A

RESEARCH PROJECT REPORT ON

A study on different financial instruments traded on BSE and
NSE

Submitted to
APOLLO INSTITUTE OF TECHNOLOGY
(AFFILIATED TO Dr. A. P. J. ABDUL KALAM TECHNICAL
UNIVERSITY, LUCKNOW)

In partial fulfillment of the requirement

For the degree of awarded

MASTER OF BUSINESS ADMINISTRATION

2014-2016
Submitted To Submitted By

MISS VAISHNAVI BAJPAI SHITAL

MBA, DEPARTMENT MBA 2ND YEAR

 DECLARATION

I SHITAL student of MBA at Apollo Institute of Technology,

Kanpur of hereby declare that the Project work entitled “A study on
different financial instruments traded on BSE AND NSE ” Is compiled and
submitted to under the guidance of MissVaishnaviBajpai. This is my
original work.

SHITAL
ROLL NO:-1535370047
MBA 2nd year

1
 CERTIFICATE

This is to certify that the Research Report entitled “A study on different

financial instruments traded on BSE AND NSE”, submitted by SHITAL in
partial fulfillment of the requirement for the award of degree MBA to
APOLLO INSTITUTE OF TECHNOLOGY, AKTU. Is record of the
candidate’s own work carried out by her under my supervision .The matter
embodied in this dissertation is original and has not been submitted for the
award of any other degree .

Signature:-HOD/DEAN /DIRECTOR

SIGNATURE:-

2
 ACKNOWLEDGEMENT
I would like to acknowledge the able guidance of our esteemed
HEAD OF DEPARTMENT OF MBA. Mr. SANDEEP SAXENA. This is an
outcome of the unparalleled support that I have received from my
research report guide MISS VAISHNAVI BAJPAI. I found this
opportunity to show my gratitude to without the infrastructural
support of the institute.... This study bears testimony to the active
encouragement and guidance of a host of friends and well –
wishers.........

SHEETAL

ROLL NO-1535370047

3
 PREFACE

In finance, a trade is an exchange of a security (stocks, bonds, commodities,

currencies, derivatives or any valuable financial instrument) for "cash", typically a short-

dated promise to pay in the currency of the country where the 'exchange' is located. Trading

implies attempting to profit from short-term fluctuations in a security's price as opposed to

buying it for use or for income via methods such as dividends or interest. Trading is similar to

speculation and investing, but differs in that the position in the security is intended to be held

for a very short time, generally less than a week; however 'trades' are used to implement any

investing strategy.A Share market/stock markets is an open market for fiscal operations such

as trading of a firm's share and derivatives at a fixed cost. These securities are further listed

on a stock exchange. A Share market does not offer any corporeal service and is not a

separately owned business entity. 

It was in 1875 that the Indian Share Market first started functioning. The first share

trading association in India was known as the Native Share and Stock Broker's Association,

only to become the Bombay Stock Exchange (BSE) later on. This trading association started

off its operations with around 318 members.

4
 TABLE OF CONTENTS

1. CHAPTER 1

INTRODUCTION

2. CHAPTER 2

RESEARCH METHODOLOGY

3. CHAPTER 3

DATA ANALYSIS& INTERPRETATION

4. CHAPTER 4

FINDINGS

5. CHAPTER 5

CONCLUSIONS

6. CHAPTER 6

SUGGESTIONS

7. CHAPTER 7

SUMMARY

BIBLIOGRAPHY

QUESTIONNAIRE

5
CHAPTER - I

6
1.1 INTRODUCTION ABOUT THE SECTOR

STOCK EXCHANGE

A Share market/stock markets is an open market for fiscal operations such as trading

of a firm's share and derivatives at a fixed cost. These securities are further listed on a stock

exchange. A Share market does not offer any corporeal service and is not a separately owned

business entity. 

It was in 1875 that the Indian Share Market first started functioning. The first share

trading association in India was known as the Native Share and Stock Broker's Association,

only to become the Bombay Stock Exchange (BSE) later on. This trading association started

off its operations with around 318 members.

SEBI

In 1988 the Securities and Exchange Board of India (SEBI) was established by the

Government of India through an executive resolution, and was subsequently upgraded as a

fully autonomous body (a statutory Board) in the year 1992 with the passing of the Securities

and Exchange Board of India Act (SEBI Act) on 30th January 1992. In place of Government

Control, a statutory and autonomous regulatory board with defined responsibilities, to cover

both development & regulation of the market, and independent powers has been set up.

Paradoxically this is a positive outcome of the Securities Scam of 1990-91.

7
1.2 INDUSTRY PROFILE
(FINANCE)
Main components of Indian Share Market
BOMBAY STOCK EXCHANGE (BSE)

8
 The Bombay Stock
Exchange (BSE)

(Marathi: मुंबईशेअरबाजार 
Bombay ShareBazaar)
(formerly, The Stock
Exchange, Bombay) is
a stock exchange located
on Street, Mumbai and is
the oldest stock exchange
in Asia. The equity market
capitalization of the
companies listed on the
BSE
was US$1.63 trillion as of
December 2010, making it
the 4th largest stock
exchange in Asia and
the 8th largest in the
world. The BSE has the
largest number of listed
Bombay Stock Exchange companies in the world.
Location of Bombay Stock Exchange in India
As of June 2011,
Type Stock Exchange
there are over 5,085 listed
Location Mumbai, India
Coordinates Indian companies and over
18.929681°N 72.833589°E
Founded 1875 8,196 scrips on the stock
exchange, the Bombay
Owner Bombay Stock Exchange Limited Stock Exchange has a
Key people MadhuKannan (CEO & MD)
significant trading volume.
Currency Indian rupee ( )
The BSE SENSEX, also
No. of listings 5,085
called "BSE 30", is a
MarketCap US$1.8 trillion (Dec 2010)
Volume US$231 billion (Nov 2010) widely used market index

Indexes BSE SENSEX in India and Asia. Though

BSE Small Cap
9
BSE Mid-Cap
BSE 500
Website www.bseindia.com
many other exchanges exist, BSE and the National Stock Exchange of India account for the
majority of the equity trading in India. While both have similar total market capitalization
(about USD 1.6 trillion), share volume in NSE is typically two times that of BSE.

 Bombay Stock Exchange is known to be the oldest stock exchange in the entire Asian
region. If someone wants to know about the history of the India share market, it becomes
synonymous with the history of the Bombay Stock Exchange. It started functioning in 1875
with the name 'The Native Share and Stock Broker's Association'. Under the Securities
Contracts (Regulation) Act, 1956, the association got its recognition as a stock exchange in
1956. When it started, it was just an association of persons but with the recognition it got
transferred to a corporate and demutualized entity.

 Trading items in Bombay Stock Exchange -

 Equity or Shares

 Derivatives (Futures and Options)

 Debt Instruments

The main index of BSE is known as the BSE SENSEX or simply SENSEX

(Sensitivity Index). It is an index which comprises of 30 financially sound company scrips,

with an option to be reviewed and modified from time-to-time. The index calculation is based

on the 'Free-float Market Capitalization' methodology. Leading bourses like the Dow-Jones

also follow this methodology. Currently the Sensex is hovering around the 17,000 mark, all

expected to touch 20K by 2010. But then volatility has its important role to spoil the entire

game. 

Hours of operation

Session Timing
Beginning of the Day
8:00 - 9:00
Session
pre-open trading session 9:00 - 9:15
Trading Session 9:15 - 15:30
Position Transfer Session 15:30 - 15:50

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 Closing Session 15:50 - 16:05
Option Exercise Session 16:05 - 16:35
Margin Session 16:35 - 16:50
Query Session 16:50 - 17:35
End of Day Session 17:30

The hours of operation for the BSE quoted above are stated in terms the local time
(i.e. GMT +5:30) in Mumbai , India. BSE's normal trading sessions are on all days of the
week except Saturday, Sundays and holidays declared by the Exchange in advance.

History

The PhirozeJeejeebhoy Towers house the Bombay Stock Exchange since 1980.

The Bombay Stock Exchange is the oldest exchange in Asia. It traces its history to the
1850s, when four Gujarati and one Parsi stockbroker would gather under banyan trees in
front of Mumbai's Town Hall. The location of these meetings changed many times, as the
number of brokers constantly increased. The group eventually moved to Dalal Street in 1874
and in 1875 became an official organization known as 'The Native Share & Stock Brokers
Association'. In 1956, the BSE became the first stock exchange to be recognized by theIndian
Government under the Securities Contracts Regulation Act. The Bombay Stock Exchange
developed the BSE SENSEX in 1986, giving the BSE a means to measure overall
performance of the exchange. In 2000 the BSE used this index to open its derivatives market,
trading SENSEX futures contracts. The development of SENSEX options along with equity
derivatives followed in 2001 and 2002, expanding the BSE's trading platform. Historically an
open outcry floor trading exchange, the Bombay Stock Exchange switched to an electronic

11
trading system in 1995. It took the exchange only fifty days to make this transition. This
automated, screen-based trading platform called BSE On-line trading (BOLT) currently has a
capacity of 8 million orders per day. The BSE has also introduced the world's first centralized
exchange-based internet trading system, BSEWEBx.co.in to enable investors anywhere in the
world to trade on the BSE platform. The BSE is currently housed in PhirozeJeejeebhoy
Towers at Dalal Street, Fort area.

Timeline

Following is the timeline on the rise of the SENSEX through Indian stock market
history.

1830's Business on corporate stocks and shares in Bank and Cotton presses started in
Mumbai.

1860-1865Cotton price bubble as a result of the American Civil War.

