on Mar 31, 2009. Impact cost of the S&P CNX Nifty for a portfolio size of Rs.2 crore is 0.16% S&P CNX Nifty is professionally maintained and is ideal for derivatives trading


y y


Sensex & the Nifty The Sensex is an "index". When people are buying more stocks. The Sensex is an indicator of all the major companies of the BSE. but they are not as popular as the BSE and the NSE. so in that case you need to know the functioning of the market. the Nifty represents the top stocks of the NSE. It gives you a general idea about whether most of the stocks have gone up or most of the stocks have gone down. Demand AND SUPPLY One of the major factors affecting stock price is demand and supply.Most of the stock trading in the country is done though the BSE & the NSE. So let us discuss about the different factors affecting the stock price in this article. The trend of the stock market trading directly affects the price. As you know that you cannot predict the stock market. is the Bombay Stock Exchange and the NSE is the National Stock Exchange. These are the major stock exchanges in the country. 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. If the Sensex goes up. Major Factors That Affect Stock Price in stock market globally When you wish to invest in the stock market. What is an index? An index is basically an indicator. then the price of 25 . it means that the prices of the stocks of most of the major companies on the BSE have gone up. The BSE is situated at Bombay and the NSE is situated at Delhi. Just in case you are confused. then you should always make a good survey of the whole market. the BSE. There are other stock exchanges like the Calcutta Stock Exchange etc. If the Sensex goes down. There are some major factors that affect stock price. The Nifty is an indicator of all the major companies of the NSE.

com and look up the company whose market cap you are interested in finding out! The figure in front of ³Mkt. You should always keep in mind that it is not the stock but the market capitalization of the company that determines the worth of the company. simply multiply the ³current share price´ by the ³number of shares issued by the company´! Just to give you an idea. News 26 . how do YOU calculate the market cap of a particular company? You don¶t! Just go to a website like MoneyControl. then the price of that stock falls. you should be very careful when you decide to invest in the Indian stock market. So.705. On the other hand if people are selling more stocks. ³small-cap´ and ³large-cap´ stocks. if you were to buy all the shares of a particular company. what is the amount you would have to pay? That amount is called the ³market capitalization´! To calculate the market cap of a particular company. Cap´ will be the market cap value. has a market cap of ³Rs. What is "market capitalization"? You probably think that you have never heard of the term ³market capitalization´ before. So market cap is another factor that affects stock price.that particular stock increases. Market Cap Never try to guess the worth of a company simply by comparing the price of the stock. you are talking about market capitalization! Market cap or market capitalization is simply the worth of a company in terms of it¶s shares! To put it in a simple way. ONGC.170. You have! When you are talking about ³mid-cap´.21 Cr´ (when this article was written) Depending on the value of the market cap. the company will either be a ³mid-cap´ or ³large-cap´ or ³small-cap´ company! Now the question is.

but most traders will choose a single style and only take that type of trade. The stock becomes overvalued if the price is much higher than the actual earning. In this case you should remember that news should not matter much but the overall performance of the company matters more. suited to different day trader personalities. depending upon how the trade is doing (whether it is in profit). The styles range from short term trading such as scalping where positions are only held for a few seconds or minutes. KEY STATISTICS YEAR-2009 I. But if this is the case. This gives you a fair idea of a company¶s share price when it is compared to its earnings. to longer term swing and position trading where a position may be held throughout the trading day. Earning/Price Ratio Another important factor affecting stock price is the earning/price ratio. Trading Styles There are several different styles of day trading. On the other hand. So. news is another factor affecting stock price.When you get positive news about a company then it can increase the buying interest in the market. BUSINESS TRANSACTED AT BSE 27 . and can have open positions for anywhere from a few minutes to a few hours. these are the major factors that affect stock price. Some day traders will trade multiple styles. when there is a negative press release. then it has the potential to rise in the near future. it can ruin the prospect of a stock. Most day trading systems have a lot of flexibility. The stock becomes undervalued if the price of the share is much lower than the earnings of a company. So.

No. No. of Shares Traded. Average Daily Turnover. of Companies Listed. Capital raised through FCCB/Euro Issue. Price to Book Value. Dividend Yield %. Capital Listed during the month. FIIs transactions (Equity & Debt) all India. V-SAT Turnover. Deliveries. BSE 100 Index. Newly Listed securities of existing companies. II. Conversion Table 1 Billion = 100 Crore. Market Capitalisation. No. Derivatives. III. of Trading Days. FIIs transactions in BSE. VI. No. IV. DOLLAR EXCHANGE RATE Rupee Dollar Rate. Turnover for the month. 1 28 . INDEX AND RATIOS BSE Sensitive Index. of Scrips Listed. BSE TECK Index. BUSINESS TRANSACTED BY FIIs No. of Registered FIIs. Amount offered/raised through IPO & Rights. P/E Ratio. No.Turnover. LISTING AND CAPITAL RAISED No. No. BSE 200 Index. of Trader Work Station (TWS). 1 Crore = 10 Million. of Script Traded. of Members. V. MEMBERSHIP AND TWS No. BSE 500 Index. Dollex-200. of Cities.

