PROJECT REPORT

ON
Determinants affecting stock market operation a case study
SUBMITTED TO
UNIVERSITY OF MUMBAI
DEGREE OF BACHELOR OF MANAGEMENT STUDIES
FINANCE

BY
AALIYA KACHWA SHABIR

UNDER THE GUIDANCE OF

MS PAYAL VERMA
VIDYA VIKAS COLLEGE OF ARTS OF COMMERCE SCIENCE BMM,BMS
CHINCHOLI BANDAR ROAD, MALAD WEST MUMBAI, MAHARASHTRA
400064

ACADEMIC YEAR
2021-2022
“ DETERMINANTS AFFECTING STOCK MARKET OPERATION A CASE STUDY”

A Project submitted to

University of Mumbai for Partial Completion of the

Degree of Bachelor of Management Studies

( finance)

By
AALIYA KACHWA SHABIR

Under the Guidance of

Ms payal verma

VIDYA VIKAS COLLEGE OF ARTS OF COMMERCE SCIENCE BMM BMS

CHINCHOLI BANDAR ROAD, MALAD WEST MUMBAI, MAHARASHTRA 400064

ACADEMIC YEAR
2020-2021
 CERTIFICATE

This is to certify that Ms. Aaliya kachwa Shabir has worked and duly completed her Project
Work for the Degree of Bachelor of Management Studies under the Faculty of Commerce in the
subject of finance and Her project is entitled, “determinants affecting stock market operation
case study” under my supervision. I further certify that the entire work has been done by the
learner under my guidance and that no part of it Has been submitted previously for any Degree
or Diploma of any University. It is his own work and facts reported by her personal findings and
investigations.

Signature of Guiding Teacher:

Name: Ms payal verma

Date of submission:
 Declaration

I, the undersigned Ms. Aaliya kachwa shabir here by, declare that the work embodied in
this research Project titled “determinants affecting stock market operation a case
study”, forms my own contribution to the research Work carried out under the guidance
of “Prof Ms payal verma” is a result of my own research work and Has not been
previously submitted to any other university for any other Degree/Diploma to this or
any other University. Wherever reference has been made to previous work of others, it
has been clearly indicated as Such and included in the Bibliography. I hereby further
declare that all information of this document has Been obtained and presented in
accordance with academic rules and ethical conduct.

Signature of Student:___________________

Name: Aaliya kachwa shabir

Certified By:_______________

Name: Prof Ms payal verma

Acknowledgement
To list who all have helped me is difficult because there are numerous and the depth is
enormous.

I would like to acknowledge the following as being idealistic channels and fresh
dimensions in the

completion of this project.

I take this opportunity to thank the University of Mumbai for giving me chance to do this
project. I would

like to thank my Principal “Mr santosh yadav” for providing the necessary facilities
required for

completion of this project.

I take this opportunity to thank our Coordinator, “Prof Mr bhavesh kapuria ” for her
moral support and

guidance. I would also like to express my sincere gratitude towards my project guide
“Prof Ms payal verma “

guidance and care made the project successful.

I would also like to thank my college library, for having provided various reference books
and magazines

related to my project.

Lastly, I would like to thank each and every one who directly or indirectly helped me in
the completion of

the project especially my peers and my parents who supported me throughout my

project.
CONTENTS
LIST OF TABLES
LIST OF FIGURES
 CHAPTER ONE

INTRODUCTION

7
OUTLOOK ON INDIAN STOCK MARKET

The Indian stock market is one of Asia's oldest. 
Its origins may be traced back approximately 200 years. 
The earliest records of security transactions in India are sparse and difficult to find. 
The East India Company was the dominating institution at the time, and towards the end of the ei
ghteenth century, business in its loan securities was conducted.