1870 - 90's Sharp increase in share prices of jute industries followed by a boom in tea stocks
and coal

1978-79 Base year of SENSEX, defined to be 100.

1986 SENSEX first compiled using a market Capitalization-Weighted methodology for 30

component stocks representing well-established companies across key sectors.

30 October 2006 The SENSEX on October 30, 2006 crossed the magical figure of 13,000
and closed at 13,024.26 points, up 117.45 points or 0.9%. It took 135 days for the SENSEX
to move from 12,000 to 13,000 and 123 days to move from 12,500 to 13,000.

5 December 2006 The SENSEX on December 5, 2006 crossed the 14,000-mark to touch

14,028 points. It took 36 days for the SENSEX to move from 13,000 to the 14,000 mark.

6 July 2007 The SENSEX on July 6, 2007 crossed the magical figure of 15,000 to touch
15,005 points in afternoon trade. It took seven months for the SENSEX to move from 14,000
to 15,000 points.

12
19 September 2007 The SENSEX scaled yet another milestone during early morning trade
on September 19, 2007. Within minutes after trading began, the SENSEX crossed 16,000,
rising by 450 points from the previous close. The 30-share Bombay Stock Exchange's
sensitive index took 53 days to reach 16,000 from 15,000. Nifty also touched a new high at
4659, up 113 points.

The SENSEX finally ended with a gain of 654 points at 16,323. The NSE Nifty
gained 186 points to close at 4,732.

26 September 2007 The SENSEX scaled yet another height during early morning trade on
September 26, 2007. Within minutes after trading began, the SENSEX crossed the 17,000-
mark. Some profit taking towards the end saw the index slip into red to 16,887 - down 187
points from the day's high. The SENSEX ended with a gain of 22 points at 16,921.

9 October 2007 The BSE SENSEX crossed the 18,000-mark on October 9, 2007. It took just
8 days to cross 18,000 points from the 17,000 mark. The index zoomed to a new all-time
intra-day high of 18,327. It finally gained 789 points to close at an all-time high of 18,280.
The market set several new records including the biggest single day gain of 789 points at
close, as well as the largest intra-day gains of 993 points in absolute term backed by frenzied
buying after the news of the UPA and Left meeting on October 22 put an end to the worries
of an impending election.

15 October 2007 The SENSEX crossed the 19,000-mark backed by revival of funds-based

buying in blue chip stocks in metal, capital goods and refinery sectors. The index gained the
last 1,000 points in just four trading days. The index touched a fresh all-time intra-day high of
19,096, and finally ended with a smart gain of 640 points at 19,059.The Nifty gained 242
points to close at 5,670.

29 October 2007 The SENSEX crossed the 20,000 mark on the back of aggressive buying by
funds ahead of the US Federal Reserve meeting. The index took only 10 trading days to gain
1,000 points after the index crossed the 19,000-mark on October 15. The major drivers of
today's rally were index heavyweights Larsen and Toubro, Reliance Industries, ICICI Bank,
HDFC Bank and SBI among others. The 30-share index spurted in the last five minutes of

13
trade to fly-past the crucial level and scaled a new intra-day peak at 20,024.87 points before
ending at its fresh closing high of 19,977.67, a gain of 734.50 points. The NSE Nifty rose to a
record high 5,922.50 points before ending at 5,905.90, showing a hefty gain of 203.60 points.

8 January 2008 The SENSEX peaks. It crossed the 21,000 mark in intra-day trading after 49
trading sessions. This was backed by high market confidence of increased FII investment and
strong corporate results for the third quarter. However, it later fell back due to profit booking.

13 June 2008 The SENSEX closed below 15,200 mark, Indian market suffer with major
downfall from January 21, 2008

25 June 2008 The SENSEX touched an intra day low of 13,731 during the early trades, then
pulled back and ended up at 14,220 amidst a negative sentiment generated on the Reserve
Bank of India hiking CRR by 50 bps. FII outflow continued in this week.

2 July 2008 The SENSEX hit an intraday low of 12,822.70 on July 2, 2008. This is the
lowest that it has ever been in the past year. Six months ago, on January 10, 2008, the market
had hit an all-time high of 21206.70. This is a bad time for the Indian markets, although
Reliance and Infosys continue to lead the way with mostly positive results.

6 October 2008 The SENSEX closed at 11801.70 hitting the lowest in the past 2 years.

10 October 2008 The SENSEX today closed at 10527, 800.51 points down from the previous
day having seen an intraday fall of as large as 1063 points. Thus, this week turned out to be
the week with largest percentage fall in the SENSEX

18 May 2009 After the result of 15th Indian general election SENSEX gained 2100.79 points
from the previous close of 12173.42, a record one-day gain. In the opening trade itself the
SENSEX evinced a 15% gain over the previous close which led to a two-hour suspension in
trading. After trading resumed, the SENSEX surged again, leading to a full day suspension of
trading.

19 October 2010 BSE introduced the 15-minute special pre-open trading session, a

mechanism under which investors can bid for stocks before the market opens. The
mechanism, known as 'pre-open session call auction', lasted for 15 minutes (from 9:00-9:15
am).

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5 November 2010 BSE SENSEX crossed the 21000 mark (exactly 21004.96).
27 December 2010 BSE SENSEX is at 20,028.93.
Indices

The graph of SENSEX from July 1997 to March 2011

The launch of SENSEX in 1986 was later followed up in January 1989 by

introduction of BSE National Index (Base: 1983-84 = 100). It comprised 100 stocks listed at
five major stock exchanges in India - Mumbai, Calcutta, Delhi, Ahmedabad and Madras. The
BSE National Index was renamed BSE-100 Index from October 14, 1996 and since then, it is
being calculated taking into consideration only the prices of stocks listed at BSE. BSE
launched the dollar-linked version of BSE-100 index on May 22, 2006. BSE launched two
new index series on 27 May 1994: The 'BSE-200' and the 'DOLLEX-200'. BSE-500 Index
and 5 sectorial indices were launched in 1999. In 2001, BSE launched BSE-PSU Index,
DOLLEX-30 and the country's first free-float based index - the BSE Tieck Index. Over the
years, BSE shifted all its indices to the free-float methodology (except BSE-PSU index). BSE
disseminates information on the Price-Earnings Ratio, the Price to Book Value Ratio and the
Dividend Yield Percentage on day-to-day basis of all its major indices. The values of all BSE
indices are updated on real time basis during market hours and displayed through the BOLT
system, BSE website and news wire agencies. All BSE Indices are reviewed periodically by
the BSE Index Committee. This Committee which comprises eminent independent finance
professionals frames the broad policy guidelines for the development and maintenance of all
BSE indices. The BSE Index Cell carries out the day-to-day maintenance of all indices and
conducts research on development of new indices.

SENSEX is significantly correlated with the stock indices of other emerging markets.

Awards

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  The World Council of Corporate Governance has awarded the Golden Peacock
Global CSR Award for BSE's initiatives in Corporate Social Responsibility
(CSR).
 The Annual Reports and Accounts of BSE for the year ended March 31, 2006 and
March 31, 2007 have been awarded the ICAI awards for excellence in financial
reporting.
 The Human Resource Management at BSE has won the Asia - Pacific HRM
awards for its efforts in employer branding through talent management at work,
health management at work and excellence in HR through technology

NATIONAL STOCK EXCHANGE (NSE)

National Stock Exchange (NSE) is considered to be the leader in the stock exchange
scenario in terms of the total volume traded. The market capitalization the National Stock
Exchange touched about $921.31 billion at the end of May 2009. The National Stock
Exchange received the recognition of a stock exchange in July 1993 under Securities
Contracts (Regulation) Act, 1956. The products that are traded in the National Stock
Exchange are:- 

 Equity or Share
 Futures (both index and stock)
 Options (Call and Put)
 Wholesale Debt Market
 Retail Debt Market

NSE has a fully automated screen based trading system which is known as the NEAT
system. The transactions are carried on with speed, efficiency, and are all transparent. The
risk management system of the National Stock Exchange is world class and can be
considered as the benchmark for other bourses. 

The leading index of NSE is known as Nifty 50 or just Nifty. It comprises of 50

diversified benchmark Indian company scrip and is constructed on the basis of weighted
average market capitalization method.

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 National Stock Exchange
Location of National Stock Exchange in India

Type Stock Exchange

Location Mumbai, India
Coordinates 19°3′37″N 72°51′35″E
Founded 1992
Owner National Stock Exchange of India
Limited
Key people Ravi Narain (MD)
Currency Indian rupee ( )
No. of listings 1,552
MarketCap US$1.59 trillion (Dec 2010)
Indexes S&P CNX Nifty
CNX Nifty Junior
S&P CNX 500
Website www.nse-india.com

17
 NSE building at BKC, Mumbai

The National Stock Exchange (NSE) (Hindi: राष्ट्रीयशेअरबाज़ार Rashtriya Śhare

Bāzaār) is astock exchange located at Mumbai, Maharashtra, India. It is the 9th largest stock

exchangein the world by market capitalization and largest in India by daily turnover and

number of trades, for both equities and derivative trading. NSE has a market capitalization of

aroundUS$1.59 trillion and over 1,552 listings as of December 2010. 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

NSE NIFTY (National Stock Exchange Fifty), 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, the NSE VSAT terminals,

2799 in total, cover more than 1500 cities across India. NSE is the third largest Stock

18
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

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 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) trades in India.
 Co-promoting and setting up of National Securities Depository Limited, first
depository in India 
 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.
 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 CNBC-TV18.

