Report on

INDIAN STOCK MARKETS

Submitted to: -

Amity University, Jharkhand

In partial fulfillment of the requirements for the award of the degree of

BACHELORS OF BUSINESS ADMINISTRATION

By
ANKUR TULSYAN
Enrollment No.: - A36106418150
Under the guidance of:
MR.SIDDHARTH HALDAR SIR
AMITY BUSINESS SCHOOL

AMITY UNIVERSITY JHARKHAND RANCHI

SEPTEMBER 2021
 DECLARATION
I, ANKUR TULSYAN, student of Bachelors of Business Administration hereby declare that the
Project titled “Report on INDIAN STOCK MARKETS” which is submitted by me to
Department of Management, Amity Business School, Amity University Jharkhand, in partial
fulfillment of requirement for the award of degree of Bachelors of Business Administration, has
not been previously formed the basis for the award of any degree, diploma or other similar title
or recognition. I further declare that report is written by me and no part of report is copied from
source without being duly acknowledged. If it is found to be plagiarized beyond acceptable limit,
I owe the responsibility and action can be taken against me as per university Rules and
Regulations.

Amity University Jharkhand, Ranchi

Date:

Sign of the Student

ANKUR TULSYAN

Enrollment Number: A36106418150

1
 CERTIFICATE

On the basis of Project Report submitted by ANKUR TULSYAN, student of Bachelors of

Business Administration, I hereby certify that the Project Report INDIAN STOCK MARKETS”
which is submitted to Department of Management, Amity Business School, Amity University
Jharkhand in partial fulfillment of requirement for the award of the degree of Bachelors of
Business Administration is an original contribution with existing knowledge and faithful record
of work carried out by him/her under my guidance and supervision.

To the best of my knowledge this work has not been submitted in part or full for any Degree or
Diploma to this University or elsewhere.

Amity University, Ranchi

Date:

Signature of Guide (Internal)

Name of the Faculty: - MR.SIDDHARTH HALDAR SIR

Assistant Professor

Amity Business School Ranchi

Amity University Jharkhand, Ranchi

2
INDEX

1 Abstract 4

2 Acknowledgment 5
3 Objective 6
4 Research Methodology 7
5 Introduction 8-9
6 Stock exchanges in 10
India
7 Sector Indicators 11
8 Reasons to trade in 12
stock markets
9 Important jargons 13 - 14
10 Differnce between the 15
cap sizes of the
companies
11 Relation between 16
domestic and
international indices
12 Conclusion 17
13 References and 18
bibliography

3
ABSTRACT

The Indian stock market is considered to be one of the earliest in Asia, which is in
operation since 1875. However, it remained largely outside the global integration
process until 1991. A number of developing countries in association with the
International Finance Corporation and the World Bank took steps to establish and
revitalize their stock markets as an effective way of mobilizing and allocation of
funds. In line with the global trend, reform of the Indian stock market also started
with the establishment of Securities and Exchange Board of India (SEBI), although
it became more effective after the stock market scam in 1991. With the
establishment of SEBI and technological advancement Indian stock market has
now reached the global standard. The major indicators of stock market
development show that significant development has taken in the Indian stock
market during the post-reform period. This paper seeks to examine in this context
whether reform in the Indian stock market has led to integration with the developed
stock markets in the world. The study finds that contrary to general belief, Indian
stock market is not co-integrated with the developed market as yet. Of course,
some short-term impact does exist, although it is found to be unidirectional for
obvious reasons. That is to say, the developed stock markets, viz., USA, UK and
Hong Kong stock markets Granger cause the India stock market but not vice versa.
However, the study does not find any causality between the Japanese stock market
and Indian stock market. It is derived from the study that although some positive
steps have been taken up, which are responsible for the substantial improvement of
the Indian stock market, these are perhaps not sufficient enough to become a
matured one and hence not integrated with the developed stock markets so far.

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 ACKNOWLEDGMENT

As a part of our course curriculum, I had to make a project report on“INDIAN

STOCK MARKETS” I extend my heartiest thank to everybody who help me through

the successful completion of my project, which has been great source of learning
and experience for me.

I am also indebted to my teacher, my guide MR.SIDDHARTH HALDAR SIR .My

family and friends for their valuable support guidance in carrying out this study.

Student’s Signature- ANKUR TULSYAN

Name- ANKUR TULSYAN

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OBJECTIVE

· To know how the terms used in stock markets

· To know what preparations needs to be done before trading or investing

· encourage more people to invest in stock markets & to understand how stock
markets benefit us all

6
RESEARCH METHODOLOGY

Research methodology provides a systematic, planned approach to the research

project and ensures that all aspects of the research project are consistent with each
other. It is especially important that the research design and implementation be
consistent with the research purpose and objectives.