Derivatives and debt. Open. Best Bid / offer with volume iv. Traded Volume v. Scrip code ii. i. Upper Circuit limit and lower circuit limit iii. 1 ) Level 1 Data contains the following information i.million = 10 Lakh. low and last traded price iii. These Data Products are provided at two levels viz. 1Lakh = 100 Thousand. number of trades. Shareholding Pattern. Close and last traded quantity (Only for live feed) 2 ) Level 2 Data contains the following information in addition to the level 1 data. Half-yearly. c) Corporate Data ± Results (Quarterly. High. Annual). Announcements. BSE PRODUCTS Data Products BSE provides 3 basic types of data products a) Market data ± Equity. b) Indices ± 17. Turnover value. trend 29 . Weighted average price ii. Level 1 and Level 2.

545 million.v. The foreign direct investment (FDI) stood at US $ 27. India attracted total foreign investments of US $ 15.426 million.881 million. Total Buy quantity and Total sell quantity CAPITAL INFLOWS During the April-January period of 2008-09. while the portfolio investment stood at US $ -11. Monthly trends in foreign investments ($ million) Total Portfolio investments foreign investment s Foreign Months direct investments 2007-08(P) 2008-09(P) 2007-08(P) 2008-09(P) 2007-08(P) 2008-09(P) April 1643 3749 1974 -880 3617 2869 May 2120 3932 1852 -288 3972 3644 June 1238 2392 3664 -3010 4902 -618 July 705 2247 6713 30 -492 7418 1755 .

August 831 2328 -2875 593 -2044 2921 September 713 2562 7081 -1403 7794 1159 October 2027 1497 9564 -5243 11591 -3746 November 1864 1083 -107 -574 1757 509 December 1558 1362 5294 30 6852 1392 January 1767 2733 6739 -614 8506 2119 February 5670 - -8904 - -3234 - March 4438 - -1600 - 2838 - AprilJanuary - 27426 - -11881 - 15545 Stock Market Trends 31 .

54 5904.60 May-07 14156.49 7468.86 4393.22 4535.0 4 6134.80 32 .14 2513.4 7 6 6 7244.60 6287.80 4066.BSE Sensitiv e Index (Base : Year /Month 1978 79 = 100) S&P BSE 100 (Base : 1983 84 = 100) CNX Nifty * (Base : Novemb er 3.25 2632.39 4295. 1995 = 1000) Average Average High Low Average High Low High Low 1 2 3 4 5 6 7 8 9 10 2005-06 8280.3 14652.17 3310.44 3418.8 20873.47 11509.44 6242.9 6 6287.70 7015.73 7413.80 2007-08 16568.95 1902.3 12455.4 13765.0 3 9 8929.00 3572.4 14544.85 3633.69 4896.37 4184.3 9 3 7 8691.44 4224.50 2006-07 12277.08 11307.

0 2 0 5 8292.36 4464.18 4620.2 2 2 6 7897.64 5756.92 7179.0 17291.75 5748.71 4474.35 4474.30 Jan-08 19325.9 14664.05 Jul-07 15253.3 11154.6 10795.6 20873.5 19976.5 10531.9 10526.00 4074.17 4318.81 7897.2 20375.90 Sep-07 16046.Jun-07 14334.3 14650.62 5905.1 15422.90 5519.30 5742.38 4222.6 17328.3 19977.5 14003.2 18526.30 4113.58 5937.57 6159.95 Nov-07 19259.6 5 3 2 0 7 9868.37 7188.5 11509.60 5456.3 10211.41 7924.4 15794.0 0 1 3 7392.29 7625.9 5 3 4 4 6 8895.35 6287.0 15318.85 4899.50 10391.30 33 .35 Dec-07 19827.39 4301.6 1 7 2 9587.75 Aug-07 14779.1 9 8998.8 19079.34 7605.30 8155.92 5021.90 5068.75 Oct-07 18500.6 13989.1 8 7 4 0 8 5 5963.1 5 0 1 7594.3 16729.2 10422.69 8967.75 4313.29 4659.

60 4476.1 16608.23 7828.8 14809.20 9348.32 6580.2 16063.28 8488.00 4503.56 5483.12 4620.55 July-08 13716.4 15343.02 4901.40 4214.71 7760.74 4463.69 4504.88 5201.01 4769.20 4835.91 5195.1 14942.6 17600.06 4206.1 16275.3 3 2 4 7704.00 Sept-08 13942.00 3850.1 9 6 2 8627.87 6564.49 4417.8 8 8 0 7143.90 4838.59 8785.60 4040.5 5 2 9 8982.8 15049.59 9240.0 4 6 1 9435.75 8101.50 4953.79 4739.6 8 8 0 7909.2 12575.10 Apr-08 16290.9 14048.05 34 .57 8095.30 June-08 14997.70 Aug-08 14722.5 18663.25 Mar-08 15838.9 17378.64 8621.1 13461.Feb-08 17727.1 15503.80 3816.50 4647.35 7860.4 8 8 9 8363.7 1 6 5 7276.00 May-08 16945.58 8907.66 5228.84 5028.62 7029.8 12595.48 7362.60 9969.67 4124.3 16677.

