The Bhopal School Of Social Sciences
Financial market and service For Business
Name – Priyanshi Patel
Class – BBA ( Finance)
Section – E
Topic : Stock Market In India
Roll no. – 23011231
Submitted To – Namrata Ma’am
INTRODUCTION TO STOCK MARKET
The stock market as a whole is an exchange mechanism that helps investors buy and
sell shares in publicly traded companies. Though you can visit the New York Stock
Exchange (NYSE) and offices of the NASDAQ, these are just components in a broader
marketplace. Trades are conducted mostly through electronic means between
participants who are remote from each other. The mechanism is an excellent means for
businesses to raise capital from investors. Additionally, analysts closely examine its
traded prices for signals of economic strength or weakness.
he price of a stock changes based on the demand for shares from new investors who
want to buy, or the supply of shares from existing investors who want to sell. Investors
decide to buy or sell based on the company’s performance, economic conditions, the
current price of the shares, and other factors. Not every investor makes decisions based
on the same criteria, and what might not seem rational to one investor, will seem
perfectly acceptable to another. This dynamic keeps shares trading hands and makes
future prices difficult to predict.
People purchase stocks for a lot of reasons. Some hold onto shares, looking for income
from dividends. Others might think a stock will rise, so they snap it up, trying to buy
low and sell high. Still, others might be interested in having a say in how particular
companies are run. That’s because you can vote at shareholder meetings based on the
number of shares you own
STRUCTURE OF STOCK MARKET
Structure of stock market: stock market is a place where companies raise capital by selling
shares of stock (also known as 'equity') to investors. Most stocks give shareholders voting rights
and a residual claim on corporate earnings in the form of capital gains and dividends.Stock
markets also allow existing shares of publicly traded companies to change hands, where
individuals and institutions can invest in companies to potentially profit from their success or
speculate on shorter-term price movements. They play a crucial role in price discovery, as the
collective actions of buyers and sellers determine the market value of companies. Moreover,
stock markets promote corporate transparency and accountability, as public companies must
adhere to regulatory standards and disclose financial information to shareholders.Through their
functioning, stock markets serve as important economic indicators, reflecting investor sentiment
and a barometer of overall economic health. When stock prices rise, it often signals investor
confidence in the economy, while falling prices may indicate concerns about economic stability
Stock markets are organized platforms where buyers and sellers come together to trade shares
of publicly listed companies. At their core, these markets operate on the principle of supply and
demand, with share prices fluctuating based on companies' perceived value and overall market
conditions. When more people want to buy a stock than sell it, the price typically rises, while the
opposite is true.
MAJOR STOCK EXCHANGE
Indian Trading ExchangesMajor Commodity Trading Exchanges in IndiaCommodity Derivative ExchangesMCX Trading
HoursMCX Historical Prices DataMajor Stock Exchanges in IndiaWhat is BSE or Bombay Stock Exchange?What is NSE or
National Stock Exchange?What is BSE Index? How Does the Index Function?Major Stock Exchanges in IndiaIndia boasts a
vibrant financial landscape with several major stock exchanges at its core. These exchanges serve as crucial pillars of the
country's economy, facilitating the trading of various financial instruments and contributing significantly to India's global
economic presenceBombay Stock Exchange (BSE)Established in 1875, the Bombay Stock Exchange (BSE) stands as the oldest
stock exchange in Asia and a cornerstone of India's financial landscape. Located in Mumbai, the heart of India's bustling
financial sector, the BSE serves as a vital platform for trading a wide array of financial instruments, including equities,
derivatives, and debt securities.
BSE
Operated through the advanced BSE Online Trading (BOLT) system, the exchange ensures efficient order matching and
seamless trading activities, facilitating the participation of investors and businesses alike. Boasting nearly 5000 listed
companies, the BSE holds the prestigious position of being the ninth-largest stock market globally. Its scope is not limited to
equities; the exchange also enables trading in investment trusts, currencies, bonds, and derivatives, catering to the diverse
needs of investors.Beyond its numerical significance, the BSE plays a pivotal role in promoting financial literacy. Through
robust investor education and awareness programs, it empowers individuals, enhancing their understanding of the market
and enabling them to make well-informed financial decisions. Moreover, the BSE has a global outlook, actively seeking to
attract foreign investors and thereby contributing significantly to the internationalization of the Indian capital market.The
exchange's historical significance cannot be overstated. It has been a beacon for businesses seeking to raise capital and
investors looking to participate in India's economic growth story. With its electronic trading platforms, the BSE combines
tradition with technology, ensuring a secure and efficient trading environment.In essence, the Bombay Stock Exchange is not
merely a marketplace; it is a dynamic entity shaping India's economic trajectory. Its influence reverberates far beyond the
trading floor, making it an integral part of India's financial stability and progress.
National Stock Exchanges (NSE)
The National Stock Exchange (NSE) stands as a trailblazer in India's financial landscape. Established in 1992 and located in
Mumbai, NSE quickly gained prominence after its trading debut on November 4, 1994. Within a year, its turnover surpassed
that of its counterparts, marking a paradigm shift in the Indian stock market. The introduction of an electronic stock market
by the NSE revolutionized trading practices, propelling it ahead of the Bombay Stock Exchange (BSE). In 1996, NSE
collaborated with leading financial institutions to form the National Securities Depository Limited, heralding the age of
online trading.