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  NSE.IT Limited, setup in 1999 , is a 100% subsidiary of the National Stock

Exchange of India. A Vertical Specialist Enterprise, NSE.IT offers end-to-end

Information Technology (IT) products, solutions and services.

 NSE (National Stock Exchange) was the first exchange in the world to use

satellite communication technology for trading, using a client server based system

called National Exchange for Automated Trading (NEAT). For all trades entered

into NEAT system, there is uniform response time of less than one second.

Markets

Currently, NSE has the following major segments of the capital market:

 Equity

 Futures and Options

 Retail Debt Market

 Wholesale Debt Market

 Currency futures

 Mutual Fund

 Stocks lending and borrowing

August 2008 Currency derivatives were introduced in India with the launch of

Currency Futures in USD INR by NSE. Currently it has also launched currency futures in

EURO, POUND & YEN. Interest Rate Futures was introduced for the first time in India by

NSE on 31 August 2009, exactly after one year of the launch of Currency Futures.

NSE became the first stock exchange to get approval for Interest rate futures as

recommended by SEBI-RBI committee, on 31 August 2009, a futures contract based on 7%

10 Year GOI bond (NOTIONAL) was launched with quarterly maturities. 

Hours

NSE's normal trading sessions are conducted from 9:15 am India Time to 3:30 pm
India Time on all days of the week except Saturdays, Sundays and Official Holidays declared

20
by the Exchange (or by the Government of India) in advance. The exchange, in association
with BSE (Bombay Stock Exchange Ltd.), is thinking of revising its timings from 9.00 am
India Time to 5.00 pm India Time.

There were System Testing going on and opinions, suggestions or feedback on the
New Proposed Timings are being invited from the brokers across India. And finally on 18
November 2009 regulator decided to drop their ambitious goal of longest Asia Trading Hours
due to strong opposition from its members.

On 16 December 2009, NSE announced that it would advance the market opening to
9:00 am from 18 December 2009. So NSE trading hours will be from 9.00 am till 3:30 pm
India Time.

However, on 17 December 2009, after strong protests from brokers, the Exchange
decided to postpone the change in trading hours till 4 Jan 2010.

NSE new market timing from 4 Jan 2010 is 9:00 am till 3:30 pm India Time.

Milestones

 November 1992 Incorporation

 April 1993 Recognition as a stock exchange
 May 1993 Formulation of business plan
 June 1994 Wholesale Debt Market segment goes live
 November 1994 Capital Market (Equities) segment goes live
 March 1995 Establishment of Investor Grievance Cell
 April 1995 Establishment of NSCCL, the first Clearing Corporation
 June 1995 Introduction of centralized insurance cover for all trading members
 July 1995 Establishment of Investor Protection Fund
 October 1995 Became largest stock exchange in the country
 April 1996 Commencement of clearing and settlement by NSCCL
 April 1996 Launch of S&P CNX Nifty
 June 1996 Establishment of Settlement Guarantee Fund
 November 1996 Setting up of National Securities Depository Limited, first
depository in India, co-promoted by NSE
 November 1996 Best IT Usage award by Computer Society of India

21
 December 1996 Commencement of trading/settlement in dematerialized securities
 December 1996 Dataquest award for Top IT User
 December 1996 Launch of CNX Nifty Junior
 February 1997 Regional clearing facility goes live
 November 1997 Best IT Usage award by Computer Society of India
 May 1998 Promotion of joint venture, India Index Services & Products Limited
(IISL)
 May 1998 Launch of NSE's Web-site: www.nse.co.in
 July 1998 Launch of NSE's Certification Programmed in Financial Market
 August 1998 CYBER CORPORATE OF THE YEAR 1998 award
 February 1999 Launch of Automated Lending and Borrowing Mechanism
 April 1999 CHIP Web Award by CHIP magazine
 October 1999 Setting up of NSE.IT
 January 2000 Launch of NSE Research Initiative
 February 2000 Commencement of Internet Trading
 June 2000 Commencement of Derivatives Trading (Index Futures)
 September 2000 Launch of 'Zero Coupon Yield Curve'
 November 2000 Launch of Broker Plaza by Dotex International, a joint venture
between NSE.IT Ltd. and i-flex Solutions Ltd.
 December 2000 Commencement of WAP trading
 June 2001 Commencement of trading in Index Options
 July 2001 Commencement of trading in Options on Individual Securities
 November 2001 Commencement of trading in Futures on Individual Securities
 December 2001 Launch of NSE VaR for Government Securities
 January 2002 Launch of Exchange Traded Funds (ETFs)
 May 2002 NSE wins the Wharton-Infosys Business Transformation Award in the
Organization-wide Transformation category
 October 2002 Launch of NSE Government Securities Index
 January 2003 Commencement of trading in Retail Debt Market
 June 2003 Launch of Interest Rate Futures
 August 2003 Launch of Futures & options in CNXIT Index
 June 2004 Launch of STP Interoperability

22
 August 2004 Launch of NSE’s electronic interface for listed companies
 March 2005 ‘India Innovation Award’ by EMPI Business School, New Delhi
 June 2005 Launch of Futures & options in BANK Nifty Index
 December 2006 'Derivative Exchange of the Year', by Asia Risk magazine
 January 2007 Launch of NSE – CNBC TV 18 media Centre
 March 2007 NSE, CRISIL announce launch of IndiaBondWatch.com
 June 2007 NSE launches derivatives on Nifty Junior & CNX 100
 October 2007 NSE launches derivatives on Nifty Midcap 50
 January 2008 Introduction of Mini Nifty derivative contracts on 1 January 2008
 March 2008 Introduction of long term option contracts on S&P CNX Nifty Index
 April 2008 Launch of India VIX
 April 2008 Launch of Securities Lending & Borrowing Scheme
 August 2008 Launch of Currency Derivatives
 August 2009 Launch of Interest Rate Futures
 November 2009 Launch of Mutual Fund Service System
 December 2009 Commencement of settlement of corporate bonds
 February 2010 Launch of Currency Futures on additional currency pairs
 October 2010 Launch of 15-minute special pre-open trading session, a mechanism
under which investors can bid for stocks before the market opens. 

Indices

Graph of S&P CNX Nifty from January 1997 to March 2011

23
 NSE also set up as index services firm known as India Index Services & Products

Limited (IISL) and has launched several stock indices, including:

 S&P CNX Nifty(Standard & Poor's CRISIL NSE Index)

 CNX Nifty Junior

 CNX 100 (= S&P CNX Nifty + CNX Nifty Junior)

 S&P CNX 500 (= CNX 100 + 400 major players across 72 industries)

 CNX Midcap (introduced on 18 July 2005 replacing CNX Midcap 200)

Exchange traded funds on NSE

NSE has a number of exchange traded funds. These are typically index funds and

GOLD ETFs. Some of the popular ETF's available for trading on NSE are:

 NIFTYBEES - ETF based on NIFTY index Nifty BEES Live quote

 Gold Bees - ETF based on Gold prices. Tracks the price of Gold. Each unit is

equivalent to 1 gm. of gold and bears the price of 1gm of gold.

 Bank Bees - ETF that tracks the CNX Bank Index.

Certifications

NSE also conducts online examination and awards certification, under its programs of
NSE's Certification in Financial Markets (NCFM). Currently, certifications are available in
19 modules, covering different sectors of financial and capital markets. Branches of the NSE
are located throughout India. NSE, in collaboration with reputed colleges and institutes in
India, has been offering a short-term course called NSE Certified Capital Market Professional
(NCCMP) since August 2009, in the campuses of the respective colleges/ institutes.

Regulatory Authority of Indian Share Market

SEBI or Securities and Exchange Board of India is the market watchdog and has the
responsibility of protecting the investors' interests, develops regulatory norms and helps in
the development of the securities market in India.

24
Why to invest in Indian Share Market

 An investor does not require a lot of money to start investing in India share market
unlike buying property and paying off a monthly mortgage.
 Time of trading involved spans from small to big. One can trade for a short period
of time or even a lengthy span.
 It helps you to see 'fast' cash if the market is in robust mood and helps in fast
liquidation.

Essential rules of Indian Share Market

 Whenever share market is at its crest it is bound to dip at some point of time.
 If the share market is down, it will only increase if there are no external aspects
influencing it.
 Unlike the common belief of investing in booming share market, it is advisable
not to block your hard earned money in already flourishing Sensex and NIFTY. It
is better to wait for market bottom trend and then purchase shares at lower cost in
order to trade it later.
 The excellent time for investment is when the market is low keeping the basics in
consideration.
 Seek the advice of professionals who will not only provide you tips on best
investment options but also on favorable market conditions.
 Update yourself on the prevailing market conditions
 Whenever market witness an upward trend always purchase first and then sell the
securities, and when the market dips always buy later and sell first.

Tips on investing intelligently in Indian Share Market

 Consider selling the shares which you have bought long time back and are

indicating gains. Even if they are not willing to offer you considerable gains then

its time to get rid of them are invest your money in productive schemes.

 Diversify your shares buy investing in different sectors. Also consider investing in
equity funds and to stabilize your equity investments invest a part in fixed income
options like the bonds, Public Provident Fund, National Savings Certificates and

25
 post office deposits. You can also consider a balanced or debt fund if you have
restrained budget.

 Do not consider the shares based on layman's advice. Stride carefully and invest in
shares that you are comfortable investing in. Judge the firm by its past records and
assess it personally. Take the advice of the fund manager who manages that
specific fund.

 If you have allocated more than half of your investments in equity, then stick to
your plan. Do not surpass that pre-decided perimeter and believe in the
performance of the market.