The research methodology chapter introduces overall research design of the study
which includes the methodology adopted for carrying out the research study and
various phases of this research

Source of Data:

Secondary Data – The secondary data for the base of the project is collected from
internet, journals, magazines, reports and newspapers. Research Method:
Descriptive Research

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INTRODUCTION

One of the most important national policy decisions during the late twentieth
century and forepart of this century has been the financial liberalization of equity
markets across the world. Equity market liberalization gives foreign investors the
opportunity to invest in domestic equity markets and domestic investors the right to
transact in foreign equity market. However, it is important to distinguish between
the concepts of liberalization and integration. For example, a country might pass a
law that seemingly drops all barriers to foreign participation in domestic capital
markets. This is liberalization, but it may not be an effective liberalization that
results in market integration. The main objective of this paper is to investigate the
issue of stock market integration in India in the light of financial liberalization.
Following the global trend financial liberalization has also started in India since
1992. Increasing globalisation of the world economy should obviously have an
impact on the behaviour of domestic stock markets (Cerny 2004). The relaxation of
all types of economic barriers and developments in information technologies are,
among others, expected to induce stronger stock market integration as opposed to
stock market fragmentation. As well-developed and large financial markets
contribute significantly to economic growth [see Arestis, Demetriades and Lunitel
(2001) and Beck, Levive and Loeysa (2000)], the development and integration of
Indian financial markets is of particular importance. Further, the nature and extent
of equity market integration is of importance for corporate managers as it
influences the cost of capital, and for investors as it influences international asset
allocation and diversification benefits (e.g. Sentana (2000)). Since the work of
Grubel (1968) on expounding the benefits from international portfolio
diversification, the relationship among national stock markets has been widely
studied. Hence the relationship among different stock markets has great influence
on investment because diversification theory assumes that prices of different stock
markets do not move together so that investors could buy shares in foreign as well
as 3 domestic markets and seek to reduce risk through global diversification. Under
this backdrop, it is worth examining whether Indian stock market has really
integrated with the world markets. The study finds that in the short run, while US,

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UK and Hong Kong stock markets Granger cause the Indian stock markets, the
Indian stock does not Granger cause the above markets which appears to be
plausible. However, the study finds that the Indian stock market (BSE Sensex) is
not cointegrated with the developed markets and hence not sensitive to the
dynamics in these markets in the long run. The rest of the paper is organized as
follows. As a prelude to our statistical investigation Section II explains the
liberalization measures adopted in the Indian stock markets since 1991 and the
development of the stock market, which has taken place so far. Section III presents
the survey of literature on stock market integration, Section IV discusses the data
and gives the methodology being employed, and Section V ends with the
concluding observations.

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STOCK EXCHANGES IN INDIA

Stock Exchange (also known as stock market or share market) is one of the main
integral part of capital market in India. It plays a vital role in growing industries
and commerce of a country which eventually affect the economy. It is well
organized market for purchase and sale of corporate and other securities which
facilitates companies to raise capital by pooling funds from different investors as
well as act as an investment intermediary for investors. Moreover, it ensures that
securities should be traded according to some pre defined rules and regulations.
London Stock Exchange is the oldest stock exchange in the world whereas
Bombay Stock Exchange is the oldest one in India. In India, there are 7 Stock
Exchanges out of which NSE and BSE are the two main indices. Most of the
trading in Indian Stock Market takes place on these two stock exchanges. Both the
exchanges follow the same trading hours, trading mechanism, settlement process
etc. At the last count, BSE comprises of 5800 listed firms whereas on the other
hand its rival NSE consists of 1659 listed firms. Interestingly, out of all the firms
listed on BSE, only around 500 firms constitutes more than 90 % of its market
capitalization. Bombay Stock Exchange (BSE) is the leading and fastest stock
exchange in India as well as in South Asia established in 1875. Bombay stock
exchange is the world's 11th largest stock market by market capitalization at $1.7
trillion as of 31 January 2015 (Monthly Reports, World Federation of Exchanges).
More than 5,000 companies are listed on BSE. The main index of Bombay stock
exchange is Sensex which comprises of 30 stocks. National Stock Exchange was
incorporated in 1992 as a tax paying company and was recognized as a stock
exchange in 1993 under the Securities Contracts (Regulation) Act 1956. NSE is the
12th largest stock exchange in the world with a market capitalization of more than
US$ 1.65 trillion as on 31 January 2015 (Monthly Reports, World Federation of
Exchanges). Moreover, it was the first exchange to provide fully automated screen
based electronic trading system. Nifty is the indices to measure overall
performance of the National Stock Exchange which comprises of 50 stock index.

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SECTOR INDICATORS

There are number of sectors or industries which are listed on National Stock
Exchange and Bombay Stock Exchange. In addition to this, an individual sector
comprises of number of companies. There are around 73 sectors listed on NSE and
BSE seperately. Some of the important sectors present on both the exchanges are as
follows:-

BANKING SECTOR

AUTOMOBILE SECTOR

INFORMATION TECHNOLOGY SECTOR

METAL SECTOR

REAL ESTATE SECTOR

FMCG SECTOR

MEDIA & ENTERTAINMENT SECTOR

PHARMACEUTICALS SECTOR

POWER SECTOR

PSU BANK SECTOR

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REASONS TO TRADE IN STOCK MARKETS

1. You do not need a lot of money to start making money, unlike buying property
and paying a monthly mortgage.

• 2. It requires very minimal time to trade - unlike building a conventional business

• 3. It’s ‘fast’ cash and allows for quick liquidation (You can convert it to cash
easily, unlike selling a property or a business).