Essentially.92 6776.01 5328. stock market index or anything else are known as ³Derivatives´.80 3077.35 4802.58 10099.09 4332. The legal terms of a contract are much more varied and flexible than the terms of property ownership. interest level. 35 .36 3121. commodities.17 2834.50 2656.84 2854.01 4823.24 4864. it¶s this flexibility that appeals to investors.Oct-08 10549. the underlying asset.45 2678.55 5181.95 4441. currency.9 3 8674.42 10335.20 Nov-08 9453.45 Jan-09 9350.79 3148. In more simpler form.21 3210.50 2895.6 13055.36 5396. derivatives are financial security such as an option or future whose value is derived in part from the value and characteristics of another security.6 5 7 8509.56 5432.87 4343.25 2553.96 10631.9 1 8739. bullion. this means you buy a promise to convey ownership of the asset.55 Derivatives Commodities whose value is derived from the price of some underlying asset like securities.94 4443. In fact.22 3950.1 2 8451.75 2524. It is a generic term for a variety of financial instruments. rather than the asset itself.15 Dec-08 9513.

36 . the owner of a µfutures¶ contract is obligated to buy or sell the asset. Shares or bonds are financial assets where one can claim on another person or corporation. On the other hand. they will be usually be fairly standardized and governed by the property of securities laws in an appropriate country. we shall deal with the former in a little detail. that they are investing in. derivatives ± wittingly or unwittingly. the underlying asset is usually a commodity. the derivatives range is only limited by the imagination of investment banks. Here. Derivatives securities or derivatives products are in real terms contracts rather than solid as it fairly sounds. On the other hand. Beyond this. where the contract details may not be standardized. It is likely that any person who has funds invested. The other examples of derivatives are warrants and convertible bonds (similar to shares in that they are assets). a contract is merely an agreement between two parties. The broadest classification of the Indian Market can be made in terms of the commodity market and the bond market. µFutures¶ and µoptions¶ are two commodity traded types of derivatives. and exposed to. But derivatives are usually contracts. An µoptions¶ contract gives the owner the right to buy or sell an asset at a set price on or before a given date. an insurance policy or a pension fund. He bet that the value derived from the underlying asset will increase or decrease by a certain amount within a certain fixed period of time. stock. bond. India Commodity Market The vast geographical extent of India and her huge population is aptly complemented by the size of her market. or currency.When a person invests in derivative.

the success stories of the commodity market of India in recent years has mainly centered around the growth generated by the Retail Sector. Moreover. With the passage of time the importance of whole sellers began to fade out for the following reasons: y The whole sellers in most situations. The unorganized retail outlets of the yesteryears consist of small shop owners who are price takers where consumers face a highly competitive price structure. The improvement in transport facilities made the retailers directly interact with the producers and hence the need for whole sellers was not felt. The organized sector on the other hand are owned by various business houses like Pantaloons. The traditional wholesale market in India dealt with whole sellers who bought goods from the farmers and manufacturers and then sold them to the retailers after making a profit in the process. In fact. Such markets are social institutions that facilitate exchange of goods for money. Almost every commodity under the sun both agricultural and industrial are now being provided at well distributed retail outlets throughout the country. It was the retailers who finally sold the goods to the consumers. edible and 37 . Reliance. India Commodity Market can be subdivided into the following two categories: y y Wholesale Market Retail Market Let us now take a look at what the present scenario of each of the above markets is like. acted as mere parasites who did not add any value to the product but raised its price which was eventually faced by the consumers. Such markets are usually sell a wide range of articles both agricultural and manufactured. the retail outlets belong to both the organized as well as the unorganized sector. the extent of the retail market (both organized and unorganized) has evolved in leaps and bounds. The cost of goods is estimated in terms of domestic currency . y In recent years.The commodity market in India comprises of all palpable markets that we come across in our daily lives. Tata and others.

perishable and durable. 38 . Money Market When the stock prices show a downward trend . 10.inedible. However the growth of such markets has still centered around the urban areas primarily due to infrastructural limitations. Money Market Definition Money Market Definition is simply meant as the short-term debt market. Demand for commodities is likely to become four times by 2010 than what it presently is. The money market is a type of a dealer market where firms purchase securities in their own account by assuming the risks themselves. Considering the present growth rate. Unlike the stock exchanges the money market securities do not operate in exchanges or through brokers. Transactions take place over phone or the electronic system. Modern marketing strategies and other techniques of sales promotion enable such markets to draw customers from every section of the society. One may browse through the following links to have a more detailed information about money market. many are risk averse and prefer to invest in the more secure money market . The money market securities that are issued by the government or financial institutions or large corporations are very liquid. Treasury Bills and certificate of deposits are regarded as the instruments in the money market. Although the stock market is associated with high risks and high returns . Since the money market is extremely safe. it yields very low returns unlike the bond market. The money market deals with very short term debt securities that mature in less than a year. then it becomes risky to keep savings there. the total valuation of the Indian Retail Market is estimated to cross Rs. Since the money market securities trade at very high denominations it becomes very difficult for the individual investors to have access to it.000 billion by the year 2010.