Bombay was the centre of business for corporate stocks and shares in banks and cotton presses b
y the 1830s. 
Despite the fact that the trading list was expanded in 1839, banks and merchants only acknowled
ged a half-dozen brokers between 1840 and 1850. 
The 1850s saw a surge in commercial industry, and the brokerage business drew a large number 
of persons into the profession, with the number of brokers reaching a peak in 1860.
The American Civil War came out in 1860-61, and cotton exports from the United States to
Europe were halted; consequently, India’s ‘Share Mania’ began. The number of brokers has risen
to between 200 and 250.
The brokers who prospered after the American Civil War ended in 1874 chose a spot on a
roadway (now fittingly named Dalal Street) where they could congregate and transact business.
They formally created the “Native Share and Stock Brokers’ Association” in Bombay in 1887,
which is also known as “The Stock Exchange.” The Stock Exchange bought a building on the
same street in 1895 and opened in 1899. As a result, the Bombay Stock Exchange was
consolidated.
 National Stock Exchange (1.2)

With the liberalisation of the Indian economy, it became clear that bringing the Indian
stock market trading system up to international standards was a must. The National Stock
Exchange was established in 1992 by the Industrial Development Bank of India, the
Industrial Credit and Investment Corporation of India, the Industrial Finance Corporation
of India, all Insurance Corporations, selected commercial banks, and others, based on the
recommendations of the high-powered Pherwani Committee.

The National Stock Exchange (NSE) is India’s largest stock exchange, with branches in
several cities and villages throughout the country. The National Stock Exchange (NSE)
was founded by top financial institutions to provide a contemporary, fully automated
screen-based trading system with a national reach. The Exchange has achieved
unprecedented levels of openness, speed and efficiency, security, and market integrity. It
has been successful.set up facilities that serve as a model for the securities industry in
terms of systems, practices and procedures.

Demutualization of stock exchange governance, screen-based trading, compression of

settlement cycles, dematerialization and electronic transfer of securities, market of debt
and derivative instruments, and intensive use of information technology are just a few
examples of product and service innovations.

The NSE’s trading can be divided into two categories:

⚫Capital market

⚫Wholesale debt market

Institutions and corporate bodies engage in high-value transactions in financial instruments such
as government securities, treasury bills, public sector unit bonds, commercial paper, certificate of
deposit, and so on. Wholesale debt market operations are similar to money market operations
that they involve institutions and corporate bodies entering into high-value transactions in
financial instruments such as government securities, treasury bills, public sector unit bonds,
commercial paper, certificate of deposit, and so on.
A market where debt or equity securities are traded is referred to as a capital market.

In NSE, there are two types of players:

• Members who trade

• Those who take part

Trading members are recognised members of the NSE who trade on behalf of themselves and
their clients. Trading members and major players, such as banks, who take direct settlement
responsibilities, are among the participants.

The NSE trades using a fully automated screen-based trading method that follows the order-
driven market premise. Because trading members can stay in their offices and execute trades,
they can do so.

Compared to traditional trading exchanges, the NSE has a number of advantages. They are as
follows:
 The National Stock Exchange (.NSE) provides an integrated stock market trading
network across the country.

. Because inter-market activities are streamlined and the national system is in place, investors
may trade at the same price from anywhere in the country.

Access to the financial assets

• With the backing of a fully computerised network, delays in communication, late payments,
and other malpractices common in traditional trading mechanisms can be eliminated, resulting in
increased operational efficiency and informational transparency in stock market operations.

Nifty of the National Stock Exchange (NSE)

CNX S&P Nifty is a well-diversified 50-stock index that covers 22 economic sectors. It’s used
for a number of things, including benchmarking funds.

Portfolios, index-based derivatives, and index funds are all examples of index-based derivatives.
India Index Services and Products Ltd. (ISL), a joint venture between NSE and CRISIL, now
owns and manages the NSE. TISL is India’s first specialised corporation whose key product is
the index. Standard & Poor’s (S&P), a global leader in index services, has a consulting and
licence arrangement with IISL. CRISIL NSE Indices is abbreviated as CNX. The CNX ensures
that all indexes have the same branding to match the names of both the promoters, Le NSE and
CRISIL. As a result, the letter ‘C’ stands for CRISIL, while the letter ‘N’ represents for NEW.
1.3 The Bombay Stock Exchange (BSE) is a stock exchange in Mumbai, India.

One of Asia’s oldest stock markets is the Bombay Stock Exchange. In 1875, it was founded as
“The Native Share & Stock Brokers Association.” It was the country’s first stock exchange to be
granted permanent accreditation by the Government of India in 1956, under the Securities
Contracts (Regulation) Act, 1956. The Exchange’s essential and preeminent position in the
growth of the Indian capital market is well-known, and its index, the SENSEX, is extensively
followed throughout the world.

Modes:

SENSEX

The Stock Exchange, Mumbai (BSE) in 1986 came out with a stock index that
subsequently became the barometer of the Indian stock market.

