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STOCK MARKET OR EQUITY MARKET

Definition:-

A stock market or equity market is a public entity for the trading of company stock (shares) and derivatives at an agreed price; these are securities listed on a stock exchange as well as those only traded privately.

For examples____ The largest stock market in the United States, by market cap, is the New York Stock Exchange (NYSE). In Canada, the largest stock market is the Toronto Stock Exchange. Major European examples of stock exchanges include the Amsterdam Stock Exchange, London Stock Exchange, Paris Bourse, and the Deutsche Brse (Frankfurt Stock Exchange). In Africa, examples include Nigerian Stock Exchange, JSE Limited, etc. Asian examples include the Tokyo Stock Exchange, the Shanghai Stock Exchange, National stock exchange(NSE) and the Bombay Stock Exchange(BSE).

Contents of stock market :__


1 Trading 2 Market participants 3 History 4 Importance of stock market 4.1 Function and purpose 4.2 Relation of the stock market to the modern financial system 4.3 United States stock market returns 4.4 The behavior of the stock market 4.5 Irrational behavior 4.6 Crashes 5 Stock market index 6 Derivative instruments 7 Leveraged strategies 7.1 Short selling 7.2 Margin buying 8 New issuance 9 Investment strategies 10 Taxation

First of all, we will discuss Indian stock market(BSE & NSE). Then we will discuss USA, LONDON and other country stock market. Stock Exchange is crucial part of stock market. Indian stock Exchange is differenciate into two categories who is following___

(A) Bombay stock Exchange (BSE) (B) National stock Exchange (NSE) SENSEX is related to Bombay stock exchange (Madhu kanan, MD &CEO). SENSEX mean Sensitive index. Sensex is mainly depend on market value of product or services. Sensex is raise or fall down any time.If market value of product is low, then sensex point will be fall down. SENSEX-BSE is covered maximum 30 companies. So it called BSE-30. Nifty is also related to National stock exchange (NSE). Nifty is covered 50 companies , so it is called Nifty 50.`

BSE (Bombay Stock Exchange):-Established in 1875, the Bombay Stock Exchange is Asia's first stock exchange. In 12th century France the courratiers de change were concerned with managing and regulating the debts of agricultural communities on behalf of the banks. Because these men also traded with debts, they could be called the first brokers. A common misbelief is that in late 13th century Bruges commodity traders gathered inside the house of a man called Van der Beurze, and in 1309 they became the "Brugse Beurse", institutionalizing what had been, until then, an informal meeting, but actually, the family Van der Beurze had a building in Antwerp where those gatherings occurred;

the Van der Beurze had Antwerp, as most of the merchants of that period, as their primary place for trading. The idea quickly spread around Flanders and neighboring counties and "Beurzen" soon opened in Ghent and Amsterdam.

SENSEX and List of 30 companies


30 companies make up the most watched index in India the SENSEX (SENSitive IndEX). These are the largest capitalized companies. Name ACC Ambuja Cements Ltd Bajaj Auto BHEL Bharti Airtel Cipla Dr. Reddys Laboratories** Grasim Industries HDFC HDFC Bank Hindalco Industries Hindustan Lever Limited Sector Housing Related Housing Related Transport Equipments Capital Goods Telecom Healthcare Healthcare Diversified Finance Finance Metal, Metal Products & Mining FMCG

ICICI Bank Infosys ITC Limited Larsen & Toubro Mahindra & Mahindra Limited Maruti Udyog NTPC ONGC Ranbaxy Laboratories Reliance Communications Reliance Energy Reliance Industries Satyam Computer Services States Bank of India Tata Consultancy Services Tata Motors Tata Steel Wipro

Finance Information Technology FMCG Capital Goods & Construction. Transport Equipments Transport Equipments Power Oil & Gas Healthcare Telecom Power Oil & Gas Information Technology Banking & Finance Information Technology Transport Equipments Metal, Metal Products & Mining Information Technology

SENSEX
S&P CNX Nifty Index : Apr 28,2011 5,785.45 [48.45] Prev. Day Close: 5,833.90 Change: -0.83%