federal funds rate. use. which means ensuring timely and reliable access to and use of information. or destruction in order to provide y integrity. Money Market Index Money Market Index is a true indicator of the prevailing money market. Money Market Rates Money Market Rates can be simply defined as the market rates including the broker call loan rate. Objectives) and challenges (non-homogeneity. and y availability. modification. Find detailed on the world money market. trading and the distribution of short-term debt instruments across different regions over the world. Market Segments Overview The United States Government formally defines Information Security as: "Protecting information and information systems from unauthorized access. which renders a clear-cut idea on making investment. disruption. which means guarding against improper information modification or destruction." While the business drivers (Risks. Get the method of finding the money market rates. which means preserving authorized restrictions on access and disclosure. rates on bankers' acceptance etc. disclosure. organizational size) may differ considerably across different market sectors. including means for protecting personal privacy and proprietary information. Pivot Point Security has worked extensively across market segments and with many of the worlds largest: y Financial Institutions 39 . the basic requirements of Information Security remain the same. and includes ensuring information non-repudiation and authenticity. y confidentiality.World Money Market World Money Market has been providing origination.

including names. it leads to a more rational allocation of resources because funds. The next time you note a Security firm name-dropping in an attempt to gain your trust / business. As Security Practitioners we understand the value of seemingly insignificant pieces of information as a basis for malicious action. are mobilized and 40 . Please do not look for client names or precise detail as to the work that we do. or kept in idle deposits with banks.y y y y y y State and City Governments Pharmaceutical Companies Tele Communications Companies Advertising / Media Organizations Health Care Organizations Non-Profit Organizations We have broken out a small handful of these market segments into specific sections on our website to make it easier for someone reviewing our site to determine our understanding of those market sectors that have some level of uniqueness relating to specific drivers and challenges. ask yourself whose best interest they are really looking out for. which could have been consumed. The role of stock exchanges Stock exchanges have multiple roles in the economy. this may include the following:[1] Raising capital for businesses The Stock Exchange provide companies with the facility to raise capital for expansion through selling shares to the investing public.[2] Mobilizing savings for investment When people draw their savings and invest in shares. and accordingly have a strict policy of non-disclosure of any client data.

and the subprime mortgage crisis in 2007-08.redirected to promote business activity with benefits for several economic sectors such as agriculture.Tel (2001). Facilitating company growth Companies view acquisitions as an opportunity to expand product lines. One. Consequently. Parmalat (2003). MCI WorldCom (2002). The dot-com bubble in the early 2000s. both casual and professional stock investors. Redistribution of wealth Stock exchanges do not exist to redistribute wealth. some well-documented cases are known where it is alleged that there has been considerable slippage in corporate governance on the part of some public companies. it is alleged that public companies (companies that are owned by shareholders who are members of the general public and trade shares on public exchanges) tend to have better management records than privately-held companies (those companies where shares are not publicly traded. hedge against volatility. often owned by the company founders and/or their families and heirs. will share in the wealth of profitable businesses. Sunbeam (2001). or otherwise by a small group of investors). A takeover bid or a merger agreement through the stock market is one of the simplest and most common ways for a company to grow by acquisition or fusion. 41 . resulting in stronger economic growth and higher productivity levels and firms. Lehman Brothers (2008). through dividends and stock price increases that may result in capital gains. and Satyam Computer Services (2009) were among the most widely scrutinized by the media. Corporate governance By having a wide and varied scope of owners. Adelphia (2002). However. increase its market share. Companies like Pets. increase distribution channels. commerce and industry. Enron Corporation (2001). Webvan (2001). are classical examples of corporate mismanagement.com (2000). American International Group (2008). companies generally tend to improve on their management standards and efficiency in order to satisfy the demands of these shareholders and the more stringent rules for public corporations imposed by public stock exchanges and the government. However. or acquire other necessary business assets.

Therefore the Stock Exchange provides the opportunity for small investors to own shares of the same companies as large investors. investing in shares is open to both the large and small stock investors because a person buys the number of shares they can afford. or financial crisis could eventually lead to a stock market crash. Barometer of the economy At the stock exchange. depression. These bonds can be raised through the Stock Exchange whereby members of the public buy them. thus loaning money to the government.Creating investment opportunities for small investors As opposed to other businesses that require huge capital outlay. Government capital-raising for development projects Governments at various levels may decide to borrow money in order to finance infrastructure projects such as sewage and water treatment works or housing estates by selling another category of securities known as bonds. largely. The issuance of such bonds can obviate the need to directly tax the citizens in order to finance development. Major stock exchanges Twenty Major Stock Exchanges In The World: Market Capitalization & Year-to-date Turnover at the end of January 2009 42 . An economic recession. the result is that the government must tax the citizens or otherwise raise additional funds to make any regular coupon payments and refund the principal when the bonds mature. Share prices tend to rise or remain stable when companies and the economy in general show signs of stability and growth. on market forces. Therefore the movement of share prices and in general of the stock indexes can be an indicator of the general trend in the economy. share prices rise and fall depending. although by securing such bonds with the full faith and credit of the government instead of with collateral.