SENSEX is not only scientifically designed but also based on globally accepted
construction and review methodology. First compiled in 1986, SENSEX is a basket of 30
constituent stocks representing a sample of large, liquid and representative companies.
The base year of SENSEX is 1978-79 and the base value is 100. The index is widely
reported in both domestic and international markets through print as well as electronic
media

The Index was initially calculated based on the “Full Market Capitalization”
methodology but was shifted to the free-float methodology with effect from September 1,
2003. The “Free-float Market Capitalization methodology of index construction is
regarded as an industry best practice globally. All major index providers like MSCI,
FTSE, STOXX, S&P and Dow Jones use the Free-float methodology.
 Due to is wide acceptance amongst the Indian investors; SENSEX is regarded to be the
pulse of the Indian stock market. As the oldest index in the country, it provides the time
series data over a fairly long period of time. Small wonder,

WHAT IS THE STOCK MARKET?

The stock market refers to a collection of exchanges and other venues where shares of
publicly traded firms can be bought, sold, and issued. Such financial transactions take
place on institutionalised official exchanges (whether physical or electronic) or over-the-
counter (OTC) markets that are governed by a set of rules.

A stock market is a marketplace where people can purchase and sell publicly traded company sh
ares or stocks. NSE and BSE are the two major stock exchanges in India.
To trade in the stock market, an individual must first open a trading account.
Retail investors, domestic institutions, and foreign institutional investors are examples of market 
players.SEBI regulates the Indian stock market.
Financial intermediaries include stock brokers, banks, and depository participants, among others.
DEMAT accounts, or dematerialized accounts, allow you to store shares in electronic form rather 
than physical certificates.
1.4 Purposes of the Stock Market –

The stock market provides two critical functions. The first is to provide financing to
businesses to help them fund and expand their operations. If a corporation issues one
million shares of stock at $10 each, the company will have $10 million in capital to build
its business (minus whatever fees the company pays for an investment bank to manage
the stock offering). The company avoids accruing debt and paying interest charges on
that debt by offering stock shares instead of borrowing the funds needed for expansion.

The stock market’s secondary aim is to allow investors – individuals who buy stocks – to
participate in the profits of publicly traded corporations. There are two ways for investors
to earn from stock purchases. Some equities pay out dividends on a regular basis (a given
amount of money per share of stock someone owns). Another strategy for investors to
profit from stock purchases is to sell them for a profit if the stock price rises above their
acquisition price. For example, if an investor purchases shares of a company’s stock at
$10 per share and the stock’s price climbs to $15 per share, the investor can sell their
shares and profit 50% on their investment.
1.5 Global stock market history

Stock exchanges did not start out as the highly sophisticated, real-time, global trading
platforms that they are today. It wasn’t until 1531 that Antwerp, Belgium, saw the first
institution that resembled a stock exchange. Brokers and lenders gathered there to “trade
in commercial, government, and even individual debt issues,” rather than buying and
selling shares of businesses (which did not yet exist).

When Britain, France, and the Netherlands all chartered trips to the East Indies in the
1600s, this changed. Because few explorers could afford to go on an overseas trading
journey, limited liability corporations (or LLCs) were founded to raise funds from
investors who earned a percentage of the earnings in proportion to their investment.Risk
management also needed this type of corporate structure.

The first British journeys to the Indian Ocean were unsuccessful, resulting in lost ships
and creditors seizing the financier’s personal assets. In September of 1599, a group of
London merchants formed a corporation to limit each member’s responsibility to the
amount they individually invested. Nothing more than this amount could be lawfully
seized if the voyage failed.

In 1600, Queen Elizabeth granted the merchants a fifteen-year charter, naming their
company “Governor and Company of Merchants of London Trading with the East
Indies” (or simply “The East India Company”). The limited liability formula worked, and
by 1609, King James I had granted charters to numerous trading corporations, causing
commercial expansion in other ocean-bordering European countries.

Outside investors were allowed to buy shares in the Dutch East India Company for the
first time, entitling them to a fixed percentage of the company’s income. They were also
the first to sell stocks and bonds to the general public, doing so in 1602 through the
Amsterdam Stock Exchange.
Highs, lows, and trends in the past

The stock market’s history has seen many highs and lows, but it has tended to trend
upward throughout time as the world’s economy, population, and productivity have
grown. That isn’t to say there haven’t been some significant lows, such as the:

The Great Depression of the 1930s was a period of economic hardship.