Last Change( Buy Sell Net High Low Update Trade Rs) Price Price Traded d d Quantit Price y 1,104. 1,104. 245088 1,115. 1,097. 28/4/ ACC -5.60 0.00 50 50 00 00 11 AMBUJAC 150.9 150.9 426480 154.9 149.8 28/4/ -0.05 0.00 EM 0 0 8 5 0 11 AXISBAN 1,333. 1,333. 212703 1,354. 1,324. 28/4/ -10.15 0.00 K 70 70 5 90 10 11 BAJAJ1,477. 1,477. 391248 1,495. 1,470. 28/4/ 3.25 0.00 AUTO 70 70 00 95 11 634.6 634.6 276310 637.0 627.0 28/4/ BPCL 3.20 0.00 5 5 0 0 11 BHARTIA 386.7 386.7 447896 389.8 382.2 28/4/ 1.60 0.00 RTL 5 5 5 5 5 11 1,990. 1,990. 195979 2,028. 1,975. 28/4/ BHEL -25.15 0.00 40 40 6 45 00 11 345.3 345.3 105016 348.3 339.5 28/4/ CAIRN -2.80 0.00 5 5 53 0 5 11 308.9 308.9 193046 319.9 304.6 28/4/ CIPLA -10.45 0.00 0 0 4 0 5 11 228.1 228.1 972061 236.7 226.1 28/4/ DLF -6.75 0.00 0 0 4 0 0 11 1,679. 1,679. 232920 1,689. 1,652. 28/4/ DRREDDY 13.00 0.00 35 35 00 00 11 475.2 107549 478.3 473.1 28/4/ GAIL -0.65 0.00 0.00 5 6 0 5 11 2,446. 2,446. 137666 2,499. 2,430. 28/4/ GRASIM -25.30 0.00 65 65 90 00 11 512.3 512.3 941168 523.9 510.0 28/4/ HCLTECH -3.75 0.00 0 0 0 5 11 HDFCBAN 2,337. 2,337. 133848 2,369. 2,330. 28/4/ -15.50 0.00 K 75 75 2 00 00 11 717.3 717.3 285218 723.1 707.0 28/4/ HDFC -4.75 0.00 5 5 4 0 0 11

Name

HEROHON 1,695. DA 45 HINDALC 219.0 O 5 HINDUNIL 279.3 VR 0 ICICIBAN 1,117. K 50 INFOSYST 2,929. CH 15 148.9 IDFC 5 191.8 ITC 5 JPASSOCI 95.30 AT JINDALST 678.7 EL 0 KOTAKBA 441.2 NK 5 1,660. LT 15 770.2 M&M 5 1,301. MARUTI 25 183.7 NTPC 0 317.7 ONGC 5 POWERGR 104.0 ID 5 1,201. PNB 60 RANBAX 453.7 Y 5 RELCAPIT 572.0

-46.95 0.00 -1.00 -4.20 10.65 -24.00 -3.20 -1.80 -1.70 -14.40 -16.75 -27.20 -0.15 -15.55 -1.75 6.35 -0.30 -19.55 -15.80 -10.00

1,695. 590224 1,757. 1,686. 45 25 25 219.0 620859 222.4 218.2 0.00 5 2 0 0 279.3 262809 284.5 278.3 0.00 0 8 0 5 1,117. 114931 1,127. 1,085. 0.00 50 80 95 00 2,929. 292741 2,958. 2,921. 0.00 15 3 00 00 148.9 614509 152.7 148.2 0.00 5 5 5 0 191.8 804500 194.8 191.0 0.00 5 5 0 5 119160 95.30 0.00 97.70 94.70 08 149919 694.0 675.5 0.00 0.00 9 0 0 441.2 850458 464.0 437.2 0.00 5 0 5 1,660. 133758 1,703. 1,652. 0.00 15 0 65 60 770.2 114146 774.6 760.6 0.00 5 3 5 0 1,301. 255730 1,325. 1,297. 0.00 25 30 00 183.7 152291 186.1 183.0 0.00 0 5 0 0 317.7 898135 319.3 312.1 0.00 5 9 0 5 104.0 290149 104.5 103.6 0.00 5 0 0 5 1,201. 235633 1,225. 1,195. 0.00 60 00 25 453.7 653980 471.4 451.5 0.00 5 0 0 0.00 572.0766397 586.6 570.1

28/4/ 11 28/4/ 11 28/4/ 11 28/4/ 11 28/4/ 11 28/4/ 11 28/4/ 11 28/4/ 11 28/4/ 11 28/4/ 11 28/4/ 11 28/4/ 11 28/4/ 11 28/4/ 11 28/4/ 11 28/4/ 11 28/4/ 11 28/4/ 11 28/4/

AL RCOM

0 99.60 -5.55 -13.70 -9.05 -0.35 -0.75 1.00 -54.70 -5.35 0.25 7.80 -21.95 -17.20 -4.45 -6.60 -4.50