3 264.3 241.7 37.4 456.094.3 389.6 1.7 871.1 142.400.452.3 2.157.602.997.173.187.325.Market Value Region Stock Exchange (millions USD) Africa Americas Americas Americas Americas Johannesburg Securities Exchange NASDAQ São Paulo Stock Exchange Toronto Stock Exchange New York Stock Exchange 432.1 2.517.862.0 48.248.323.4 9.074.425.8 Asia-Pacific Australian Securities Exchange Asia-Pacific Bombay Stock Exchange Asia-Pacific Hong Kong Stock Exchange Asia-Pacific Korea Exchange Asia-Pacific National Stock Exchange of India Asia-Pacific Shanghai Stock Exchange Asia-Pacific Shenzhen Stock Exchange Asia-Pacific Tokyo Stock Exchange Europe Europe Europe Europe Europe Euronext Frankfurt Stock Exchange (Deutsche Börse) London Stock Exchange Madrid Stock Exchange (Bolsas y Mercados Españoles) Milan Stock Exchange (Borsa Italiana) 43 .9 937.748.566.758.422.0 39.0 997.3 572.237.5 84.061.970.3 30.922.5 301.994.696.7 2.7 613.999.057.8 1.1 14.8 81.238.3 1.161.695.5 146.755.206.5 470.6 611.616.615.9 1.144.999.363.417.151.781.365.0 587.557.0 1.930.203.759.1 114.0 80.7 Total Share Turnover (millions USD) 17.2 75.

725. For many given patterns there is a high probability that they will produce the expected results. Some major technical analysis tools are described below: 44 .Europe Europe Nordic Stock Exchange Group OMX1 Swiss Exchange 503. 3. the pure technical analyst is only concerned with price movements. for example. political factors and market sentiment.8 761. and creates charts from that data to use as the primary tool. supply and demand. Market action discounts everything! This means that the actual price is a reflection of everything that is known to the market that could affect it. there are recognized patterns that repeat themselves on a consistent basis.6 Analysis Technical analysis is a method of predicting price movements and future market trends by studying charts of past market action. History repeats itself Sensex patterns have been recognized and categorized for over 100 years and the manner in which many patterns are repeated leads to the conclusion that human psychology changes little over time.1 55.9 63. not with the reasons for any changes. However.896. Also. One major advantage of technical analysis is that experienced analysts can follow many markets and market instruments simultaneously. 2.435.299. Technical analysis is concerned with what has actually happened in the market. Prices move in trends Technical analysis is used to identify patterns of market behavior that have long been recognized as significant. rather than what should happen and takes into account the price of instruments and the volume of trading. Technical analysis is built on three essential principles: 1.

13.D. then the instrument is assumed to be overbought (a situation in which prices have risen more than market expectations). period closing prices tend to concentrate in the higher part of the period's range. Moving Average Convergence Divergence (MACD): This indicator involves plotting two momentum lines. An RSI of 30 or less is taken as a signal that the instrument may be oversold (a situation in which prices have fallen more than the market expectations). If the RSI is 70 or greater. Number theory: Fibonacci numbers: The Fibonacci number sequence (1. If the MACD and trigger lines cross. The inverse of 62%. as prices fall in a strong down trend. The MACD line is the difference between two exponential moving averages and the signal or trigger line.. The indicator is based on the observation that in a strong up trend. Gann numbers: W. which is a popular Fibonacci retracement number. which is an exponential moving average of the difference. known as time/price 45 . Stochastic calculations produce two lines. then this is taken as a signal that a change in the trend is likely.Relative Strength Index (RSI): The RSI measures the ratio of up-moves to down-moves and normalizes the calculation so that the index is expressed in a range of 0-100.2. closing prices tend to be near to the extreme low of the period range. Gann was a stock and a commodity trader working in the '50s who reputedly made over million in the markets. which is 38%. Stochastic oscillator: This is used to indicate overbought/oversold conditions on a scale of 0-100%. %K and %D that are used to indicate overbought/oversold areas of a chart.1.3.34.. is also used as a Fibonacci retracement number.21. Divergence between the stochastic lines and the price action of the underlying instrument gives a powerful trading signal. He made his fortune using methods that he developed for trading instruments based on relationships between price movement and time.8. Conversely.5.) is constructed by adding the first two numbers to arrive at the third. The ratio of any number to the next larger number is 62%.

