STOCK MARKET
1.) INTRODUCTION: What Is the Stock Market, What Does It Do, and How Does It
Work? (investopedia.com)
The term stock market refers to several exchanges in which shares of publicly held
companies are bought and sold. Such financial activities are conducted through formal
exchanges and via over-the-counter (OTC) marketplaces that operate under a defined set of
regulations.
Both “stock market” and “stock exchange” are often used interchangeably. Traders in the
stock market buy or sell shares on one or more of the stock exchanges that are part of the
overall stock market.
The leading Indian stock exchanges include the National Stock Exchange(NSE) and Bombay
Stock Exchange(BSE).
The stock market allows buyers and sellers of securities to meet, interact, and transact. The
markets allow for price discovery for shares of corporations and serve as a barometer for the
overall economy. Buyers and sellers are assured of a fair price, high degree of liquidity, and
transparency as market participants compete in the open market.
The first stock market was the London Stock Exchange which began in a coffeehouse, where
traders met to exchange shares, in 1773. The first stock exchange in the United States began
in Philadelphia in 1790.
The Buttonwood Agreement, so named because it was signed under a buttonwood tree,
marked the beginning of New York’s Wall Street in 1792. The agreement was signed by 24
traders and was the first American organization of its kind to trade in securities. The traders
renamed their venture the New York Stock and Exchange Board in 1817.
A stock market is a regulated and controlled environment. In India the stock market was
regulated and controlled by a regulatory body known as Securities and Exchange Board of
India (SEBI).
The earliest stock markets issued and dealt in paper-based physical share certificates. Today,
stock markets operate electronically.
2.) HISTORY OF STOCK MARKET: History of The Stock Market - From
The Beginning To Present Time (bebusinessed.com)
S tock markets are some of the most important parts of today’s global
economy. Countries around the world depend on stock markets for economic
growth.
However, stock markets are a relatively new phenomenon. They haven’t
always played an important role in global economics. Today, I’m going to
share the history of the stock market and explain why stock markets have
become the driving economic force they are today.
Early stock and commodity markets:
The first genuine stock markets didn’t arrive until the 1500s. However, there
were plenty of early examples of markets which were similar to stock
markets.
In the 1100s, for example, France had a system where courretiers de change
managed agricultural debts throughout the country on behalf of banks. This
can be seen as the first major example of brokerage because the men
effectively traded debts.
Later on, the merchants of Venice were credited with trading government
securities as earl y as the 13th century. Soon after, bankers in the nearby
Italian cities of Pisa, Verona, Genoa, and Florence also began trading
government securities.
The world’s first stock markets (without stocks);
The world’s first stock markets are generally linked back to Belgium. Bruges,
Flanders, Ghent, and Rotterdam in the Netherlands all hosted their own
“stock” market systems in the 1400s and 1500s.
However, it’s generally accepted that Antwerp had the world’s first stock
market system. Antwerp was the commercial center of Belgium and it was
home to the influential Van der Beurze family. As a result, early stock
markets were typically called Beurzen.
All of these early stock markets had one thing missing: stocks. Although the
infrastructure and institutions resembled today’s stock markets, nobody was
actually trading shares of a company. Instead, the markets dealt with the
affairs of government, businesses, and individual debt. The system and
organization was similar, although the actual properties being traded were
different.
The world’s first publically traded company;
The East India Company is widely recognized as the world’s first publically
traded company. There was one simple reason why the East India Company
became the first publically traded company: risk.
Selling stocks in coffee shops
Before investors yelled across trade floors and threw order forms into the air,
they conducted business in coffee shops. Early stocks were handwritten on
sheets of paper, and investors traded these stocks with other investors in
coffee shops.
In other words, coffee shops were the first real stock markets due to the fact
that investors would visit these markets to buy and sell stocks. Before long,
somebody realized that the entire business world would be more efficient if
somebody made a dedicated marketplace where businessmen could trade
stocks without having to order a coffee or yell across a crowded café.
The first stock exchange;
Despite the ban on issuing shares, the London Stock Exchange was officially
formed in 1801. Since companies were not allowed to issue shares until
1825, this was an extremely limited exchange. This prevented the London
Stock Exchange from preventing a true global superpower.