2008-2020 Recession COVID-19 is in a downward spiral.

While it is difficult to assess the overall health of the stock market, a market index can be
used to track stock history and market health.

1.6 Characteristic of stock market

Gains And Losses

When you invest in the stock market, you are not guaranteed to make money. However,
unlike savings accounts, certificates of deposit, and other fixed-rate investments, there is
no limit to how much money you can make in the stock market. You make a profit when
you sell shares for more than you bought for it. You lose money if you sell it for less than
you paid for it. Either way, there be tax implications

Diversification

There is security in diversity, just as there is safety in numbers. Investing in the stock of
multiple companies could safeguard you. If the price of one company’s stock falls, rises
in other companies’ stocks may offset your overall loss or even improve your total return.
Mutual funds are popular among investors because they allow you to diversify your
portfolio by investing in multiple firms’ stocks. You can also diversify on your own by
purchasing shares in several firms.

Stock Categories

Stocks with similar characteristics are frequently targeted by mutual funds and investors.
According to the New York Stock Exchange’s Learning Center, income stocks pay
substantial dividends yet their values do not rise considerably. Blue-chip stocks are well-
established corporations with low dividends but stable stock values. Young companies
with little or no dividends pay growth stocks, which have a higher probability of 8-term
price rises – or losses. The values of cyclical equities, such as homebuilders and
automakers, vary in response to economic expansions and contractions. Defensive
equities, such as those in the food and beverage industry, on the other hand, preserve their
value throughout recessions.

Indicators
The number of shares traded, closing prices, change from prior prices, and 52-week highs
and lows are only a few of the more basic indicators of a stock’s performance. A standard
is the price-to-earnings ratio. If a share of stock sells for $50 and the business earns $5
per share, the P/E ratio is 10. If investors believe the ratio is low and the price is likely to
climb, they may buy. Alternatively, they may sell if they believe the price will shortly fall
and the ratio is too high.

Bulls And Bears

Is the proverbial glass of milk half-full or half-empty in your opinion? Your response
would reveal whether you were a bull or a bear. The stock market is expected to fall for
bears, while the stock market is expected to increase for bulls. A bear market, on the
other hand, is defined as a period in which prices consistently fall over time. Bull markets
are defined as long-term rises. Depending on whether you think the market will rise or
decline, you might purchase or sell stock.

Booms And Busts

It’s easy to come and easy to go. Occasionally, investors will drive the values of hot
stocks or industries, or even the market as a whole, to unsustainable highs. Then comes
the inevitable bust. Companies that profited from the adoption of the Internet in the late
1990s, for example, saw their stock values skyrocket. According to University of
Maryland academics, between 1997 and 2002, investors pumped $880 billion into the
telecommunications industry, only to see half of it evaporate in the next five years.
1.7 Types of stocks
Historically, one of the most essential paths to financial success has been through stock
market investing. As you begin to examine stocks, you’ll see that they’re frequently
mentioned in terms of several stock types and classifications.
Here are the major types of stocks you should know.

Common stock

Preferred stock

Large-cap stocks

Mid-cap stocks

Small-cap stocks

Domestic stock

International stocks

Growth stocks

Value stocks

IPO stocks

Dividend stocks

Non-dividend stocks

Income stocks

Cyclical stocks

Non-cyclical stocks

Safe stocks

ESG stocks

Blue chip stocks

Penny stocks
1.8 Procedure The steps in the stock exchange trading operation are as
follows:

I Broker selection: Before purchasing or selling shares, the first step is to choose a
registered broker who can help investors execute trade operations in secondary markets.
Individuals, corporations, and partnership firms can all act as brokers.

Individual investors must open a DEMAT or Dematerialised account with a depository.

Depository Participants (DP) act as agents or intermediaries between depositors and
investors. SEBI, banks, sub-brokers, and other DPs are examples.

(iii) Placing an order: After opening a demat account, investors can place an order by
stating the quantity of stocks and the company/script name at a target price, either
through a DP or personally via email, phone, or other means.

(iv) Putting the order into action: A broker places an order to buy or sell stocks. A
contract note is prepared by a broker that contains the name and price of securities, the
names of parties, and the brokerage or commission charged by them, as well as the
broker’s signature.