A runaway gap is a price gap that usually occurs around the mid-point of an important market trend. Moving averages are used to smooth price information in order to confirm trends and support and resistance levels. while a down gap is a sign of market weakness. falling peaks and troughs constitute a downtrend that determines the steepness of the current trend. They are also useful in deciding on a trading strategy. Rising peaks and troughs constitute an uptrend. The breaking of a trend line usually signals a trend reversal. An exhaustion gap is a price gap that occurs at the end of an important trend and signals that the trend is ending. There is no easy explanation for Gann's methods. A down gap is formed when the highest price of the day is lower than the lowest price of the prior day. It usually signals the beginning of an important price move. Gaps Gaps are spaces left on the bar chart where no trading has taken place. For that reason. but in essence he used angles in charts to determine support and resistance areas and predict the times of future trend changes. An up gap is formed when the lowest price on a trading day is higher than the highest high of the previous day. A breakaway gap is a price gap that forms on the completion of an important price pattern. The most common technical tools: 46 . Waves Elliott wave theory: The Elliott wave theory is an approach to market analysis that is based on repetitive wave patterns and the Fibonacci number sequence.equivalents. An ideal Elliott wave patterns shows a five-wave advance followed by a three-wave decline. He also used lines in charts to predict support and resistance areas. it is also called a measuring gap. Horizontal peaks and troughs characterize a trading range. An up gap is usually a sign of market strength. Trends A trend refers to the direction of prices. particularly in futures trading or a market with a strong up or down trend.

political. These criteria often include the economic condition of the country that the currency represents. many market players use technical analysis in conjunction with fundamental analysis to determine their trading strategy. In practice. and other "fundamental" elements. but concentrates on the activity of that instrument's market. weather and government policy. Factors involved in price analysis: Supply and demand. Unlike the fundamental analyst. DMI (Directional Movement Indicator) is a popular technical indicator used to determine whether or not a currency pair is trending. Fundamental analysis focuses on what ought to happen in a market. 47 . Government stability is big positive reason for sensex. Many profitable trades are made moments prior to or shortly after major economic announcements. Fundamental analysis is a macro or strategic assessment of where a currency should be trading based on any criteria but the movement of the currency's price itself. Positive Stock market news: 1.Coppock Curve is an investment tool used in technical analysis for predicting bear market lows. environmental and other relevant factors and statistics that will affect the basic supply and demand of whatever underlies the financial instrument. the technical analyst is not much concerned with any of the "bigger picture" factors affecting the market. seasonal cycles. monetary policy. Fundamental analysis Fundamental analysis is a method of forecasting the future price movements of a financial instrument based on economic.

NPAs will not only propel the negative sentiment but increase the banks reluctance to give loans which will once again destroy the positive aspects of the bailout packages. Promoter will not reduce his holding. We may hear some shocking news on this front in the next 2 years. 2008: World economy will grow by 2.2% in 2009. As stock markets are unlikely to recover in the next 12-15 months. it is interesting to see how promoters will clear their dues. B.9% in 2009. World Bank estimates: A. 2. Global Telecom Companies are planning to buy 20-25% stake in Reliance Communications. NPA shocks: Many people are underestimating the impact of Non Performing Assets (NPAs). 3. NPAs of ICICI Bank in 2008: Rs 9. IT and Hospitality sectors are the worst affected while Telecom is the most optimistic one. 2008: World economy will grow by 0. December.2. November. ADB estimates about Asian economy in 2009: 48 . Manpower survey: India is the second most optimistic employment market in the world but there will freezing in hiring in the next 3 months. This deal is beneficial for investors as only 12% of shares are available for trading after this purchase in the secondary market. NPAs will affect in 2 ways. FCCB shocks: Foreign currency convertible bonds (FCCBs?) of many companies will be due for repayment in the next 3 years. Anil Ambani family holds 67% stake in the company. R-Com stock lost 70% of value in 2008. NPA statistics: NPAs of ICICI Bank in 2007: Rs 5..500 crore. Only positive aspect is many PSU banks reported fall in NPAs in 2008 over 2007 except SBI and IOB.930 crore. Interesting statistics about Asian and World economies: 1.

Recession A recession is a decline in a country's gross domestic product (GDP) growth for two or more consecutive quarters of a year.5% in 2008. B.2% in 2009. 2008: Asian economy will grow by 7. 2008: Asian economy will grow by 5. December. 2008: Asian economy will grow by 7. Investors spend less as they fear stocks values will fall and thus stock markets fall on negative 49 . An economy typically expands for 6-10 years and tends to go into a recession for about six months to 2 years. lay-offs and a sharp rise in unemployment. ADB estimates about Asian economy in 2008: A. Causes of recession An economy which grows over a period of time tends to slow down the growth as a part of the normal economic cycle. 3. September. This leads to a decreased demand for goods and services.8% in 2009.5 This is a much severe crisis than 2001 slowdown.A. December. September. A recession normally takes place when consumers lose confidence in the growth of the economy and spend less. 4. 2008: Asian economy will grow by 6. which in turn leads to a decrease in production. P/E of Sensex in 2008 economic slowdown: 9. Current P/E of Sensex: 10.9% in 2008. B. A recession is also preceded by several quarters of slowing down.