Other leading cities in stock market operations

Ahmedabad gained importance next to Bombay with respect to cotton textile industry.
After 1880, many mills originated from Ahmedabad and rapidly forged ahead. As new mills
were floated, the need for a Stock Exchange at Ahmedabad was realized and in 1894 the
brokers formed "The Ahmedabad Share and Stock Brokers' Association".

What the cotton textile industry was to Bombay and Ahmedabad, the jute industry
was to Calcutta. Also tea and coal industries were the other major industrial groups in
Calcutta. After the Share Mania in 1861-65, in the 1870's there was a sharp boom in jute
shares, which was followed by a boom in tea shares in the 1880's and 1890's; and a coal
boom between 1904 and 1908. On June 1908, some leading brokers formed "The Calcutta
Stock Exchange Association".

In the beginning of the twentieth century, the industrial revolution was on the way in
India with the Swadeshi Movement; and with the inauguration of the Tata Iron and Steel
Company Limited in 1907, an important stage in industrial advancement under Indian
enterprise was reached.

Indian cotton and jute textiles, steel, sugar, paper and flour mills and all companies
generally enjoyed phenomenal prosperity, due to the First World War.

In 1920, the then demure city of Madras had the maiden thrill of a stock exchange
functioning in its midst, under the name and style of "The Madras Stock Exchange" with 100

26
members. However, when boom faded, the number of members stood reduced from 100 to 3,
by 1923, and so it went out of existence.

In 1935, the stock market activity improved, especially in South India where there
was a rapid increase in the number of textile mills and many plantation companies were
floated. In 1937, a stock exchange was once again organized in Madras - Madras Stock
Exchange Association (Pvt) Limited.(In 1957 the name was changed to Madras Stock
Exchange Limited).

Lahore Stock Exchange was formed in 1934 and it had a brief life. It was merged with
the Punjab Stock Exchange Limited, which was incorporated in 1936.

Indian Stock Exchanges - An Umbrella Growth

The Second World War broke out in 1939. It gave a sharp boom which was followed
by a slump. But, in 1943, the situation changed radically, when India was fully mobilized as a
supply base.

On account of the restrictive controls on cotton, bullion, seeds and other commodities,
those dealing in them found in the stock market as the only outlet for their activities. They
were anxious to join the trade and their number was swelled by numerous others. Many new
associations were constituted for the purpose and Stock Exchanges in all parts of the country
were floated.

The Uttar Pradesh Stock Exchange Limited (1940), Nagpur Stock Exchange Limited
(1940) and Hyderabad Stock Exchange Limited (1944) were incorporated.

In Delhi two stock exchanges - Delhi Stock and Share Brokers' Association Limited
and the Delhi Stocks and Shares Exchange Limited - were floated and later in June 1947,
amalgamated into the Delhi Stock Exchange Association Limited.

Post-independence Scenario

Most of the exchanges suffered almost a total eclipse during depression. Lahore
Exchange was closed during partition of the country and later migrated to Delhi and merged
with Delhi Stock Exchange.

Bangalore Stock Exchange Limited was registered in 1957 and recognized in 1963.

27
 Most of the other exchanges languished till 1957 when they applied to the Central
Government for recognition under the Securities Contracts (Regulation) Act, 1956. Only
Bombay, Calcutta, Madras, Ahmedabad, Delhi, Hyderabad and Indore, the well-established
exchanges, were recognized under the Act. Some of the members of the other Associations
were required to be admitted by the recognized stock exchanges on a concessional basis, but
acting on the principle of unitary control, all these pseudo stock exchanges were refused
recognition by the Government of India and they thereupon ceased to function.

Thus, during early sixties there were eight recognized stock exchanges in India
(mentioned above). The number virtually remained unchanged, for nearly two decades.
During eighties, however, many stock exchanges were established: Cochin Stock Exchange
(1980), Uttar Pradesh Stock Exchange Association Limited (at Kanpur, 1982), and Pune
Stock Exchange Limited (1982), Ludhiana Stock Exchange Association Limited (1983),
Gauhati Stock Exchange Limited (1984), Kanara Stock Exchange Limited (at Mangalore,
1985), Magadh Stock Exchange Association (at Patna, 1986), Jaipur Stock Exchange Limited
(1989), Bhubaneswar Stock Exchange Association Limited (1989), Saurashtra Kutch Stock
Exchange Limited (at Rajkot, 1989), Vadodara Stock Exchange Limited (at Baroda, 1990)
and recently established exchanges - Coimbatore and Meerut. Thus, at present, there are
totally twenty one recognized stock exchanges in India excluding the Over The Counter
Exchange of India Limited (OTCEI) and the National Stock Exchange of India Limited
(NSEIL).

The Table given below portrays the overall growth pattern of Indian stock markets
since independence. It is quite evident from the Table that Indian stock markets have not only
grown just in number of exchanges, but also in number of listed companies and in capital of
listed companies. The remarkable growth after 1985 can be clearly seen from the Table, and
this was due to the favoring government policies towards security market industry.

Growth Pattern of the Indian Stock Market

As on 31st 1946 1961 1971 1975 1980 1985 1991 1995

Sl.No.
December
No. of 7 7 8 8 9 14 20 22
1
Stock Exchanges
No. of  1125 1203 1599 1552 2265 4344 6229 8593
2
Listed Cos.
3 No. of Stock 1506 2111 2838 3230 3697 6174 8967 11784
Issues of 

28
 Listed Cos.
Capital of Listed 270 753 1812 2614 3973 9723 32041 59583
4
Cos. (Cr. Rs.)
Market value of 971 1292 2675 3273 6750 25302 110279 478121
5 Capital of Listed
Cos. (Cr. Rs.)
Capital per 24 63 113 168 175 224 514 693
6 Listed Cos. (4/2)
(Lakh Rs.)
Market Value of 86 107 167 211 298 582 1770 5564
Capital per Listed
7
Cos. (Lakh Rs.)
(5/2)
Appreciated value  358 170 148 126 170 260 344 803
8 of Capital per
Listed Cos. (LakRs.)

Source: Various issues of the Stock Exchange Official Directory, Vol.2 (9) (iii),
Bombay Stock Exchange, Bombay.
Trading Pattern of the Indian Stock Market

Trading in Indian stock exchanges are limited to listed securities of public limited

companies. They are broadly divided into two categories, namely, specified securities

(forward list) and non-specified securities (cash list). Equity shares of dividend paying,

growth-oriented companies with a paid-up capital of atleast Rs.50 million and a market

capitalization of at least Rs.100 million and having more than 20,000 shareholders are,

normally, put in the specified group and the balance in non-specified group.

Two types of transactions can be carried out on the Indian stock exchanges: (a) spot

delivery transactions "for delivery and payment within the time or on the date stipulated

when entering into the contract which shall not be more than 14 days following the date of

the contract" : and (b) forward transactions "delivery and payment can be extended by further

period of 14 days each so that the overall period does not exceed 90 days from the date of the

contract". The latter is permitted only in the case of specified shares. The brokers who carry

over the outstanding’s pay carry over charges (cantango or backwardation) which are usually

determined by the rates of interest prevailing.

29
 A member broker in an Indian stock exchange can act as an agent, buy and sell

securities for his clients on a commission basis and also can act as a trader or dealer as a

principal, buy and sell securities on his own account and risk, in contrast with the practice

prevailing on New York and London Stock Exchanges, where a member can act as a jobber

or a broker only.

The nature of trading on Indian Stock Exchanges are that of age old conventional

style of face-to-face trading with bids and offers being made by open outcry. However, there

is a great amount of effort to modernize the Indian stock exchanges in the very recent times.

Over The Counter Exchange of India (OTCEI)

The traditional trading mechanism prevailed in the Indian stock markets gave way to
many functional inefficiencies, such as, absence of liquidity, lack of transparency, unduly
long settlement periods and benami transactions, which affected the small investors to a great
extent. To provide improved services to investors, the country's first ringless, scripless,
electronic stock exchange - OTCEI - was created in 1992 by country's premier financial
institutions - Unit Trust of India, Industrial Credit and Investment Corporation of India,
Industrial Development Bank of India, SBI Capital Markets, Industrial Finance Corporation
of India, General Insurance Corporation and its subsidiaries and CanBank Financial Services.

Trading at OTCEI is done over the center’s spread across the country. Securities
traded on the OTCEI are classified into:

 Listed Securities - The shares and debentures of the companies listed on the OTC
can be bought or sold at any OTC counter all over the country and they should not
be listed anywhere else

 Permitted Securities - Certain shares and debentures listed on other exchanges and
units of mutual funds are allowed to be traded

 Initiated debentures - Any equity holding at least one lakh debentures of a

particular scrip can offer them for trading on the OTC.

30
 OTC has a unique feature of trading compared to other traditional exchanges. That is,
certificates of listed securities and initiated debentures are not traded at OTC. The original
certificate will be safely with the custodian. But, a counter receipt is generated out at the
counter which substitutes the share certificate and is used for all transactions.

In the case of permitted securities, the system is similar to a traditional stock

exchange. The difference is that the delivery and payment procedure will be completed
within 14 days.

Compared to the traditional Exchanges, OTC Exchange network has the following
advantages:

 OTCEI has widely dispersed trading mechanism across the country which

provides greater liquidity and lesser risk of intermediary charges.

 Greater transparency and accuracy of prices is obtained due to the screen-based

scrip less trading.

 Since the exact price of the transaction is shown on the computer screen, the

investor gets to know the exact price at which s/he is trading.