RELIANC 972.4 E 0 658.1 RELINFRA 0 128.7 RPOWER 5 319.3 SESAGOA 5 858.3 SIEMENS 0 2,855. SBIN 75 161.8 SAIL 5 183.1 STER 0 SUNPHAR 450.3 MA 5 1,158. TCS 65 TATAMOT 1,232. ORS 30 TATAPOW 1,308. ER 75 TATASTE 613.4 EL 5 446.6 WIPRO 0

5 0 791047 104.9 99.60 0.00 99.20 0 0 972.4 816323 993.0 970.0 0.00 0 6 0 0 658.1 948323 673.8 648.5 0.00 0 0 0 128.7 259981 129.7 127.1 0.00 5 7 5 0 319.3 219594 324.0 317.3 0.00 5 4 0 0 858.3 242795 869.0 849.4 0.00 0 3 0 5 2,855. 189666 2,932. 2,845. 0.00 75 9 10 10 161.8 335782 168.7 161.1 0.00 5 0 0 5 183.1 882494 185.0 181.8 0.00 0 0 0 5 450.3 858439 452.1 440.7 0.00 5 5 5 1,158. 142309 1,183. 1,155. 0.00 65 7 50 60 1,232. 136643 1,258. 1,228. 0.00 30 0 25 05 1,308. 327734 1,320. 1,289. 0.00 75 00 05 613.4 291176 624.3 612.0 0.00 5 5 0 0 446.6 155858 454.8 445.0 0.00 0 0 0 0

11 28/4/ 11 28/4/ 11 28/4/ 11 28/4/ 11 28/4/ 11 28/4/ 11 28/4/ 11 28/4/ 11 28/4/ 11 28/4/ 11 28/4/ 11 28/4/ 11 28/4/ 11 28/4/ 11 28/4/ 11

NSE (National Stock Exchange):--

The National Stock Exchange (NSE), located in Bombay, is India's first debt market. It was set up in 1993 to encouragestock exchange reform through system modernization and competition. It opened for trading in mid-1994. It was recently accorded recognition as a stock exchange by the Department of Company Affairs. The instruments traded are, treasury bills, government security and bonds issued by public sector companies.

NIFTY:What Does Nifty 50 Mean? The 50 stocks that were most favored by institutional investors in the 1960s and 1970s. Companies in this group were usually characterized by consistent earnings growth and high P/E ratios.

Investopedia explains Nifty 50 The nifty-50 stocks got their notoriety in the bull markets of the 1960s and early 1970s. They became known as "one-decision" stocks because investors were told they could buy and hold forever. Examples of nifty-50 stocks included General Electric, Coca-Cola, and IBM. However, part of this list included companies that have been troubled in the last decade, such as Xerox and Polaroid.

List of NIFTY Stocks NIFTY 50 NIFTY Fifty Companies list :-NIFTY consists of 50 top stocks from different sectors of NSE. Below is the list by October 2010. 1. ABB Ltd : ELECTRICAL EQUIPMENT 2. ACC Ltd : CEMENT AND CEMENT PRODUCTS 3. Ambuja Cements Ltd : CEMENT AND CEMENT PRODUCTS 4. Axis Bank : Banks 5. BHEL : ELECTRICAL EQUIPMENT 6. Bharat Petroleum Corporation Ltd(BPCL) : REFINERIES 7. Bharti Airtel Ltd : TELECOMMUNICATION SERVICES 8. Cairn India Ltd : OIL EXPLORATION/PRODUCTION 9. Cipla Ltd : PHARMACEUTICALS 10. DLF Ltd : CONSTRUCTION 11. GAIL (India) Ltd : GAS 12. HCL Technologies Ltd : COMPUTERS SOFTWARE 13. HDFC Bank Ltd : BANKS 14. Hero Honda Motors Ltd : AUTOMOBILES 2 AND 3 WHEELERS 15. Hindalco Industries Ltd : ALUMINIUM 16. Hindustan Unilever Ltd : DIVERSIFIED 17. Housing Development Finance Corporation Ltd(HDFC) : FINANCE HOUSING 18. IDFC: Finance (Including NBFCs) 19. ITC Ltd : CIGARETTES 20. ICICI Bank Ltd : BANKS 21. Idea Cellular Ltd : TELECOMMUNICATION SERVICES 22. Infosys Technologies Ltd : COMPUTERS SOFTWARE 23. Jindal Steel: Iron and Steel 24. JP Associate: Construction & Engineering 25. Kotak Bank: Banks 26. Larsen & Toubro Ltd : ENGINEERING