When the global economy has been cooling down. it was inevitable that stock markets around the world would start catching the chill. has also punctured a hole in the decoupling argument (which said Asia would not be hit by an America-based problem) that had become fashionable in recent weeks. among all Asian markets.sentiment. and the financial sector in particular has been heading from one cold shower to the next. Investors will also have noticed that the third-quarter corporate numbers show significant deceleration in both sales and profit growth. However. This may have been because the correction in the overheated Chinese stock market began some weeks ago. a recession is yet to be declared by the Bureau of Economic Analysis. hitting a 10-month low. Indian markets worst hit It is interesting that Indian markets were hit the most. And investors seem to have little faith in the Bush rescue plan's ability to ward off a recession in the US. but the market has already discounted for that. The Indian stock markets also crashed due to a slowdown in the US economy. but investors are a worried lot. stock prices are now at a low ebb in India with little cheer coming to investors. when compared to the same quarter a year earlier. The Fed will almost certainly respond with sharp cuts in interest rates towards the end of the month. The markets bounced back after the US Fed cut interest rates. In the US. The way in which Asian stock prices responded last week to the fall of the Dow Jones and Nasdaq indices by 4 per cent. The stock markets reflect the buoyancy of the economy. When coupled with the data showing that the export target for the year will be missed by a wide 50 . Investors around the world have taken note of the fact that the broad-based S&P 500 index is at a 16-month low. along with European stocks. The Sensex crashed by nearly 13 per cent in just two trading sessions in January. Stock markets & recession The economy and the stock market are closely related.

the Sensex trades at a trailing P/E multiple of 24. Indian companies have major outsourcing deals from the US. the Sensex trades at an FY09 estimated P/E of 18. There is no doubt that valuations had become expensive.which would mean wiping out the gains of the past three months.150 billion)).5 per cent decline in the Sensex. and FIIs have been net sellers to the tune of Rs 2. The India economy is likely to lose between 1 to 2 percentage points in GDP growth in the next fiscal year. The floor therefore would probably be a Sensex level of 17. Even after the 10 per cent correction from the market's peak. On a forward basis.margin. Also relevant was the Reliance Power IPO. or whether a further fall is required before value-based buying starts.15. Indian companies with big tickets deals in the US would see their profit margins shrinking.200 crore (Rs 22 billion) in January. Yet. buying may soon begin A global liquidity surplus had certainly contributed to momentum buying. and that the industrial sector has suffered a sharp slowdown. which pulled in a record amount of application money (Rs 1. fresh buyingcannot be very far away. The question is whether the correction that has occurred so far is enough for fresh buying to emerge. Foreign institutional investors had moved to the sidelines in the secondary markets even earlier. India's exports to the US have also grown substantially over the years. no more.000 crore (Rs 1.000-odd -. which is not cheap in anyone's book. 51 . it was inevitable that stock prices would have to come off their dizzy highs. Even if a third or a fourth of that was being garnered by sale of stocks. Provided the general economic and corporate news does not get worse than has already been anticipated.5. it is a large enough sum for the market to go into correction mode. Impact of a US recession on India A slowdown in the US economy is bad news for India. What began with profit-booking and unwinding of long positions cascaded on Friday into a 3.

say experts. There is a big correlation among global markets. has increased event-related volatility. The presence of hedge funds across asset classes. the DJIA was down 30 per cent in December 2002 from the highs it hit in January 2000.7 per cent. One. Analysts are now expecting a cut in US interest rates. A recession could bring down oil prices to $70. factors. there is a change in the global investment climate. If the fall from the record highs reached is taken. Hedge funds and FIIs could have been the biggest sellers in the Indian markets. said Mihir Vora of HSBC Mutual Fund. booking profits and making the most of the unprecedented bull run that has dominated the Indian stock market for a long time now. other emerging markets were down nearly 52 . Asia is yet to totally decouple itself (or be independent) from the rest of the world. Between January 2001 and December 2002. On the global front. Black Monday saw bloodbath on Dalal Street as the Indian stock markets crashed by over 1430 points in afternoon trade (the market has since then recovered somewhat). the Dow Jones Industrial Average went down by 22.6 per cent. on NDTV Profit. reminding investors that there is no one-way bet on the stock market. the Sensex was down 45 per cent. Oil may get cheaper brining down inflation. A weak dollar could bring more foreign money to Indian markets. The whole of Asia would be hit by a recession as it depends on the US economy.The worries for exporters will grow as rupee strengthens further against the dollar. In contrast. One of the primary triggers is the huge fear of the United States' economy going into a recession with foreign institutional investors trying to reallocate their funds from risky emerging markets to stable developed markets. along with increased global movement of capital. A combination of global and local factors is affecting this market. while the Sensex fell by 14. The current volatility is also linked to global bourses. But experts note that the long-term prospects for India are stable. Volatility in commodities markets has also significantly affected equity markets.

on NDTV Profit.  Can¶t predict future  Based on rumors Opportunity: 53 . On the local front there has been a huge build-up in derivatives positions and volatility led to margin calls. SWOT analysis: Strength:  High return  Large investment  Acquire capital for expanding the business  Secure the future losses Weakness:  High risk  Based on the fluctuation. At current levels it would be a buy call and we would not advise investors to wait to catch the bottom. he added. The Sensex can fall another 10-15%. Analysts expect the markets to continue to be choppy for a while till global liquidity and commodity prices settle in. With the markets falling.20% so India is playing catch-up. Also many IPOs have sucked out liquidity from the primary market into the secondary market. It becomes high loss when market goes down. said Adrian Mowat of JP Morgan. he said. said Vora. a technical correction in the derivatives segment has perpetrated a larger fall.