 Faster settlement and transfer process compared to other exchanges.

 In the case of an OTC issue (new issue), the allotment procedure is completed in a

month and trading commences after a month of the issue closure, whereas it takes

a longer period for the same with respect to other exchanges.

Thus, with the superior trading mechanism coupled with information transparency

investors are gradually becoming aware of the manifold advantages of the OTCEI.

31
 1.3 INTRODUCTION ABOUT THE TOPIC

In finance, a trade is an exchange of a security (stocks, bonds, commodities,

currencies, derivatives or any valuable financial instrument) for "cash", typically a short-

dated promise to pay in the currency of the country where the 'exchange' is located. Trading

implies attempting to profit from short-term fluctuations in a security's price as opposed to

buying it for use or for income via methods such as dividends or interest. Trading is similar to

speculation and investing, but differs in that the position in the security is intended to be held

for a very short time, generally less than a week; however 'trades' are used to implement any

investing strategy

SHARE -Money required by a company to commence and carry on its operations is raised by

issuing shares and debentures. Although there are other sources of raising funds (like

acceptance of public deposits, taking bank loans, etc.), issue of shares is the bulk of fund

requirement by a company. The term ‘Share Capital of a company’ can be used in the

following concepts:–

 Authorised Capital: This presents the value of shares with which a company is

registered.

 Issued Capital: This means the portion of authorised capital that is being offered for

public subscription.

 Subscribed Capital: This presents that portion of issued Capital that is being taken

32
 up by public.

 Called up Capital: This represents that part of subscribed capital that the directors

have decided to call up from the subscriber to satisfy the monetary needs of the

company.

 Paid up Capital: That portion of called up capital that is being actually paid in cash

by the shareholders.

Types of Shares

A company can issue two types of shares:–

 Preference shares:

Preference shares carry a fixed rate of dividend which is to be paid before distribution

of Equity Dividend. At the time of winding up of the company the claim of preference

shares towards repayment of capital has to be satisfied before satisfying claim of

Equity Shareholders. Preference share holders can neither get the Notice of A.G.M

nor are they able to take part in deliberation of the meeting except when their

dividend has remained unpaid for a specified number of years. Preference shares can

be cumulative or noncumulative.

 Equity shares:

Equity shares are those which are not preference shares. They do not carry any

specific rate of dividend; i.e. the rate of dividend can vary over the years depending

on the sufficiency of profit. They are allowed to get notice and attend the A.G.M. of

the company

DEBENTURE - A debenture is defined as a certificate of agreement of loans which

is given under the company's stamp and carries an undertaking that the debenture holder will

33
get a fixed return (fixed on the basis of interest rates) and the principal amount whenever the

debenture matures.

In finance, a debenture is a long-term debt instrument used by governments and large

companies to obtain funds. It is defined as "a debt secured only by the debtor’s earning

power, not by a lien on any specific asset." It is similar to a bond except the securitization

conditions are different. A debenture is usually unsecured in the sense that there are no liens

or pledges on specific assets. It is, however, secured by all properties not otherwise pledged.

In the case of bankruptcy, debenture holders are considered general creditors. The advantage

of debentures to the issuer is they leave specific assets burden free, and thereby leave them

open for subsequent financing. Debentures are generally freely transferable by the debenture

holder. Debenture holders have no voting rights and the interest given to them is a charge

against profit.

DERIVATIVE - The concept of Derivative is at the core of Calculus and modern

mathematics. The definition of the derivative can be approached in two different ways. One is

geometrical (as a slope of a curve) and the other one is physical (as a rate of change).

Historically there was (and maybe still is) a fight between mathematicians which of the two

illustrates the concept of the derivative best and which one is more useful. We will not dwell

on this and will introduce both concepts. Our emphasis will be on the use of the derivative as

a tool

BONDS -A bond is a type of debt. It's a loan from an investor to an institution, and in

exchange the investor collects a predetermined interest rate. When a company needs capital

to expand its business, it issues bonds to the public. Investors buy them with the

understanding that they will collect the original principal plus interest when the bond matures

at a set date. Federal, state, and municipal governments issue bonds for a similar purpose, to

raise money for projects and public programs.

34
USUALLY THE FOLLOWING TOOLS & INSTRUMENTS ARE USED
TO DO THE TECHNICAL ANALYSIS:

Price Fields : Technical analysis is based almost entirely on the analysis of price and
volume. The fields which define a security's price and volume are explained below.

Open: This is the price of the first trade for the period (e.g., the first trade of the day).
When analyzing daily data, the Open is especially important as it is the consensus price after
all interested parties were able to "sleep on it."

High: This is the highest price that the security traded during the period. It is the point
at which there were more sellers than buyers (i.e., there are always sellers willing to sell at
higher prices, but the High represents the highest price buyers were willing to pay).

Low: This is the lowest price that the security traded during the period. It is the point
at which there were more buyers than sellers (i.e., there are always buyers willing to buy at
lower prices, but the Low represents the lowest price sellers were willing to accept).

Close: This is the last price that the security traded during the period. Due to its
availability, the Close is the most often used price for analysis. The relationship between the
Open (the first price) and the Close (the last price) are considered significant by most
technicians. This relationship is emphasized in candlestick charts.

Volume: This is the number of shares (or contracts) that were traded during the
period. The relationship between prices and volume (e.g., increasing prices accompanied with
increasing volume) is important.

Open Interest:This is the total number of outstanding contracts (i.e., those that have
not beenexercised, closed, or expired) of a future or option. Open interest is often used as an
indicator.

Bid: This is the price a market maker is willing to pay for a security (i.e., the price
you will receive if you sell).

35
 Ask: This is the price a market maker is willing to accept (i.e., the price you will pay
to buy the security).

Chart Styles:Price in a chart can be displayed in following styles:

1. Bar Chart.
2. Line Chart.
3. Candlestick Chart.

1) Bar Charts:

The highs and lows of a stock are plotted in a diagram and the points are joined with
vertical lines (bars). A small horizontal tick to the left denotes the opening level while a small
horizontal tick to the right represents the closing price of each interval.

2) Line Chart

It gives the detailed information about every aspect. The stock prices for each time
period are plotted in a diagram and the points are joined. Prices on the y-axis and time on the
x-axis.The line chart chooses for example the closing price of consecutive time periods, but
can also work with daily, official fixings.

36
 3) Candlestick Chart

Although candlestick charts are nearly identical to typical Western bar charts, there is
one important distinction: candlestick charts are far more dramatic in their presentation.
Instead of the standardhigh-to-low vertical lines accompanied by horizontal ticks that identify
the day's open and close, candlestick charts employ two-dimensional bodies to depict the
open-to-close trading range and upper and lower stems (or shadows) to mark the day's high
and low. A candlestick is black if the closing price is lower than the opening price. A
candlestick is white if the closing price is higher than the opening price.

Candlestick Patterns

Bullish Patterns

1) Long white (empty) line. This is a bullish line. It occurs

when prices open near the low and close significantly higher near
the period's high.

2) Hammer. This is a bullish line if it occurs after a significant downtrend. If the line
occurs after a significant up-trend, it is called a Hanging Man. A Hammer is
identified by a small real body (i.e., a small range between the open and
closing prices) and a long lowershadow (i.e., the low is significantly
lower than the open, high, and close). The body can be empty or filled-in.

37
 3) Piercing line. This is a bullish pattern and the opposite of a dark cloud cover. The

first line is a long black line and the second line is a long white line. The

second line opens lower than the first line's low, but it closes more than

halfway above the first line's real body.

4) Bullish engulfing lines. This pattern is strongly bullish if it occurs after

a significant downtrend (i.e., it acts as a reversal pattern). It occurs when a

small bearish (filled-in) line is engulfed by a large bullish (empty) line.

5) Morning star. This is a bullish pattern signifying a potential

bottom. The "star" indicates a possible reversal and the bullish (empty) line

confirms this. The star can beempty or filled-in.

6) Bullish doji star. A "star" indicates a reversal and a doji indicates

indecision. Thus, this pattern usually indicates a reversal following an

indecisive period. You should wait for a confirmation (e.g., as in the morning star,

above) before trading a doji star. The first line can be empty or filled in.

Bearish Patterns

1) Long black (filled-in) line. This is a bearish line. It occurs when

prices open near the high and close significantly lower near the period's low.

2) Hanging Man. These lines are bearish if they occur after a

significant uptrend. If this pattern occurs after a significant downtrend, it is
called a Hammer. They are identified by small real bodies (i.e., a small range
between the open and closing prices) and a long lower shadow (i.e., the low was
significantly lower than the open, high, and close). The bodies can be empty or
filled-in.

38
 3) Dark cloud cover. This is a bearish pattern. The pattern is more significant if the

second line's body is below the center of the previous line's body (as

illustrated).

4) Bearish engulfing lines. This pattern is strongly bearish if it

occurs after a significant uptrend (i.e., it acts as a reversal pattern). It occurs

when a small bullish (empty) line is engulfed by a large bearish (filled-in) line.

5) Evening star. This is a bearish pattern signifying a potential top. The

"star" indicates a possible reversal and the bearish (filled-in) line confirms this.

The star can be empty or filled in.

5) Doji star. A star indicates a reversal and a doji indicates indecision.

Thus, this pattern usually indicates a reversal following an indecisive period. You should
wait for a confirmation (e.g., as in the evening star illustration) before trading a doji star.

Key Technical Indicators

There are several indicators that are used in technical analysis. But I have chosen to
highlight thefollowing indicators as I have used some of these further in the project.