27. Mahindra & Mahindra Ltd : AUTOMOBILES 4 WHEELERS 28. Maruti Suzuki India Ltd : AUTOMOBILES 4 WHEELERS 29. NTPC Ltd : POWER 30. Oil & Natural Gas Corporation Ltd(ONGC) : OIL EXPLORATION/PRODUCTION 31. Power Grid Corporation of India Ltd : POWER 32. Punjab National Bank : BANKS 33. Ranbaxy Laboratories Ltd : PHARMACEUTICALS 34. Reliance Communications Ltd : TELECOMMUNICATION SERVICES 35. Reliance Industries Ltd : REFINERIES 36. Reliance Infrastructure Ltd : POWER 37. Reliance Capital : Finance (including NBFCs) 38. Reliance Power Ltd : POWER 39. Siemens Ltd : ELECTRICAL EQUIPMENT 40. State Bank of India : BANKS 41. Steel Authority of India Ltd(SAIL): STEEL AND STEEL PRODUCT 42. Sterlite Industries (India) Ltd : METALS 43. Sun Pharmaceutical Industries Ltd : PHARMACEUTICALS 44. Suzlon Energy Ltd : ELECTRICAL EQUIPMENT 45. Tata Consultancy Services Ltd(TCS) : COMPUTERS SOFTWARE 46. Tata Motors Ltd : AUTOMOBILES 4 WHEELERS 47. Tata Power Co. Ltd : POWER 48. Tata Steel Ltd : STEEL AND STEEL PRODUCTS 49. Unitech Ltd : CONSTRUCTION 50. Wipro Ltd : COMPUTERS SOFTWARE

Nifty hovers around 5800; ICICI Bank most active:-Ambani Group, power and select metal companies' shares were witnessing selling pressure. Heavyweight Reliance Industries too was down at 14:24 hours.

However, ONGC was the leading gainer on Nifty, with gaining 2% as the company made two oil discoveries in Gujarat. Sun Pharma, Bharti, Bajaj Auto, Ambuja, Sterlite, BPCL, Maruti and M&M were other gainers. ICICI Bank was among top gainers, with rising 1% after fourth quarter numbers. Country's second largest lender has reported fourth quarter net profit of Rs 1,452 crore, a 44.5% growth. Net non-performing assets (NPAs) declined to 0.94% as against 1.87% on year-on-year basis. Net NPA was down by 37% at Rs 2,459 crore versus Rs 3,901 crore. ICICI Bank, Coal India, Exide Industries, Amrutanjan Healthcare, LIC Housing Finance, Reliance Industries, Infosys and SBI were the most active shares on exchanges.

Significance of NSE Notices and BSE Notices in Indian stock market :-Like any other stock exchanges, BSE and NSE also publish notices for its brokers, traders and investors. These notices provide vital information about the listed companies at the stock exchange that are crucial for taking investment decisions. From an investors point of view these notices are pivotal for determining investment strategies. Here we are presenting some of the most important notices that are significant for the investors. Annual General Meetings The annual general meeting is an important event of the company. It is at the annual general meeting where the company management meets the share holders and presents the details of the company. The let the investors know about the financial condition of the company, earning, profits, debts, assets and all other details that give a comprehensive picture about the company to the investors. Apart from that the future plans and strategies of the company and prospects of the company are also presented to the investors during the annual general meeting. It is mandatory for any listed company to hold annual general meeting and stock exchanges

notify the investors about the annual general meeting of the listed companies through the notices. Press Releases There are so many other information that the stock market shares with the investors. It may be some new rules and regulations coming into effect, or it may about the ACT or norm or it may be about the process of the stock exchange. In all these cases stock exchange authorities issue press release to inform the investors, brokers and all other persons related to the stock exchange. Stock Splits Information When the stock of the certain company gets split the details of the split is notified to the investors through the notices issued by the BSE and NSE authorities. Details about the split including the ratio of the split date of effect, value of the stocks all these are announced through the notice so that the investors can determine their strategy accordingly. Acquisition or sell of stocks Often there are acquisitions and takeovers of companies by other companies happen in industry. These events have a major impact over the stock prices of the concerned companies. The comprehensive details of these acquisitions, sell offs and takeovers are also notified through the BSE and NSE notices. Name or Symbol change Name of a particular stock and the respective symbol of the stock is very important for trading the stock at the stock market. For online trading of the stocks you need to know the symbol of the stock and at least the name of the stock properly. Now the name of the stock and symbol of the stock get changed for different reasons like takeover, merger, acquisitions and split in the company. Through the notices the stock exchange authorities notifies the investors about these changes in the name of the company so that they can do the trading without any hassle. Delisting Information From time to time some stocks get de-listed from the stock exchanges. There may be so many reasons for the delisting of the stocks. There may some problem with the company, the company may be bankrupt, or there may be violation of rules and regularities on part of the company. Sometime some malicious activities on part of the company management are the reason the company gets de-listed. Through the notices the BSE and NSE

authorities let the investors know about the de-listed companies so that they can stop investing in that company or think about other related companies and do the needful with the stocks of that company that they are holding.