(v) Payment: Under either two or both forms of settlements, settlement is carried out in
cash or on a carry forward basis:

(a) On-the-spot settlement, which takes place on a T+2 basis, with T denoting the
transaction date and ‘2’ denoting the number of transactions.the length of time
(b) Forward settlement, which can take place at any time in the future, such as T4-5
or T+c
1.8 How does the performance of the stock market affect individual
businesses?
Individual firms in an economy are affected by the stock market in a variety of ways.
There are just under 4,000 publicly listed stocks in the United States that can be split into
11 worldwide industrial groupings (GICS) There might be a plethora of repercussions
with everyday moves throughout the board. The S&P 500 Index is frequently used by
experts as a barometer for overall market performance and, as such, as one of the most
influential drivers. We’ll look at two of the most fundamental effects on businesses:
Consumer expenditure and business activities are the first two.

Consumer Spending and the Stock Market

Consumers frequently spend more during bull markets because they benefit more
from the impacts of a robust economy and feel wealthier as their portfolios increase
in value. During bear markets, the economy normally does not perform as well as it
should, and spending falls. A drop in stock prices at the same time raises concerns
about the loss of wealth and purchasing power as the value of investments declines.

Business Operations and the Stock Market

The stock market’s changes can have a range of effects on businesses. The market
capitalization and thus the market worth of a firm are affected by the increase and
decrease of share prices. The higher a company’s stock price is, the more it is worth
in terms of market value, and vice versa. When evaluating mergers and/or
acquisitions that include stock as part of the deal, the market value of a firm can be
essential.
The Stock Market and the Economy
The stock market, which is defined as a market where equity shares of publicly traded
corporations are purchased and sold, estimates the total worth of all publicly traded
companies. The Wilshire 5000 can be used to reflect this in its entirety, although most
analysts and investors focus on the S&P 500. Both indices can be useful for determining
the general health of the economy, though stocks can be deceiving at times.

Historically, steep market declines preceded the Great Depression in the 1930s as well
as the Great Recession of 2007–2009. However, some market crashes, most
famously Black Monday in 1987, were not followed by recessions.
Modern Stock Trading – The Changing Face of Global Exchanges

For more than two centuries, the NYSE faced little competition domestically, and its expansion 
was powered primarily by an ever-expanding American economy. 
The London Stock Exchange (LSE) continued to dominate European stock trading, but the New 
York Stock Exchange (NYSE) attracted a growing number of significant corporations. 
Other large countries, such as France and Germany, later formed their own stock markets, albeit t
hese were mostly used as stepping stones for corporations seeking to list on the London Stock Ex
change or the New York Stock Exchange.

The NASDAQ, which became a favoured home for budding technology businesses and gained si
gnificant importance during the technology sector boom of the 1980s and 1990s, was one of man
y exchanges that saw stock trading expand in the late twentieth century. 
The NASDAQ was founded in the year 2000.

The first electronic trading exchange, which operated through a web of computers. Trading has
become more time and cost efficient as a result of electronic trading. The NYSE faced rising
competition from stock exchanges in Australia and Hong Kong, Asia's financial capital, in
addition to the advent of the NASDAQ. The NYSE has had little domestic competition for more
than two centuries, and its growth has been fueled primarily by an ever-expanding American
economy. Although the London Stock Exchange (LSE) continued to dominate European stock
trading, the New York Stock Exchange (NYSE) began to attract a rising number of major firms.
Other significant countries, such as France and Germany, eventually established their own stock
exchanges, albeit these were mostly used as stepping stones for companies wanting to list on the
New York Stock Exchange.

The first electronic trading exchange, which was run by a web of computers. Trading has
become more time- and cost-effective as a result of electronic trading. The NYSE faced
increased competition from stock exchanges in Australia and Hong Kong, Asia’s financial
capital, in addition to the rise of the NASDAQ. The NYSE has had little domestic competition
for more nearly two centuries, and its growth has been fueled primarily by a rising American
economy. Although the London Stock Exchange (LSE) continued to dominate European stock
trading, the New York Stock Exchange (NYSE) drew a growing number of major firms. Other
significant countries, such as France and Germany, eventually established their own stock
exchanges, albeit these were largely used as stepping stones for companies wanting to list on the
New York Stock Exchange.
  Overview of indiabuils

Indiabuils is India’s leading Financial and Real Estate Company with a wide presence
throughout India. Indiabulis Financial Services Limited was established in the year 2000 by three
promoters all of whom are engineers from Indian Institute of Technology, New Delhi, and has
attracted over Rs 700 million of investments from venture capital firms, private equity funds and
institutional investors

History

• Indiabulis Financial Services Limited began as Orbis Infotech Private Limited on January 10,
2000 in New Delhi.