1. Moving average
2. Relative Strength Index (RSI)
3. Larry William’s % R
4. Moving average Convergence Divergence (MACD)
5. Fibonacci tools

1) Moving average

The moving average essentially a trend following indicator or a laggingindicator as it

is formed after the price movement occurs. Its purpose is to identify or signal that a new trend
has begun or that an old trend has ended or reversed. Its purpose is to track the progress of the
trend.

39
 There are three types of moving averages that are used by technical analysts. They are

a) Simple moving average

It is calculated by taking the average of the previous 10 or 15 closing prices. The

weights given to each day is the same i.e. in a 10 day simple moving average, theweight

given for the 10th day closing price is the same as the weight given for the 1st day closing

price. The disadvantage of the simple moving average is that it reacts slower to the price

movement when compared to an exponential moving average.

b) Linearly weighted moving average

In this type of moving average weights are given in a linear proportion to each day’s

closing price i.e. the 10th day closing price is multiplied with 10, the 9th day with 9, and so

on. The greater weight is given to the most recent closing.

c) Exponential moving average

The exponential moving average assigns greater weight to more recent data and it

includes in its calculation all of the data in the life of the instrument. The advantage of using

exponential moving averages is that it reacts quicker to the price movement than a simple

moving average.

Analyzing moving averages

40
 There are two ways to analyze moving averages. They are as follows:

a) Single moving average and price

A single moving average is used to generate buy and sell signals. When the price line
moves above the moving average, a buy signal is generated. Conversely, when the price line
moves below the moving average, a sell signal is generated.

b) Double crossover method

In this case two moving averages are used. One is a shorter moving average and the
other a longer moving average. When the shorter moving average crosses above the longer
moving average, a buy signal is generated. Conversely, when the shorter moving average
crosses below the longer moving average, a sell signal is generated.

2) Relative Strength Index (RSI)

Relative strength generally means a ratio line comparing two different entities. A ratio
of a stock or industry group to the Sensex is one way of gauging relative strength of different
stocks or industry groups against one objective benchmark. Relative strength index solves the
problem of erratic movement and the need for constant upper and lower boundary.

The formula used for calculating RSI is

RSI=100-100/1+RS
RS=Average of x days’ up close/ Average of x days’ down close

Analyzing Relative Strength Index

RSI is plotted on a vertical scale of 0 to 100. Movements above 70 are considered

overbought while an oversold condition would be move under 30. Because of shifting that

41
takes place in bull and bear market, the 80 level usually becomes overbought level in bull
market and the 20 level the oversold level in bear market.

3) Larry William’s % R

Larry William’s % R measures the latest close in relation to its price range over a
given number of days. Today’s close is subtracted from the price high of the range for a given
number of days and that difference is divided by the total range for the same period. In
technical analysis this is a momentum indicator measuring overbought and oversold levels. It
is used to determine market entry and exit points.

Analyzing William’s % R

The William’s % R produces values from 0 to -100. A reading over 80 usually

indicates a stock is oversold, while reading below 20 suggests a stock is overbought.

42
CHAPTER – II

43
 RESEARCH METHODOLOGY

2.1 STATEMENT OF THE RESEARCH PROBLEM

Research in common parlance refers to a search for knowledge. One can also define
researchas a scientific and systematic search for pertinent information on a specific topic.

2.2 STATEMENT OF RESEARCH OBJECTIVES

The project report is based on the topic “Analysis of Indian share market and trading

techniques”. The following are the objectives of the project report:

1. To understand and analyze the functioning of the capital markets

2. To understand the importance of macroeconomic variables and analyze its effect on

the Indian stock market

2.3 RESEARCH DESIGN AND METHODOLOGY

Research Design is the conceptual structure within which research is conducted. It

constitutes the blueprint for collection, measurement and analysis of data. The design usedfor

carrying out this research is Exploratory.

Data type

 Primary Data:- Interviews

Through conducting structured interviews with HR Manager Director &
Managing Director

Employees of the company

44
  Secondary data

Data source: The sources of collection of data are:

o Websites
o Books

The methodology used by me is :

 Case study
 Sources of Data Collection
 Primary Data
 Secondary Data
 Tools of Data Collection.

Sample Size:

Questionnaire was filled up by 175 employees doing permanent & temporary kind of
job at the company.

Analysis:

Interpretations of the questionnaire are given ahead in this project in the form of
graphs, tables & percentages.

Information Analysis

The data collected from both companies is put before you in theoretical form. The

data collected through questionnaire is compiled & put in form graphs, tables & percentage

form.

45
CHAPTER - III

46
 DATA ANALYSIS AND INTERPRETATION

Secondary Data Analysis

ANALYSIS OF INDIAN SHARE MARKET AND TRADING TECHNIQUES

Trading Strategy

As part of my technical analysis I worked on a technique for delivery based trading. I

have used 15minute candlestick chart along with 2 exponential moving averages (8 EMA &

34 EMA) for my study. Candlestick chart is used as they are far more dramatic in their

presentation and it employ two-dimensional bodies to depict the open-to-close trading range

and upper and lower stems (or shadows) to mark the day's high and low. The idea of using

exponential moving average is that it assigns greater weight to more recent data, and thereby

reacts quicker to the price movement than a simple moving average. I have specifically used

8 and 34 EMAs as they are Fibonacci numbers and hold much importance in analyzing stock

prices.

I have analyzed both the EMAs with double crossover method, i.e., when the 8 EMA

crosses above the 34 EMA, a buy signal is generated. Conversely, when the 8 EMA crosses

below the 34 EMA, a sell signal is generated. For my study I have considered only buy

signals as we can shortsell only in intraday trading.

For the buy signal, I have considered the closing price of the candlestick which is

forming just after the crossover. The position has to be kept until I get a signal to close the

position.

To close the position I have followed two different strategies. They are:

47
 1. Closing the position with the first candlestick being formed below the lower

moving average.

2. Closing the position when a candlestick is formed whose closing is below the

lower moving average.

Process for the study

The purpose of this project was to find a successful trading system using candlesticks

and moving averages in tandem. Two exponential moving averages were used namely 8

EMA and 34 EMA with the help of which trading signal has to be generated over a one year

time period from May 2009 to June 2010. Two different strategies were used as mentioned

above and the study was done on 14 selected securities namely, BalrampurChini, DLF, ITC,

Reliance Capital, Suzlon Energy, JP Associates, Sesa Goa, Bhushan Steel, Infosys, Ansal

Properties, ICICI Bank, HUL, L&T and ONGC. Along with this the same study is also done

on Nifty futures. The study was conducted by plotting fifteen minute candlestick chart along

with the two EMAs simultaneously on Metastock.

48
 Findings

The following table illustrates the accuracy and the returns for the study over a period

of one year:

Analysis

In the first strategy, the returns were highest for Bhushan Steel at 100.23% followed

by Sesa Goa at 76.49% and DLF at 57.3%. On the other hand the lowest return was given by

Reliance Capital at 0.65% followed by ITC at 2.73% and ONGC at 4.98%.

49
 Study of Nifty Futures for a period of May 2009 to June 2010

With the same strategies, a similar study was conducted on one of India’s premier
Index futures, i.e., Nifty Futures. The following table shows the outcome of the study:

50
 With the first strategy, there was a benefit of about 400 points where as, with the
second strategy it was 173.8 points.

Conclusion of the study of both the trading strategies

With the study of 14 different scrips and an Index future on both the trading
strategies, it was observed that the first strategy was comparatively better than the second
strategy.

51
 For most of the scrips the returns were higher if trading is done with the first strategy.
The return for all the 14 scrips taken together comes to 430.94% and 254.44% taking the first
and the second strategies respectively. For Nifty futures also, the returns were higher with the
first trading strategy.

From the above study, it can be clearly concluded that the first strategy stands ahead
in comparison with the second.

Based on this conclusion, a further study is conducted for the futures contract of the
entire 50 scrips comprising Nifty.

Nifty Fifty Stock Futures analysis for a period of one year from May 2009 to
June 2010

After an in-depth study of both the trading strategies, it has already been concluded
that the first strategy stay ahead in comparison with the second one. Based on the outcome of
the previous study, another research is carried out with the futures contract of the 50 scrips
comprising the Nifty.

In this study, I have analyzed both the EMAs with double crossover method, i.e.,
when the 8 EMA crosses above the 34 EMA, a buy signal is generated. Conversely, when the
8 EMA crosses below the 34 EMA, a sell signal is generated. As these are future contracts, I
am considering both the long and short calls for the purpose of study, as this will enable the
readers to understand the returns in both the calls.

52
 Primary Data Analysis
ANALYSIS ON THE BASIS OF QUESTIONNAIRE

Que. 1. Do you invest in Equity Market?

[ ] Yes [ ] No

Particulars No. of Investors Percentage

Yes 119 68%
No 56 32%
Total 175 100%

Investing In Equity Market

150
119
100
56
50

0
Yes No

Investing In Equity Market

( In Percentage)
35% Ye
s
No

65%

INTERPRETATION

According to the above chart we can see that:

 68% of investors (119) are investing in Equity Market.

 While 36% of investors (56) are not investing in Equity Market.

53
Que. 2. If you want to invest, which investment option will provide the best returns?

[ ] Equity Share
[ ] IPO
[ ] Mutual Funds
[ ] Bonds
[ ] Fixed Deposits
[ ] If any other _________

Investment option Investors in Percentage

Equity Share 53%

IPO 18%
Mutual Funds 8%
Bonds 7%
Fixed Deposits 4%
Other 10%

Investors are investing in

various Investment option
(Investors in Percentage)
10%
4% Equity Share
7% IPO
Mutual Funds
8% Bonds
53%
Fixed Deposits
Other

18%

54
INTERPRETATION:

According to the previous chart:

 According to 53% of investors, Equity market will provide the best returns in
compare to other investment option.