CONTENT DESCRIBE:__ Trading:The London Stock Exchange. Participants in the stock market range from small individual stock investors to large hedge fund traders, who can be based anywhere. Their orders usually end up with a professional at a stock exchange, who executes the order. Some exchanges are physical locations where transactions are carried out on a trading floor, by a method known as open outcry. This type of auction is used in stock exchanges and commodity exchanges where traders may enter "verbal" bids and offers simultaneously. The other type of stock exchange is a virtual kind, composed of a network of computers where trades are made electronically via traders. Actual trades are based on an auction market model where a potential buyer bids a specific price for a stock and a potential seller asks a specific price for the stock. (Buying or selling at market means you will accept any ask price or bid price for the stock, respectively.) When the bid and ask prices match, a sale takes place, on a first-come-first-served basis if there are multiple bidders or askers at a given price. The purpose of a stock exchange is to facilitate the exchange of securities between buyers and sellers, thus providing a marketplace (virtual or real). The exchanges provide real-time trading information on the listed securities, facilitating price discovery.

The New York Stock Exchange(NYSE):__


The New York Stock Exchange is a physical exchange, also referred to as a listed exchange only stocks listed with the exchange may be traded. Orders enter by way of exchange members and flow down to a floor broker, who goes to the floor trading post specialist for that stock to trade the order. The specialist's job is to match buy and sell orders using open outcry. If a spread exists, no trade immediately takes placein this case the specialist should use his/her own resources (money or stock) to close the difference after his/her judged time. Once a trade has been made the details are reported on the "tape" and sent back to the brokerage firm, which then notifies the investor who placed the order. Although there is a significant amount of human contact in this process, computers play an important role, especially for so-called "program trading". The NASDAQ is a virtual listed exchange, where all of the trading is done over a computer network. The process is similar to the New York Stock Exchange. However, buyers and sellers are electronically matched. One or more NASDAQ market makers will always provide a bid and ask price at which they will always purchase or sell 'their' stock. The Paris Bourse, now part of Euronext, is an order-driven, electronic stock exchange. It was automated in the late 1980s. Prior to the 1980s, it consisted of an open outcry exchange. Stockbrokers met on the trading floor or the Palais Brongniart. In 1986, the CATS trading system was introduced, and the order matching process was fully automated. From time to time, active trading (especially in large blocks of securities) have moved away from the 'active' exchanges. Securities firms, led by UBS AG, Goldman Sachs Group Inc. and Credit Suisse Group, already steer 12 percent of U.S. security trades away from the exchanges to their internal systems. That share probably will increase to 18 percent by 2010 as more investment banks bypass the NYSE and NASDAQ and pair buyers and sellers of securities themselves, according to data compiled by Boston-based Aite Group LLC, a brokerage-industry consultant.

Now that computers have eliminated the need for trading floors like the Big Board's, the balance of power in equity markets is shifting. By bringing more orders in-house, where clients can move big blocks of stock anonymously, brokers pay the exchanges less in fees and capture a bigger share of the $11 billion a year that institutional investors pay in trading commissions as well as the surplus of the century had taken place.

Market participants:A few decades ago, worldwide, buyers and sellers were individual investors, such as wealthy businessmen, usually with long family histories to particular corporations. Over time, markets have become more "institutionalized"; buyers and sellers are largely institutions (e.g., pension funds, insurance companies, mutual funds, index funds, hedge funds, investor groups, banks and various other financial institutions). The rise of the institutional investor has brought with it some improvements in market operations. Thus, the government was responsible for "fixed" (and exorbitant) fees being markedly reduced for the 'small' investor, but only after the large institutions had managed to break the brokers' solid front on fees. However, corporate governance (at least in the West) has been very much adversely affected by the rise of (largely 'absentee') institutional 'owners'.