Threat :  Recession  New government  Bubble burst  Fluctuates dollar prices Matrix STRENGTH Weakness:   High risk Based on the fluctuation.   Can t predict future Based on rumors    High return Large investment Acquire capital for expanding the business  Secure the future losses  Opportunity  Lot of people wants to invest but 54 Threat . Lot of people wants to invest but don¶t invest due to insufficient knowledge. It becomes high loss when market goes down.  Market is providing new opportunities and new options to invest.

55 .  It is based on´high risk and high return.  Stock market is very sensitive market.don t invest due to insufficient knowledge. may survive in the market and generates profits or good return whether the market is down  Investors should not invest on the basis of rumors they must observe the market condition or trends Indian economy and than invest If they wanna generate good return.  Stock market is all about future prediction. Conclusion: Through this research we can conclude that:  Stock market fluctuates by the external environment.´  Comparatively stock market is less risky than the other market and generates more money for the economy  One who have good knowledge in stock market.  Market is providing new     Recession New government Bubble burst Fluctuates dollar prices opportunities and new options to invest.

you can sometimes get on allocation of newly ± issued shares but the issue will be confined to institutional invertors . It should not be on the basis of short term purpose.  Investor should not invest on the basis of report. Investor should invest in A group company.  As a private investor.  When the market is all time high .group company . and does not diluteyour ownership. if it is not do not invest in stock market.  Stock market are run by the big investor like FII¶S . MUTUAL FUNDS.  Investor should not invest in small cap company. make sure that it is going on the basis of fundamental .  When you are going to invest in stock market get a full information about in which you want to invest .  Stock market always affect by overseas market. That how the company is performing.  A scrip issue is designed to improve marketability of ordinary shares .  When the market is rising very fastly .  Investor should invest on the basis of result of company. do not invest in stock market. D. the company 56 .  Investor should not invest in C. DII¶S . Investors should invest for a long term purpose.

6.7 & 8 y Investment Analysis and portfolio management-M Raghunathan. 23.200.28. W. R.Hafer.Hafer work package no.Bibliography Text books y The Stock Market-The Stock Market . Hein.26. 34-39 y Barometer-January 2008 By Alvino-Mario Fantini and y JARN.209 Journals and magazines y Capital market 23rd feb to 08 march page no.Rik W. 11 may 2009 page no. Scott E. Published Feb 2009 y Business today y Business standard Hugo Restall 57 . 16-19 y Business world. Madhumati page no.24.

htm http://www.wickypedia.cu/tecun/software/Soporte%20Tecnico%20de%20Redes/Cisco/Routers/7 200-7500-7600/nse1_ds.openarticlesubmission.nseindia.com http://www.net/dblacksmith/financial-mkt http://moneymantrastock.gov.com/article.html http://www.html www.answers.com http://www.com http://www.com www.com http://business.php?id=national-stock-exchange www.in/business_financing/capital_market.htm http://www.swing-trade-stocks.nseindia.com.answers.com/beginners-guide/25200-broker-subbroker.indiamart.com/investor_relations.dynemic.pdf http://www.bseindia.cimex.com/markets/nse/ www.php/tag/what-is-the-difference-betweenthe-primary-market-and-the-secondary-market/ http://finance.com/78851-format-details-required-indian-pay-slip.traderji.htm http://tecun.allbusiness.com/content/equities/eq_listing.com/content/nsccl/nsccl_introduction.php# 58 .com/north-america/united-states-illinois-metro-areas-chicago/10672271.citehr.slideshare.html SOME OTHER WEB SITES www.com/basicofstockmarket/index.Websites: http://www.

What is your occupation? a) Business c) Govt.gov.www. service e) Student b) Private Service d) Housewife f) Other________________ Q2. What is your annual income (Rs.)? 59 .com QUESTIONNAIRE NAME: ADDRESS: CONTACT NO: E-MAIL: Q1.jsp?contentDisp=Department&dep_id www. http://www.in/Index.com http://www.shriraminsight.com/marketinfo/companyinfo/online/boardmeetlist.nseindia.angeltrade.sebi.

Where do you invest? a) Bank c) Share market e) Other_____________ b) Mutual fund d) Post office Q5. Do you invest in share market? a) Yes b) No 60 . What factors affect your investment? a) Return on Investment c) Liquidity b) Risk d) Safety Q6. What is your annual saving (in Rs)? a) Less than 50000 b) 50000 ± 100000 c) More than 100000 Q4.a) Less than 200000 b) 200000 ± 300000 c) 300000 ± 500000 d) More than 500000 Q3.

(If yes then go to 07 otherwise go to 08) Q7. Which mediums do you prefer to invest your saving? a) Individual Advisor b) Bank Advisor c) Broker or Agency d) Other_____________ Q10. Are you satisfied with your medium of investment? a) Yes b) No _______________________________________________________ 61 . Through which tool do you invest? a) Share c) Derivatives b) IPO d) other_____________ Q8. Are you ready to invest in share market if you get higher return? a) Yes b) No Q9.

62 .Thank you.

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