That’s why the creation of the New York Stock Exchange (NYSE) in 1817
was such an important moment in history.
The NYSE has traded stocks since its very first day. Contrary to what some
may think, the NYSE wasn’t the first stock exchange in the United States.
The Philadelphia Stock Exchange holds that title. However, the NYSE soon
became the most powerful stock exchange in the country due to the lack of
any type of domestic competition and its positioning at the center of U.S.
trade and economics in New York.
The London Stock Exchange was the main stock market for Europe, while
the New York Stock Exchange was the main exchange for America and the
world.
Bombay Stock Exchange:
(Bombay Stock Exchange - Wikipedia)
BSE Limited, also known as the Bombay Stock Exchange (BSE), is an Indian stock
exchange and is the leading stock exchange under the ownership of Ministry of
Finance, Government of India. It is located on Dalal Street in Mumbai. Established in 1875 by
cotton merchant Premchand Roychand, a Jain businessman,[5] it is the oldest stock exchange
in Asia,[6] and also the tenth oldest in the world.[7] The BSE is the 8th largest stock exchange with
an overall market capitalisation in the world with more than ₹276.713 lakh crore, as of January
2022.
Bombay Stock Exchange was started by Premchand Roychand in 1875.[21] While BSE Limited is
now synonymous with Dalal Street, it was not always so. In the 1850s, five stock brokers
gathered together under a Banyan tree in front of Mumbai Town Hall, where Horniman Circle is
now situated.[22] A decade later, the brokers moved their location to another leafy setting, this time
under banyan trees at the junction of Meadows Street and what was then called Esplanade
Road, now Mahatma Gandhi Road. With a rapid increase in the number of brokers, they had to
shift places repeatedly. At last, in 1874, the brokers found a permanent location, the one that
they could call their own. The brokers group became an official organization known as "The
Native Share & Stock Brokers Association" in 1875. [23]
The Bombay Stock Exchange continued to operate out of a building near the Town Hall until
1928. The present site near Horniman Circle was acquired by the exchange in 1928, and a
building was constructed and occupied in 1930. The street on which the site is located came to
be called Dalal Street in Hindi (meaning "Broker Street") due to the location of the exchange.
On 31 August 1957, the BSE became the first stock exchange to be recognized by the Indian
Government under the Securities Contracts Regulation Act. Construction of the present building,
the Phiroze Jeejeebhoy Towers at Dalal Street, Fort area, began in the late 1970s and was
completed and occupied by the BSE in 1980. Initially named the BSE Towers, the name of the
building was changed soon after occupation, in memory of Sir Phiroze Jamshedji Jeejeebhoy,
chairman of the BSE since 1966, following his death.
In 1986, the BSE developed the S&P BSE SENSEX index, giving the BSE a means to measure
the overall performance of the exchange. In 2000, the BSE used this index to open its derivatives
market, trading S&P BSE SENSEX futures contracts. The development of S&P BSE SENSEX
options along with equity derivatives followed in 2001 and 2002, expanding the BSE's trading
platform.
BSE was demutualized and corporatized on 19 May 2007, pursuant to the BSE (Corporatization
and Demutualization) Scheme, 2005 notified by SEBI. It was listed on NSE on 3 February 2017.
In 1995, the BSE switched from an open-floor to an electronic trading system. There are more
than a dozen electronic exchanges in the U.S. alone with the New York Stock Exchange (NYSE)
and Nasdaq being the most widely known.
Today, electronic trading systems dominate the financial industry overall, offering fewer errors,
faster execution, and better efficiency than traditional open-outcry trading systems. Securities
that the BSE lists include stocks, stock futures, stock options, index futures, index options, and
weekly options.
The BSE's overall performance is measured by the Sensex, a benchmark index of 30 of the
BSE's largest and most actively traded stocks covering 12 sectors. Debuting in 1986, the Sensex
is India's oldest stock index. Also called the "BSE 30," the index broadly represents the
composition of India's entire market.