History :__
Bombay Stock Exchange (BSE): Established in 1875, the Bombay Stock Exchange is Asia's first stock exchange. In 12th century France the courratiers de change were concerned with managing and regulating the debts of agricultural communities on behalf of the banks. Because these men also traded with debts, they could be called the first brokers. A common misbelief is that in late

13th century Bruges commodity traders gathered inside the house of a man called Van der Beurze, and in 1309 they became the "Brugse Beurse", institutionalizing what had been, until then, an informal meeting, but actually, the family Van der Beurze had a building in Antwerp where those gatherings occurred; the Van der Beurze had Antwerp, as most of the merchants of that period, as their primary place for trading. The idea quickly spread around Flanders and neighboring counties and "Beurzen" soon opened in Ghent and Amsterdam. In the middle of the 13th century, Venetian bankers began to trade in government securities. In 1351 the Venetian government outlawed spreading rumors intended to lower the price of government funds. Bankers in Pisa, Verona, Genoa and Florence also began trading in government securities during the 14th century. This was only possible because these were independent city states not ruled by a duke but a council of influential citizens. Italian companies were also the first to issue shares. Companies in England and the Low Countries followed in the 16th century. The Dutch East India Company (founded in 1602) was the first joint-stock company to get a fixed capital stock and as a result, continuous trade in company stock emerged on the Amsterdam Exchange. Soon thereafter, a lively trade in various derivatives, among which options and repos, emerged on the Amsterdam market. Dutch traders also pioneered short selling - a practice which was banned by the Dutch authorities as early as 1610. There are now stock markets in virtually every developed and most developing economies, with the world's biggest market being in the United States, United Kingdom, Japan, India, China, Canada, Germany's (Frankfurt Stock Exchange), France, South Korea and the Netherlands.

Importance of stock market :__


(1)Function and purpose .

The stock market is one of the most important sources for companies to raise money. This allows businesses to be publicly traded, or raise additional financial capital for expansion by selling shares of ownership of the company in a public market. The liquidity that an exchange provides affords investors the ability to quickly and easily sell securities. This is an attractive feature of investing in stocks, compared to other less liquid investments such as real estate. (2.) Relation of the stock market to the modern financial system:The financial system in most western countries has undergone a remarkable transformation. One feature of this development is disintermediation. A portion of the funds involved in saving and financing, flows directly to the financial markets instead of being routed via the traditional bank lending and deposit operations. . (3.) United States stock market returns Years to Dec. 31, 2010 1 3 5 10 15 20 30 40 50 60 Average Annual Return % 15.1 1.3 5.1 3.7 9.1 10.9 11.3 10.5 10.0 10.8 Average Compounded Annual Return % 15.1 10.8 6.7 5.1 4.7 5.7 7.0 7.7 7.8 8.0

studies have shown a maror longer. Various explanations for such large and apparently non-random price movements have been promulgated. For instance, some research has shown that changes in estimated risk, and the use of certain strategies, such as stop-loss limits and Value at Risk limits, theoretically could cause financial markets to overreact. But the best explanation seems to be that the distribution of stock market prices is non-Gaussian (in which case EMH, in any of its current forms, would not be strictly applicable). Other research has shown that psychological factors may result in exaggerated stock price movements (contrary to EMH which assumes such behaviors 'cancel out'). Psychological research has demonstrated that people are predisposed to 'seeing' patterns, and often will perceive a pattern in what is, in fact, just noise. (Something like seeing familiar shapes in clouds or ink blots.) In the present context this means that a succession of good news items about a company may lead investors to overreact positively (unjustifiably driving the price up). A period of good returns also boosts the investor's self-confidence, reducing his (psychological) risk threshold. Another phenomenonalso from psychologythat works against an objective assessment is group thinking. As social animals, it is not easy to stick to an opinion that differs markedly from that of a majority of the group. An example with which one may be familiar is the reluctance to enter a restaurant that is empty; people generally prefer to have their opinion validated by those of others in the group. In one paper the authors draw an analogy with gambling. In normal times the market behaves like a game of roulette; the probabilities are known and largely independent of the investment decisions of the different players. In times of market stress, however, the game becomes more like poker (herding behavior takes over). The players now must give heavy weight to the psychology of other investors and how they are likely to react psychologically. The stock market, as with any other business, is quite unforgiving of amateurs. Inexperienced investors rarely get the assistance and support they need. In the period running up to the 1987 crash, less than 1 percent of the analyst's recommendations had been to sell (and even during the 20002002 bear market, the average did not rise above 5 %%). In the run up to 2000, the media amplified the general euphoria, with reports of rapidly rising share prices and the notion that large sums

of money could be quickly earned in the so-called new economy stock market. (And later amplified the gloom which descended during the 20002002 bear market, so that by summer of 2002, predictions of a DOW average below 5000 were quite common.) (4.) Irrational behavior Sometimes the market seems to react irrationally to economic or financial news, even if that news is likely to have no real effect on the fundamental value of securities itself. But this may be more apparent than real, since often such news has been anticipated, and a counterreaction may occur if the news is better (or worse) than expected. Therefore, the stock market may be swayed in either direction by press releases, rumors, euphoria and mass panic; but generally only briefly, as more experienced investors (especially the hedge funds) quickly rally to take advantage of even the slightest, momentary hysteria. Over the short-term, stocks and other securities can be battered or buoyed by any number of fast market-changing events, making the stock market behavior difficult to predict. Emotions can drive prices up and down, people are generally not as rational as they think, and the reasons for buying and selling are generally obscure. Behaviorists argue that investors often behave 'irrationally' when making investment decisions thereby incorrectly pricing securities, which causes market inefficiencies, which, in turn, are opportunities to make money.