 18% of investors believe that IPO (Primary Market) will provide the best returns.

 8% of investors think that Mutual Funds will provide the best returns.

 7% of investors believe that Bonds Market will provide the best returns.

 4% of investors trust that Fixed Deposits will provide the best returns.

 According to 10% of investors, other investment option will provide the best returns.

According to them other investment options are:

 Commodity Market
 Insurance
 Government Securities etc.

55
Que.3. Which factors motivate you for investing in Equity Market?

[ ] Return [ ] Liquidity [ ] Safety

[ ] Capital Appreciation [ ] Other _____________

Motivation Factors Investors in Percentage

Return 48%
Liquidity 25%
Safety 6%
Capital Appreciation 16%
Other 5%

Motivating factors for Investors to

invest in Equity Market
(Investors
16% in5%Percentage)
Return
6% 48% Liquidity
Safety
Capital
Appreciation
25% Other

INTERPRETATION:

According to the Previous Figure:

 48% of investors are motivated by Return to invest in Equity market.

 25% of investors are motivated by Liquidity to invest in Equity market.

 6% of investors are motivated by Safety to invest in Equity market.

 16% of investors are motivated by Capital Appreciation to invest in Equity

market.

 While 5% of investors are motivated by other factors like-Investment, Profit etc.

to invest in Equity market.

Que. 4. How much percentage of your income you invest in Equity Market?
56
 [ ] Less than 5% [ ] 5%-10% [ ] 10%-15%
[ ] 15%-20% [ ] 20%- 25% [ ] More than 25%

Percentage of Income Investors in Percentage

Less than 5% 23%
5%-10% 45%
10%-15% 17%
15%-20% 7%
20%- 25% 5%
More than 25% 3%

Percentage of income investors are investing

in Equity Market
(Investors in Percentage)
5% 3%
7% 23%
Less than 5%
5%-10%
17% 10%-15%
15%-20%
20%- 25%
More than
25%

45%

INTERPRETATION:

According to the Previous Figure:

 23% of the investors are investing Less than 5% of their income in Equity Market.
 45% of the investors are investing 5%-10% of their income in Equity Market.
 17% of the investors are investing 10%-15% of their income in Equity Market.
 7% of the investors are investing 15%- 20% of their income in Equity Market.
 5% of the investors are investing 20%-25% of their income in Equity Market.
 While 3% of the investors are investing More than 25% of their income in Equity
Market.

Que. 5. How do you trade in Equity Market?

57
 [ ] Intraday [ ] Delivery [ ] Speculation
[ ] Arbitragers [ ] Hedging
[ ] If any other please specify _____________

Types of Trade Investors in Percentage

Intraday 13%
Delivery 31%
Speculation 26%
Arbitragers 17%
Hedging 11%
Other 2%

Investors are Trade in

Equity Market
(Investors
2% 13%
in Percentage)
11%
Intraday
Delivery
Speculation
17%
Arbitragers
31% Hedging
Other

26%

INTERPRETATION:

According to the Previous Figure:

 13% of the investors are doing Intraday trading in Equity Market.

 “Intraday Trading is trading for that one day only. Means any securities are purchase

& sell “within the day.”

 31% of the investors are investing in Equity Market as a Delivery base Trading.

 “Delivery based trading is normally considered as a safer approach for trading in

shares when compared to day trading. Delivery based trading involves buying shares

58
 on a market day and selling them only after receiving the delivery of those shares in

demat account.”

 26% of the investors are trading in Equity Market as a Speculator.

 “Speculators are those classes of investors who willingly take higher-than-average

risk in return for a higher-than-average profit potential in future. Speculators aim

primarily at quick profit from a short-termacquisition of assets.”

 17% of the investors are Arbitragers in Equity Market.

 “Arbitrager means who purchases securities in one market for immediate resale in

another in the hope of profiting from the price differential”

 11% of the investors are trading in Equity Market as Hedgers.

 “Hedging means reducing or controlling risk. Hedgers wish to eliminate or reduce the

price risk to which they are already exposed.”

 While 2% of the investors are trade in Equity Market for Other Purpose.

59
Que.6. What is the time horizon for investing in Equity Market?
[ ] Less than 1 Months [ ] 1 to 3 Months [ ] 3 to 6 Months
[ ] 6 to 12 Months [ ] More than 12 Months

Time Horizon Investors in Percentage

Less than 1 Months 14%
1 to 3 Months 28%
3 to 6 Months 15%
6 to 12 Months 18%
More than 12 Months 25%

Investors Time Horizon for investing

in Equity Market
(Investors
30%
in Percentage)
28%
25%
25%
20% 18%
14% 15%
15%
10%
5%
0%
Less than 1 1 to 3 Months 3 to 6 Months 6 to 12 Months More than 12
Months Months

INTERPRETATION:

According to the Previous Figure:

 14% of investors invest in Equity market for Less than 1 Months.

 28% of investors invest in Equity market for the period of 1 to 3 Months.

 15% of investor’s time horizon for in Equity market is 3 to 6 Months.

 18% of investor’s time horizon for in Equity market is 6 to 12 Months.

 25% of investors invest in Equity market for more than 12 Months.

60
Que.7. What is the rate of return expected by you from Equity Market in a year?

[ ] 5% – 10 % [ ] 10% – 15 % [ ] 15% – 20%

[ ] 20% – 25% [ ] 25% –30% [ ] 30% and above

Rate of Return Investors in Percentage

5% – 10 % 12%
10% – 15 % 18%
15% – 20% 32%
20% – 25% 26%
25% –30% 8%
30% and above 4%

Rate of Return

8% 4% 12%
5% – 10 %
10% – 15 %
18%
15% – 20%
26%
20% – 25%
25% –30%
30% and above
32%

INTERPRETATION:

According to the above Figure:

 12% of investors are expects 5%-10% return from Equity market.

 18% of investors are expects 10%-15% return from Equity market.
 32% of investors are expects 15%-20% return from Equity market.
 26% of investors are expects 20%-25% return from Equity market.
 Here, above two cases investors are more expects from Equity market.
 8% of investors are expects 25%-30% return from Equity market.
 While 4% of investors are expects more than 30% return from Equity market.

61
Que.8. Are you satisfied with the current performance of the Equity Market in terms of
expected return?

[ ] Fully Satisfied [ ] Satisfied [ ] Neutral

[ ] Unsatisfied [ ] Fully Unsatisfied

Rate of Return No. of Investors Percentage

Fully Satisfied 30 17%

Satisfied 73 42%
Neutral 49 28%
Unsatisfied 18 10%
Fully Unsatisfied 5 3%
Total 175 100%

Investors satisfaction level From Equity Market

(Investors in Numers)(Total 175)
80 73
70
60
49
50
40
30
30
20 18
10 5
0
Fully Satisfied Neutral Unsatisfied Fully
Satisfied Unsatisfied

INTERPRETATION:

According to the Previous Figure:

 30 investors are Fully Satisfied from current performance of Equity market.

 73 investors are Satisfied from Equity market.
 49 investors are Neutral with current performance of Equity market.
 18 investors are Unsatisfied from Equity market.
 While 5 investors are Fully Unsatisfied from Equity market.

62
Que. 9. Who advise you to enter in Equity Market?
[ ] Friends [ ] Relatives [ ] Advisers
[ ] Media [ ] Research Report
[ ] Magazines [ ] If any other ___________

Particulars Investors in Percentage

Friends 28%
Relatives 12%
Advisers 25%
Media 17%
Research Report 10%
Magazines 5%
Other 3%

Investor's Referance for enter into

Equity Market
(Investors in Percentage)
5%3%
Friends
10% 28% Relatives
Advisers
Media
17% Research
Report
Magazines
12%
Other
25%

INTERPRETATION:

According to the Above Figure:

 Friends motivate 28% of the investors to enter into the equity market.
 Relatives motivate 12% of the investors to enter into the equity market.
 25% of investors enter in Equity market by the Advice of Financial Advisor.
 Media motivate 17% of the investors to enter into the equity market.
 Magazines motivate 10% of the investors to enter into the equity market.
 5% of investors are motivates by Reading Magazines to enter in Equity market.
 While other factors like self-Study, their own View etc. motivate 3% of the investors
to enter into the equity market.

63
Que.10. Which Factors do you consider most important while selecting the Sectors?
[ ] Market Trend [ ] Profitability [ ] Economic Condition
[ ] Industry Condition
[ ] Existence of well established Companies under Sectors
[ ] Government Policy [ ] If any other please specify _____________

Particulars Percentage
Market Trend 29%
Profitability 23%
Economic Condition 14%
Industry Condition 16%
Existence of well established Companies
12%
under Sectors
Government Policy 5%
Any Other 1%

Factors Consider by Investors while selecting sector

(Investors in Percentage)

Market Trend
1%
5%
12% Profitability
29% Economic Condition
Industry Condition
16%
Existence of well established
Companies under Sectors
14% 23% Government Policy
Any Other

INTERPRETATION:

According to the Previous Figure:

 29% of the investors have considered Market Trend as a most important factor while
selecting the Sector.
 23% of the investors have considered Profitability as a most important factor while
selecting the Sector.
 14% of the investors have considered Economic Condition as a most important factor
while selecting the Sector.
 16% of the investors have considered Industry Condition as a most important factor
while selecting the Sector.
 12% of the investors have considered Existence of well established Companies under
Sectors as a most important factor while selecting the Sector.
 5% of the investors have considered Government Policy as a important factor while
selecting the Sector.