•Market indices : In finance, a stock index, or stock market index, is an index that measures the
performance of a stock market, or of a subset of a stock market. It helps investors compare current stock price levels with
past prices to calculate market performance.[1]A comparison of three major U.S. stock indices: the NASDAQ Composite,
Dow Jones Industrial Average, and S&P 500 Index. All three have the same height at March 2007. The NASDAQ spiked
during the dot-com bubble in the late 1990s, a result of the large number of technology companies on that index.Two of
the primary criteria of an index are that it is investable and transparent:[2] The methods of its construction are specified.
Investors may be able to invest in a stock market index by buying an index fund, which is structured as either a mutual fund
or an exchange-traded fund, and "track" an index. The difference between an index fund's performance and the index, if
any, is called tracking error.
• tock market indices may be classified and segmented by the set of underlying stocks included in the index, sometimes
referred to as the "coverage". The underlying stocks are typically grouped together based on their underlying economics or
underlying investor demand that the index is seeking to represent or track. For example, a 'world' or 'global' stock market
index—such as the MSCI World or the S&P Global 100—includes stocks from all over the world, and satisfies investor
demand for an index for broad global stocks.Regional indices that make up the MSCI World index, such as the MSCI
Emerging Markets index, include stocks from countries with a similar level of economic development, which satisfies the
investor demand for an index for emerging market stocks that may share similar economic fundamentals. The coverage of
a stock market index is separate from the weighting method. For example, the S&P 500 market-cap weighted index covers
the 500 largest stocks from the S&P Total Market Index, but an equally weighted S&P 500 index is also available with the
same coverage.Global coverageThese indices attempt to represent the performance of the global stock market.[citation
needed] For example, the FTSE Global Equity Index Series includes over 16,000 companies.[3]
• Regional coverageThese indices represent the performance of the stock market of a single geographical region. Some
examples of these indices are the FTSE Developed Europe Index, and the FTSE Developed Asia Pacific Index.Country
coverageThese indices represent the performance of the stock market of a single country—and by proxy, reflects investor
sentiment on the state of its economy. The most frequently quoted market indices are national indices composed of the
stocks of large companies listed on a nation's largest stock exchanges, such as the S&P 500 Index in the United States, the
Nikkei 225 in Japan, the DAX in Germany, the NIFTY 50 in India, and the FTSE 100 in the United Kingdom.Exchange-based
coverageThese indices may be based on the exchange on which the stocks are traded, such as the NASDAQ-100, or groups
of exchanges, such as the Euronext 100 or OMX Nordic 40.Sector-based coverageThese indices track the performance of
specific market sectors. Some examples are the Wilshire US REIT Index, which tracks more than 80 real estate investment
trusts, and the NASDAQ Biotechnology Index which consists of about 200 firms in the
• Challenges and trend Understanding the Market TrendsThe Indian stock market offers both challenges
and opportunities to investors. With its unique blend of traditional industries and emerging technology
sectors, the market reflects the diverse economic landscape of the nation.From its early beginnings during
British colonial times to its present-day prominence, the Indian stock market has seen tremendous growth,
interspersed with periods of volatility.What is a Market Trend?Deciphering the Market’s PulseFinancial
markets show predictable price patterns known as market trends, reflecting how investors react to different
factors. These trends capture market dynamics and participants’ responses to stimuli.
• Directional Movements in Security PricesThe concept of directional price movement is at the core of a stock
market trend. Whether it’s stocks, bonds, or commodities, the prices of these securities don’t remain static.
They oscillate, influenced by factors ranging from company-specific news to macroeconomic data.In the case
of the Indian stock market, these oscillations can be broadly categorised into three primary
directions:Upward (Bullish):Characterised by rising security prices, indicating a prevailing optimism among
investors about future price increases.Downward (Bearish):This is marked by a decline in security prices,
reflecting a predominant sentiment of pessimism and expectations of further price drops.
• Access to Information: Accessing reliable information are the key challenges in stock trading, but sorting
through it all can be overwhelming and time consuming. To stay on top of news, trends and research takes a
lot of work and dedication.Market Volatility: The stock market is inherently unpredictable and volatile. One
day a stock might be up 20% and the next day it could plummet suddenly. This unpredictability makes it
difficult for traders to plan their moves or to manage their risk appropriately when trading stocks.High Risk-
High Reward Potential: When trading stocks, there is always the potential for high rewards if you make the
right moves but also a high risk of losing money if you make bad decisions or fail to predict shifts in the
market.Lack of Liquidity: Many stocks are illiquid – which means they are hard to buy and sell quickly because
there isn’t much demand for them on the open market. This can cause delays in trade execution or even
prevent traders from entering or exiting positions quickly when desired.Tax Implications: When trading
stocks, it’s important to take taxes into account when making decisions about selling or holding on to
investments for long periods of time as this will affect your gains (or losses).
THANKYOU