However, the whole notion of EMH is that these non-rational reactions to information cancel out, leaving the prices of stocks rationally determined. The Dow Jones Industrial Average biggest gain in one day was 936.42 points or 11 percent, this occurred on October 13, 2008. (5.) Crashes The examples and perspective in this section may not represent a worldwide view of the subject. Please improve this article and discuss the issue on the talk page. (March 2009)

A stock market crash is often defined as a sharp dip in share prices of equities listed on the stock exchanges. In parallel with various economic factors, a reason for stock market crashes is also due to panic and investing public's loss of confidence. Often, stock market crashes end speculative economic bubbles. There have been famous stock market crashes that have ended in the loss of billions of dollars and wealth destruction on a massive scale. An increasing number of people are involved in the stock market, especially since the social security and retirement plans are being increasingly privatized and linked to stocks and bonds and other elements of the market. There have been a number of famous stock market crashes like the Wall Street Crash of 1929, the stock market crash of 19734, the Black Monday of 1987, the Dot-com bubble of 2000, and the Stock Market Crash of 2008. . New York Stock Exchange (NYSE) circuit breakers % drop 10 %% drop 10 %% drop 10 %% drop 20 %% drop 20 %% drop 20 %% drop 30 %% drop time of drop before 2 pm 2 pm 2:30 pm after 2:30 pm before 1 pm 1 pm 2 pm after 2 pm any time during day close trading for one hour halt half-hour halt market stays open halt for two hours halt for one hour close for the day close for the day

Stock market index:__


Main article: Stock market index The movements of the prices in a market or section of a market are captured in price indices called stock market indices, of which there are many, e.g., the S&P, the FTSE and the Euronext indices. Such indices

are usually market capitalization weighted, with the weights reflecting the contribution of the stock to the index. The constituents of the index are reviewed frequently to include/exclude stocks in order to reflect the changing business environment.

Derivative instruments:__
Main article: Derivative (finance) Financial innovation has brought many new financial instruments whose pay-offs or values depend on the prices of stocks. Some examples are exchange-traded funds (ETFs), stock index and stock options, equity swaps, single-stock futures, and stock index futures. These last two may be traded on futures exchanges (which are distinct from stock exchangestheir history traces back to commodities futures exchanges), or traded over-the-counter. As all of these products are only derived from stocks, they are sometimes considered to be traded in a (hypothetical) derivatives market, rather than the (hypothetical) stock market.

Leveraged strategies:__
Stock that a trader does not actually own may be traded using short selling; margin buying may be used to purchase stock with borrowed funds; or, derivatives may be used to control large blocks of stocks for a much smaller amount of money than would be required by outright purchase or sales.

Short selling:__
Main article: Short selling In short selling, the trader borrows stock (usually from his brokerage which holds its clients' shares or its own shares on account to lend to short sellers) then sells it on the market, hoping for the price to fall. The trader eventually buys back the stock, making money if the price fell in the meantime and losing money if it rose. Exiting a short position by buying back the stock is called "covering a short position." This strategy may also be used by unscrupulous traders in illiquid or thinly traded markets to artificially lower the price of a stock. Hence most

markets either prevent short selling or place restrictions on when and how a short sale can occur. The practice of naked shorting is illegal in most (but not all) stock markets.

Margin buying:__
Main article: margin buying In margin buying, the trader borrows money (at interest) to buy a stock and hopes for it to rise. Most industrialized countries have regulations that require that if the borrowing is based on collateral from other stocks the trader owns outright, it can be a maximum of a certain percentage of those other stocks' value. In the United States, the margin requirements have been 50 %% for many years (that is, if you want to make a $1000 investment, you need to put up $500, and there is often a maintenance margin below the $500). A margin call is made if the total value of the investor's account cannot support the loss of the trade. (Upon a decline in the value of the margined securities additional funds may be required to maintain the account's equity, and with or without notice the margined security or any others within the account may be sold by the brokerage to protect its loan position. The investor is responsible for any shortfall following such forced sales.) Regulation of margin requirements (by the Federal Reserve) was implemented after the Crash of 1929. Before that, speculators typically only needed to put up as little as 10 percent (or even less) of the total investment represented by the stocks purchased. Other rules may include the prohibition of free-riding: putting in an order to buy stocks without paying initially (there is normally a three-day grace period for delivery of the stock), but then selling them (before the three-days are up) and using part of the proceeds to make the original payment (assuming that the value of the stocks has not declined in the interim).