On March 16, 2001, the company’s name was changed to Indiabuls Financial Services Private
Limited due to a shift in the company’s primary objectives from information technology to
investment and financial services. On February 27, 2004, it changed its name to Indiabulls
Financial Services Limited and became a public limited company.

Indiabulls has approximately 640 locations around the country. Indiabulls has about 4,50,000
customers who use a variety of financial services and products, including securities, derivatives
trading, depositary services, research and advisory services, consumer secured and unsecured
credit, loan against shares, and mortgage and housing finance. The company employs around
4000 Relationship managers who help the clients to satisfy their

Financial objectives that are unique With its group of enterprises, Indiabulls joined the real estate
market in 2005.

The National Stock Exchange, the Bombay Stock Exchange, and the Luxembourg Stock
Exchange all list Indiabulls Financial Services Ltd. Indiabulls has a market capitalization of
roughly USD 2500 million (29 December 2006). Since March 2000, Indiabulls and its group
firms have received USD 500 million in FDI in the form of equity capital. The world’s leading
financial institutions, including Fidelity Funds, Goldman Sachs, Merrill Lynch, Morgan Stanley,
and Farallon Capital, are among Indiabulls’ major owners.
Indiabulls is growing at a rate of 2.2 percent each year
Years 2000 and 2001:

Indiabulls Financial Services Ltd. Developed one of India’s first trading platforms with the help
of an in-house team.

Year 2001-03:

Indiabulls’ service offering was expanded to include IPO Financing/Distribution, Equity, F&O,
Wholesale Debt, Mutual Funds, and IPO Financing/Distribution Research.

Year 2003-04:

This was the first year that Indiabulls dabbled in distribution.

The year 2004-05

was one of the most significant in Indiabulls’ history. In the current year:

• Indiabulls launched its consumer finance business after its initial public offering (IPO) in
September 2004.

• Indiabulls was the first to enter the Indian real estate sector.

FDI in Indian real estate to be brought in by a corporation.

• Indiabulls has won bids for iconic Mumbai properties.

Year 2005-06: The world’s most prestigious investment institutions, such as Merrill Lynch and
Goldman Sachs,

Goldman Sachs has boosted its stake in Indiabulls. It also rose to the top of the securities
brokerage business, with a market share of roughly 31% in Online Trading. Farallon Capital, the
world’s largest hedge fund, and its affiliates have pledged Rs. 2000 million to Indiabuils
subsidiaries Viz. Indiabulls Credit Services Ltd. And Indiabulls Housing Finance Ltd. Are
subsidiaries of Indiabulls Credit Services Ltd. And Indiabulls Housing Finance Ltd., respectively
In the same year, the Steel Tycoon Mr. LN Mittal promoted LNM India Internet venture Ltd.
acquired 8.2% stake in Indiabulls Credit Services Ltd. Year 2006-07: In this year, Indiabulls
Financial Services Ltd. was included

2.5 Products and Services of Indiabulls

Indiabuils offer the following products and services in the financial markets:

Stocks

• Options and Futures

• Depository Services

• Commodities
• Insurance Products

Mutual Funds

• Bonds and Debt Product

2.4 Indiabulls' Organizational Structure

Indiabulls' organisational structure is functional, with various divisions. departments

Working Online: mostly providing services to clients via the Internet. Relationship aimed
towards dients who appreciate access to information at all times and from any location. And can
be serviced at a reasonable cost per unit.

Working Offline: serving clients largely through an office setting. It's a connection aimed at
people who enjoy physical contact.

Online & offline business consist of following departments

Administration
• Operations & Service quality
• Technology
Finance
• Corporate affairs
Human resources
Marketing
Corporate communications
. Legal

Financial products distribution: distribution of mutual funds and insurance

Products.

Indiabulls commodities Pvt ltd: deals with commodity brokerage business

Indiabuils Realities limited: is into development of Real estate and mining.