• 4. It’s easy to learn how to profit from the stock market. But You need to have
your basics clear. Unless you do….you will be wasting your time and loosing
money. You need to be crystal clear of each and every aspect of Investments, stock
options, Stock Trading, Company, Shares, Dividend & Types of Shares,
Debentures, Securities, Mutual Funds, IPO, Futures & Options, What does the
Share Market consist of? Exchanges, Indices, SEBI , Analysis of Stocks – How to
check on what to buy?, Trading Terms (Limit Order, Stop Loss, Put, Call, Booking
Profit & Loss, Short & Long), Trading Options – Brokerage Houses etc.

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IMPORTANT JARGONS

BSE Sensitive Index or SENSEX

o Bull Market

o Bear Market

o Delivery

o Intraday

o Dematerialization

o Long Buy

o Short Selling

o Stop Loss

o Portfolio

o Tick Size

o Averaging

o Booking Profit or Loss

o Crash - Curciuts

o Right Issue

o Stock bonus

o Stock Split

SNP

CNX NIFTY 50

Nifty CNX 100

Nifty Junior

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Future Index

Future Contract

Margin Premium

Discount

Market lot

Roll over

Options

Call

Put

Long

Positions

Short

positions

Expiry

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DIFFERNCE BETWEEN THE CAP SIZES OF THE COMPANIES
The difference between large cap, mid cap and small cap firms is in terms of
market
capitalization. The market capitalization of a share is defined by the total paid up
shares of a
company multiplied by the current price. As prices keep changing, market
capitalization keeps
changing. Large-cap companies tend to be large in terms of their operations
and some
examples will be ABB Limited, ICICI Bank Ltd., and Maruti Suzuki Ltd.
Examples of mid-cap
companies would include MRF, Havells India, Berger Paints and Castrol. Some
names of
small-cap companies are Graphite India, KEC International, La Opala and Century
Plyboard.
The Sensex is a 30 company index of market capitalization; turnover etc. and these
are 30 large
companies which are traded on the Bombay Stock Exchange (BSE). Along with
NIFTY, the
index of the National Stock Exchange (NSE), the Sensex is an index of stock
market sentiment.
There are also various indices available like the Mid Cap Index, FMCG index etc.
Figure 3 gives the movement of the three indices over time. The Sensex, which
consists of 30
large companies, is shown in blue, the BSE Mid Cap index is shown in pink, and
the BSE
Small Cap Index is shown in red. In common parlance, some large companies are
termed as
blue-chip companies. Small-cap companies tend to be speculative stocks. The
figure shows that
there have been periods when the indices have converged, which is something
investors need to be wary of
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RELATION BETWEEN DOMESTIC AND INTERNATIONAL INDICES
One of the effects of globalization has been the financial integration of economies
around the
world. With advances in computing and communication technology, billions of
dollars move
across the globe at lightning speed every day. Besides direct investment, funds
move into stock
and debt markets, whenever there is an opportunity for gain. Portfolio formation
has moved
beyond financial assets, but into countries. Large fund houses diversify across
countries, and
then across financial assets. Thus, holding China or India in the portfolio is equally
talked
about, as having TCS and Hero Motoco shares in the portfolio. Fund houses not
only look at
company or asset class exposure, but also at country exposure. This has led to
financial co-
integration of stock markets and also led to volatility transmission. Figure 3
gives the
movement of various stock market indices across the world, along with India.
Observe that prior to the 2008 sub-prime crisis, all the indices worldwide
converged. After the
crisis, all the indices fell simultaneously indicating the integration and spillovers.
Lately, there
has also been some convergence, with the exception of Shanghai Composite
(green). Note the
fast convergence of Borsa Istanbul (brown) with the rest. Indian Sensex (blue) has
been up
there together with the rest. These co-movements also provide some insight into
the perception
of fund houses of these economies and the expected returns and risk

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CONCLUSION

India is one of the emerging economies, which have witnessed significant

development in the stock markets during the recent periods due to the liberalization
policy initiated by the government. It is generally believed that due to liberalization
policy and the consequent development of Indian stock markets, the latter might
have integrated with the developed markets. One may argue that due to this
integration, which appears to have taken place after liberalization, Indian stock
market will mainly be governed by a common factor as in the case of the
developed markets. However, our study does not support this view. Rather, it finds
that Indian stock market is not at all integrated with the world markets. Of course,
the study finds that baring Japan there is a unidirectional causality from the
developed market. Hence we may conclude that Indian stock market is not
influenced by other markets. Of course, some short-term sentiment in the world
market does have impact but this is short-lived. That means the pr-requisites,
which are required for long-run relationship has not been achieved by India so far.

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REFERENCES AND BIBLIOGRAPHY

1. Online Articles, reports, and Direct comments from the employees of google
2. Documentaries related to google
3. US Govt websites
4. Youtube videos
5. LinkedIn Google Employees

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