New issuance:__
Main article: Thomson Financial league tables Global issuance of equity and equity-related instruments totaled $505 billion in 2004, a 29.8 %% increase over the $389 billion raised in 2003. Initial public offerings (IPOs) by US issuers increased 221 %%

with 233 offerings that raised $45 billion, and IPOs in Europe, Middle East and Africa (EMEA) increased by 333 %%, from $ 9 billion to $39 billion.

Investment strategies:__
Main article: Stock valuation One of the many things people always want to know about the stock market is, "How do I make money investing?" There are many different approaches; two basic methods are classified as either fundamental analysis or technical analysis. Fundamental analysis refers to analyzing companies by their financial statements found in SEC Filings, business trends, general economic conditions, etc. Technical analysis studies price actions in markets through the use of charts and quantitative techniques to attempt to forecast price trends regardless of the company's financial prospects. One example of a technical strategy is the Trend following method, used by John W. Henry and Ed Seykota, which uses price patterns, utilizes strict money management and is also rooted in risk control and diversification. Additionally, many choose to invest via the index method. In this method, one holds a weighted or unweighted portfolio consisting of the entire stock market or some segment of the stock market (such as the S&P 500 or Wilshire 5000). The principal aim of this strategy is to maximize diversification, minimize taxes from too frequent trading, and ride the general trend of the stock market (which, in the U.S., has averaged nearly 10 %%/year, compounded annually, since World War II).

Taxation:__
Main article: Capital gains tax According to much national or state legislation, a large array of fiscal obligations are taxed for capital gains. Taxes are charged by the state over the transactions, dividends and capital gains on the stock market, in particular in the stock exchanges. However, these fiscal obligations

may vary from jurisdictions to jurisdictions because, among other reasons, it could be assumed that taxation is already incorporated into the stock price through the different taxes companies pay to the state, or that tax free stock market operations are useful to boost economic growth.

The current scenario of Indian stock market_:_Indian stock market is a collection of different court-level exchanges in India. Is a platform for the masses of the country, to invest their savings and a source of funds for various organizations and institutions in the category of business. What is the Indian stock market? Indian stock market, including the exchange of more than 20, some of which are so popular as the cellular, at the national level. The stock exchange, first began in the Bombay Stock Exchange, (BSE). The oldest stock market stock native Asia and determined that the brokers Association and share $ in 1875. There are approximately 5000 offers a volume of more than 1 trillion dollars as the contemporary . Other most popular recording is the national stock exchange (NSE). The largest stock exchange in the country, third in the world. These two exchanges constitute a large part of the Indian capital market. What is their purpose? Stock markets is the fundamental task for the masses of the country as a platform to invest their savings and a source of funds for various organizations and institutions. offers for the shares of each person is a part of the company through the purchase of the company. These shares may be sold, traded and used as and in some cases. You can deal with a variety of financial instruments traded as the capital was already mentioned, in the future, the future market, wholesale derivatives, debt bonds, debt, currency. Trade only play an intermediary registered who wants to be a stock, or through a broker. Bursa has positive and negative influences on the impact of the economy of India industry. Some of these suggestions are listed below, the source of funding for the organizations of the source of income for investors investment Avenue, income source for the Government in the form of taxes, can be used to source the investors asked for job opportunities available in the current scenario and investors meeting in Indian markets improved idle

for most profitable. It is transparent and immediate transaction. All Indian stock markets are now computer and marketed over the Internet has become a common phenomenon. Indian stock markets have developed dynamic and change from well temperament bullish on symbolizes. Every bit of information, or even rumors from around the country may affect the market, and the prevailing atmosphere of the region or country accurately enough. People of the country and the world become smart and lending in Exchange and daily contact with very minute we see turbulence or combination of BSE stock memory BSE top losers transaction list is a world of good for their investment portfolio. Abschluss Indian stock markets may be a worthwhile investment hshdraach the ongoing transformation and the innate dynamics of markets can wipe out the savings or funds within one minute. Thus, the keywords for all private investors must be very careful and vigilant. Not always in the list of daily riots or BSE losers of trust as BSE is only for a moment to change things here. Keeping your eyes and ears open to insuring investors by significant losses. According to those rules, with some experience and training of the winning code changes may also result of himself also. Therefore, it is a way to save a fortune.

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