India bulls housing loans: is into mortgage of properties and housing loan
Factors affecting stock market

Most of us, today, have many goals and aspirations to achieve in life. And we take the necessary
steps to ensure that we reach those goals. Meticulous financial planning rewards us with
respectable dividends so that we can cross off one box after another from our list of dreams. One
of the many tenets of future financial planning is investment. To counter inflation and to build a
corpus, we invest our money in various financial elements with the idea that our investment will
grow gradually like a well-watered plant.

Supply and demand

If a firm is performing well and everyone wants to acquire shares, there will be a shortage of
shares, resulting in the stock price of the company skyrocketing. When there are too many shares
available but no one wants to acquire them, the situation is reversed. In that event, the stock price
will drop.

Company related factors

It is self-evident that if a firm has publicly traded shares, anything that occurs within the
company will have a direct impact on the share price. So, if the company is on the rise, with
successful product launches, more revenue, reduced debt, and more infusion of investor cash, the
stock price is likely to rise, because everyone wants to acquire shares of a company that is
growing.

Investor sentiment
Stock market values can also be influenced by the sentiments of individual investors. The way
people invest money has something to do with how the stock market performs. Stock prices will
rise if investors take more risks and invest more aggressively. Stock prices, on the other hand,
will fall if investors become more cautious, preferring safety over risk. In this regard, there are
two variables to consider:

Market is bullish:

A bullish market is one in which an investor is significantly more confident in taking risks and
investing aggressively. When more people are confident about investing, demand rises, resulting
in higher stock prices.

Market is bearish:
A bearish market is one in which the investor is concerned about taking risks and losing money,
and hence invests with less confidence and safety in mind. As a result, the market becomes
stagnant, and the stock a direct impact on stock prices

Rate of interest

The Reserve Bank of India (RBI) sets interest rates in India and changes them at regular intervals
to keep the economy stable. A higher interest rate, of course, means that businesses will have to
pay more for loans, resulting in lower profits.

Stock prices will fall as a result of this. Reduced interest rates, on the other hand, mean that the
corporation may now borrow money from banks for a much lower cost, allowing them to save
money and increase profits. In this instance, the stock price will rise.

The political

atmosphere of India is one of the most important elements affecting the stock market in the
country. If the political situation is bleak, with the government appearing weak, the threat of war
looming, or if public opinion of the current administration is negative, stock prices will fall.

Similarly, if the government looks to be powerful and has widespread popular support, the stock
market will do well. Furthermore, if the government has solid developmental plans, investors
will be more enthusiastic to invest, but a government with a weak developing agenda may lead to
a drop in stock values.

Current events

The stock market is also influenced by news and other current events. Any political unrest, civil
war or rioting, or terrorist attacks are all current events that affect the stock market. All of these
occurrences are likely to cause stock values to plummet and market volatility to increase.

Natural disasters

Natural disasters such as earthquakes and floods have a significant impact on stock market
prices. This occurs for a variety of reasons, including the loss of property and other possessions.
As a result, corporations suffer significant losses, resulting in a drop in stock values. The failure
of manufacture and transportation of goods has a negative impact on company sales. As a result,
stock prices are certain to decline when natural disasters strike.

Rates of exchange

One of the elements affecting share prices in India is the value of the Indian rupee in respect to
the dollar or other foreign currencies. A strong rupee indicates that our economy is expanding,
resulting in greater stock values. When it comes to the performance of our currency, however,
there are different consequences for different people.

When the value of the rupee rises, the price of Indian commodities abroad rises, resulting in
lower demand. Exporters suffer as a result, and their stock prices fall. Importers, on the other
hand, can buy items at lower prices, increasing their stock.

When the rupee falls in value, the stock prices of exporters rise and those of importers fall.

As a result, when compared to other types of investments, investing in the stock market can yield
the highest returns. It does, however, come with major hazards. Nobody can disagree, however,
that if these risks are evaluated, the yield will almost certainly match the risks. The factors listed
above have a direct impact on the stock market, and keeping an eye on them will help you decide
whether to purchase or sell stocks. When it comes to stock market investing, timing is
everything.

Key takeaways

Stock trading is the ideal strategy to maximise returns, establish a strong portfolio, and fulfil
your life goals if you’re an ambitious investor.

Stocks offer great returns, but they also carry a high level of risk.

Many factors influence the stock market, including political turmoil, interest rates, current
events, exchange rate movements, natural disasters, and much more.

These factors can affect your yields, but you can determine the optimal moment to buy or sell
equities if you have a thorough understanding of the market.

The secret to successful investing and making good returns is to time the stock market.