64
Que. 11. Mention the most important factors for selecting a company of your choice.

[ ] Earning Per Share [ ] Dividend

[ ] Broker’s advice [ ] Market capitalization

[ ] Performance of company [ ] P.E. Ratio

[ ] If any other __________

Factors affect for Investors in

selecting company Percentage
Earning Per Share 19%
Dividend 17%
Broker’s advise 15%
Market capitalization 7%
Performance of company 16%
P.E. Ratio 24%
Other 2%

Factors affect to Investors for for selecting company

(Investors in Percentage)

2%
19%
24% Earning Per Share
Dividend
Broker’s advise
Market capitalization
17%
Performance of company
16% P.E. Ratio
Other
7% 15%

65
INTERPRETATION:

On the basis of above Figures:

 19% of the investors have considered Earning Per Share as a most important factor to

select a Company under the sector of their Choice.

 17% of the investors have considered Dividend as a most important factor to select a

Company under the sector of their Choice.

 While 15% of the investors are select a company under the sector of their choice on

the basis of Broker’s advises.

 7% of the investors have considered Market capitalization by the company as a

important factor to select a company under the sector.

 16% of the investors have considered as a Performance of company most important

factor to select a company under the sector of their choice.

 24% of the investors have considered Price Earning Ratio as a most important factor

select a company under the sector of their choice.

 At last 2% of the investors have considered Other Factors like Suggestion from

reference group, External advisors, Stakeholders, Growth of Company, Market Trend,

Profitability and their own view etc. to select a company under the sector.

66
CHAPTER - IV

67
 FINDINGS

 From the research I found out that 68% of investors (119) are investing in Equity

Market. While 36% of investors (56) are not investing in Equity Market as per my

sample size 100.

 I also found out that, 53% of investors believe that Equity Market is better investment

option and will provide the best returns in compare to other investment option.

 I found out that the 49% of investors who are dealing in equity market they are

motivated by return factor and 26% of investors are motivated by Liquidity and some

investor also consider capital appreciation and safety factor while investing in equity

market in various sectors.

 I also found out that the 45% of the investors are ready or interested to invest their

5%-10% of income in Equity Market. It means many investors trust on the growth of

equity market as they are ready to spend major proportion of their income.

 Going ahead I found out that very few investors want to deal in intraday trading

which shows that they consider safety factors while investing. 31% of the investors

are investing in Equity Market as a Delivery base Trading and 26% of the investors

are trading in Equity Market as a Speculator. Means 26% of investors who willingly

take higher-than-average risk in return for a higher-than-average profit potential.

 28% of investors invest in Equity market for the period of 1 to 3 Months and the same

proportion of investors are invest for long period more than year.

 I also found out that 32% of investors are expects 15%-20% return from Equity

market and 26% of investors are expects 20%-25% return from Equity market. Here,

investors are more expects from Equity market.

68
CHAPTER - V

69
 CONCLUSIONS

A study has been made which shows the relationship between different economic

variablesand the market variables and the interrelationship between them. Thus it has been

observedthat there is not a single factor that affects the movement in the stock market but a

numberof variables like GDP, P/E, etc. influence a market to a great extent. Any investor

before makingan investment should analyze the general economic conditions prevailing in

the economy andshould make a suitable framework for investment decisions. In the

Maslow’s hierarchy welearnt that before a company goes for overseas expansion it tries to

study in which state ofMaslow’s hierarchy the desired country(India) is in. This makes the

prediction of the variousvariables accurate to some extent.

Along with the fundamental analysis mentioned above an educated investor would

alwaysemphasize the importance of technical analysis as a tool to maximize profits and

minimizerisk. It is a common view of experts that fundamental or technical analysis by itself

are strongindicators to use before investing, however, an educated investor should always use

technicaland fundamental analysis in tandem before making an investment. This would give

theinvestor a holistic view and hence a more informed view of the investment.

70
CHAPTER - VI

71
 SUGGESSTIONS

 From my research, I found that only 68% of investors are investing in equity market,

so more focus should on 32% of investors who are not investing in equity market.

 Broking firms or companies should promote Equity investment aggressively for long

term investment purpose.

 Majority of investors (53%) are investing secondary market (equity market) and very

few (18%) investors are investing in Primary Market. So, here broking firm should

promote to their client for investing in Primary Market also.

 Company should have to concentrate on those people who are not investing in Equity

Market because of High risk than convert them in investing other security like-Mutual

Fund, Bonds, and Insurance etc. which also provides moderate return.

 The Stock Broking firm should also provide better services to the investor to increase

the satisfaction level of the investors.

 Company should focus on students also because equity market has risk and the

younger generation likes to take risk.

 Majority investors are investing in Oil & gas sector and IT sector.So, Company

should also suggest to investors for investing other sector which is also profitable.

72
CHAPTER - VII

73
 7.1 SUMMARY

This report brings you a sample of key details from the capital markets and some

macroeconomic variables that are related to it. This report primarily focuses on the Indian

Capital market with more impetus given on key ratios governing the same. An analysis of

stock market capitalization to GDP ratio is done to find out the historical valuation of Indian

stock market and their present valuation. To further corroborate the findings, an analysis of

Sensex PE ratio is also done.

A study has been done to find out the correlation between the two biggest stock

market of India, i.e., Sensex and Nifty. This report also focuses on the general economic

situation in India, and its relation to the Maslow’s hierarchy of needs.

Along with the fundamental analysis, this report also shows the importance of

technical analysis and its key indicators. There are more than 100 tools and indicators that are

used in technical analysis but I have focused mainly on moving average, moving average

convergence divergence (MACD), relative strength index (RSI) and William’s % R.

Finally the report throws light on the importance of candlesticks as a tool for delivery

trading. Acomparison between two different trading strategies is done to find out which one

is more profitable over a one year period.Based on that a candlestick chart analysis of Nifty

50 stock futures is done using hourly data .

74
 7.2 BIBLIOGRAPHY

MAGAZINES:

1. India today

2. Outlook

3. Business

WEBLIOGRAPHY

1. Indian share market (2011), retrieved September (2011),

http://business.mapsofindia.com/india-market/share.html

2. Bombay stock exchange (2011), retrieved September (2011),

http://en.wikipedia.org/wiki/Bombay_Stock_Exchange

3. Stock exchange of India (2011), retrieved (2011),

http://en.wikipedia.org/wiki/National_Stock_Exchange_of_India

75
 QUESTIONNAIRE

Name : …………………………………………………………………………………

Address : ……………………………………………………………………………….

Age ……………….Contact No. …………….. Email ID : ………………………….

1. If you want to invest, which investment option will provide the best returns?

[ ] Equity Share [ ] IPO [ ] Mutual Funds

[ ] Bonds [ ] Fixed Deposits [ ] If any other _________

2. How much appreciation do your expect in your investments?

[ ]Up to 15% [ ]15%-25% [ ]Safety 25% -35%

[ ]More than 35%

3. What is the preference of mutual fund?

[ ] Equity [ ] Income [ ] Money Market Funds

[ ] Balance Fund

4. Which type of investor you are?

[ ] Aggressive [ ] Moderate [ ] Conservative

5. Which medium do you prefer?

[ ] Off line (broker) [ ] Online

6. Which factors motive you investing in Equity Market?

[ ] Return [ ] Liquidity [ ] Safety

[ ] Capital Appreciation [ ] If any other please specify _____________

7. How much percentage of your income you invest in Equity Market?

[ ] Less than 5% [ ] 5%-10% [ ] 10%-15%

[ ] 15%-20% [ ] 20%- 25% [ ] More than 25%

76
8. How do you trade in Equity Market?

[ ] Intraday [ ] Delivery [ ] Speculation [ ] Arbitragers

[ ] Hedging [ ] If any other please specify _____________

9. What is the time horizon for investing in Equity Market?

[ ] Less than 1 Months [ ] 1 to 3 Months [ ] 3 to 6 Months

[ ] 6 to 12 Months [ ] More than 12 Months

10. What is the rate of return expected by you from Equity Market in a year?

[ ] 5% – 10 % [ ] 10% – 15 % [ ] 15% – 20%

[ ] 20% – 25% [ ] 25% –30% [ ] 30% above

11. Are you satisfied with the current performance of the Equity Market in terms of
expected return?

[ ] Fully Satisfied [ ] Satisfied [ ] Neutral

[ ] Unsatisfied [ ] Fully Unsatisfied

12. Who advise you to enter in Equity Market?

[ ] Friends [ ] Relatives [ ] Advisers [ ] Media

[ ] Research Report [ ] Magazines [ ] If any other ___________

13. Which Factors do you consider most important while selecting the Sectors?

[ ] Market Trend [ ] Profitability [ ] Economic Condition

[ ] Industry Condition [ ] well established Companies under Sectors
[ ] Government Policy [ ] If any other please specify _____________

14. Which Sector do you prefer the most? (Give 1 to 5 Orders in given boxes)

Oil & Gas Sector Infrastructure Sector

Banking Sector Automobile Sector

IT Sector If any other please specify _____________

77
 15. Mention the most important factors for selecting a company of your choice.
[ ] Earning Per Share [ ] Dividend [ ] Broker’s advise
[ ] Market capitalization [ ] Performance of company
[ ] P.E. Ratio [ ] If any other _____________

If any Suggestion from your side ,then please specify.

______________________________________________________________

______________________________________________________________

______________________________________________________________

78