NATIONAL STOCK EXCHANGE:
NSE - National Stock Exchange of India Ltd: Live Share/Stock Market News & Updates, Quotes-
Nseindia.com
National Stock Exchange of India Limited (NSE) is the leading stock exchange under
the ownership of various group of domestic and global financial institutions, public and privately
owned entities and individuals. It is located in Mumbai, Maharashtra. It is the world’s
largest derivatives exchange in 2021 by number of contracts traded based on the statistics
maintained by Futures Industry Association (FIA), a derivatives trade body. NSE is ranked 4th in
the world in cash equities by number of trades as per the statistics maintained by the World
Federation of Exchanges (WFE) for the calendar year 2021. It is under the ownership of some
leading financial institutions, banks, and insurance companies.
NSE was established in 1992 as the first dematerialized electronic exchange in the country. NSE
was the first exchange in the country to provide a modern, fully automated screen-based
electronic trading system that offered easy trading facilities to investors spread across the length
and breadth of the country. Ashishkumar Chauhan is the Managing Director and Chief Executive
Officer of NSE. The Indian stock exchange BSE and NSE has been engulfed in series of
corruption scandals such as 1992 Indian stock market scam and others.
National Stock Exchange has a total market capitalization of more than US$3.4 trillion, making
it the world's 9th-largest stock exchange as of August 2021.[2] NSE's flagship index, the NIFTY
50, a 50 stock index is used extensively by investors in India and around the world as a
barometer of the Indian capital market. The NIFTY 50 index was launched in 1996 by NSE.
[11]
However, Vaidyanathan (2016) estimates that only about 4% of the Indian economy / GDP is
actually derived from the stock exchanges in India.
Trading schedule[edit]
Trading on the equities segment takes place on all days of the week (except Saturdays and
Sundays and holidays declared by the Exchange in advance). The market timings of the equities
segment are:
(1) Pre-open session:
o Order entry & modification Open: 09:00 hrs
o Order entry & modification Close: 09:08 hrs*
with random closure in last one minute. Pre-open order matching starts immediately after the
*
close of pre-open order entry.
(2) Regular trading session
o Normal/Retail Debt/Limited Physical Market Open: 09.15 hrs
o Normal/Retail Debt/Limited Physical Market Close: 15:30 hrs.
o Aftermarket hours: 16:00 – 09:00 hrs
How Does the Stock Market Work?
How Does the Stock Market Work in India? (groww.in)
TRADING PROCEDURE;
The Trading Procedure on a Stock Exchange – Explained! (yourarticlelibrary.com)
Indian STOCK Market Holidays;
Stock Market Holidays 2022: Share Market Holidays List (Trading Holidays) (indmoney.com)
Both NSE and BSE offer trading in several instruments such as equities,
equity derivatives, debt, interest rate futures, and more. When it comes to
stock market holidays and market trading timings, there is apparently no
difference between how both the stock exchanges operate. The market
holidays 2022 have been announced by NSE and BSE for the segments. The
Holiday Description Date Day stock
market
Republic Day 26 January, 2022 Wednesday
holidays
Mahashivratri 01 March, 2022 Tuesday 2022
include all
Holi 18 March, 2022 Friday
the holidays
Dr. Baba Saheb Ambedkar Jayanti/Mahavir Jayanti 14 April, 2022 Thursday on which
Good Friday 15 April, 2022 Friday the
exchanges
Eid-Ul-Fitr (Ramzan ID) 03 May, 2022 Tuesday
will remain
Muharram 09 August, 2022 Tuesday closed. As
per the
Independence Day 15 August, 2022 Monday
circulars
Ganesh Chaturthi 31 August, 2022 Wednesday
Dussehra 05 October, 2022 Wednesday
Diwali/Laxmi Puja 24 October, 2022 Monday
Diwali-Balipratipada 26 October, 2022 Wednesday
08 November,
Gurunanak Jayanti Tuesday
2022
issued by NSE and BSE, there are a total of 14 holidays except Saturdays
and Sundays.
The share market holiday list 2022 is here:
Indian Stock Market Holidays 2022- Equity and F&O
Trading holidays 2022 that fall on weekdays:
Trade holidays 2022 that fall on weekends:
Holiday Description Date Day
Ram Navami 10 April, 2022 Sunday
Maharashtra Day 01 May, 2022 Sunday
Bakra Eid 10 July, 2022 Sunday
Mahatma Gandhi Jayanti 02 October, 2022 Sunday
Christman 25 December, 2022 Sunday
SEBI;( SEBI | About SEBI)
DETEAILS ABOUT 25 COMPANIES:
