Library Progress International Print version ISSN 0970 1052

Vol.44 No.3, Jul-Dec 2024: P.12554-12559 Online version ISSN 2320 317X

Original Article Available online at www.bpasjournals.com

A Comprehensive study on the Indian Stock Exchange

1 Dr. Monica K, 2 Dr. Jenesiszodykha V, 3 Dr. N. Maheswari, 4Dr. D. Shanthi
1
Assistant professor, Department of Commerce, Faculty of Science and Humanities SRM Institute of Science and
Technology, Kattankulathur – 603203, Tamil Nadu, India, monicak1@srmist.edu.in / picsmoni24@gmail.com
2
Assistant professor, Department of Commerce, Faculty of Science and Humanities SRM Institute of Science and
Technology, Kattankulathur – 603203, Tamil Nadu, India, jenesis.zodykha@gmail.com / jenesisv@srmist.edu.in
3
Assistant professor, Department of Commerce, Anna Adarsh College for Women, Tamil Nadu
4
Assistant professor, Department of Commerce, Apollo arts and Science College, Tamil Nadu

How to cite this article: Monica K, Jenesiszodykha V, N. Maheswari , D. Shanthi (2024) A Comprehensive
study on the Indian Stock Exchange. Library Progress International, 44(3), 12554-12559.

ABSTRACT
The stock market is seeing increased activity and is becoming more and more significant. This article compares
the activities and movements of the Indian stock market to those of its worldwide equivalents, highlighting trends,
similarities, and patterns in the contemporary environment of globalisation and the ensuing integration of the
global markets. This study examines the New York Stock Exchange (NYSE). As part of the Indian stock market,
the study also uses the Bombay Stock Exchange (BSE) and the National Stock Exchange of India Limited (NSE).
The study is a theoretical framework of the Indian stock market. Secondary sources were used to collect the data.

Keywords: Secondary market, stock market, NSE, BSE, Indian stock exchange, Stock exchange

Introduction
One of the most exciting areas of the financial system is the stock market, which plays a significant role in
economic growth. The stock market is a marketplace where buyers and sellers of securities can transact the buying
and selling of bonds, shares, and debentures. To Put differently, the stock market serves as a platform for trading
a variety of assets and their derivatives. The Indian stock market serves as a gauge for assessing the health and
progress of the country's economy. The founding of the Securities and Exchange Board of India (SEBI) also
marked the beginning of the Indian stock market. The primary goal of the paper is to learn more about the different
technologies that are available in the stock markets and have the potential to draw in an increasing number of
investors.
A stock market, sometimes referred to as an equity market or share market, is a gathering place for stock buyers
and sellers. These stocks stand for stockholder interests in businesses. Securities that are traded publicly or
privately may be among them. One illustration of a share market is the New Year Stock Exchange. Big businesses
typically list their stock on a stock market because it increases share liquidity—that is, making it easier for
investors to acquire and sell—which is something that attracts investors. Also drawn to this liquidity are foreign
investors. The Indian economy was heavily controlled before liberalisation. Stemming solely from high tariffs
and rates, high licencing requirements, and restricted investment in essential sectors, the economy grew in a way
that was largely unsustainable due to its reliance on borrowing to close the current account deficit during the
1980s.
The financial industry was very unstructured back then, with only bonds, equity, insurance, commodity markets,
mutual funds, and additionally, the first national stock market was established, along with the regulating body
known as SEBI (Security Exchange Board of India). Indians have long been recognised for their thrifty ways.
Investments, which support both national and individual economic progress and stability, are intimately linked to
savings. The advancement of the various economic units, which can be broadly categorised into the corporate,
government, and household sectors, reflects the economic development of a country. Indians often tend to save
as much of their regulated income as possible to reduce future risk and to spend less than they make. The financial
system is made up of many markets, regulatory agencies, and institutions.

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Any nation's financial system's performance is influenced by the health of its financial markets, financial
intermediation, and financial instruments and products. The history and evolution of the stock exchange are
covered in this chapter. The study was done on the salient features of the Indian securities market.

Review of Literature
Arun Jethmalani (1999) examined the risk associated with investing in corporate securities, such as shares and
debentures, and how it should be measured. He highlighted the fact that taking a chance is typically established
using the expected variance of returns. Comparing 80 risks within the same investment class is more challenging.
Although the study believes that investors accept the risk assessment provided by credit rating organisations, it
was called into doubt following the Asian financial crisis. In his concluding remarks, he stated that danger cannot
be measured or quantified.
Suresh G. Lalwani (1999) highlighted the need for risk management in the securities market, with a focus on price
risk in particular. This research study proves the statement that the securities market is a "vicious animal and
there's a good probability that things could get worse rather than better.
Nath and Verma (2003) studied the relationship between the three main stock market indices in South Asia:
Taiwan's Taiex, India's NSE-Nifty, and Using both bivariate and multivariate co-integration techniques to
simulate the relationships between the stock markets, Singapore (STI) discovered no co-integration across the full
timeframe (daily data from January 1994 to November 2002). The study concluded that there isn’t any long-term
balance.
According to "Bhanu Pant and Dr T.R.Bishnoy" (2001), a random walk analysis was conducted from April 1996
to June 2001 to examine the daily and weekly returns of five Indian stock market indices. They discovered that
the indices of the Indian stock market did not move randomly.
Juhi Ahuja (2012) provides an overview of the Indian capital market's composition. A paradigm change in Indian
capital has been noted within the last ten or so years. marketplace. The Indian capital market is now similar to the
global capital markets thanks to the implementation of numerous reforms and advances. The market has a
sophisticated regulatory framework, a cutting-edge infrastructure, and increasing market capitalization, liquidity,
and resource mobilisation. Another positive development that has replaced the bank's model of corporate finance
is the rise of the private corporate debt market.

Objectives of the study

To identify pertinent variables that influence trading in the Indian stock market.
To learn about the Indian stock market's effect on the people.

Research Methodology
The secondary data used in this study was gathered from a variety of sources, including journals, publications,
and websites.

The evolution of the secondary market

Indian stock market is the oldest exchange in India the Bombay Stock Exchange (BSE). Its origins can be traced
back to 1855 when four Gujaratis and one Parsi stockbroker would congregate in front of Mumbai's municipal
hall under banyan trees. The meetings were held at several locations before the group finally relocated to Dalal
Street in 1874. In 1875, the group officially became "The Native Share & Stock Brokers Association." Under the
Securities Contracts Regulation Act, the BSE was the first stock exchange in India to receive official recognition
from the government in 1958. The exchange relocated to the Phiroze Jeejeebhoy Towers on Dalal Street in the
Fort neighbourhood in 1980. Stocks are bought and sold on the stock market. The price per share is determined
by the stock market.
After each session ends, business analysts and potential investors attentively watch Indian shares listed on the
national stock exchange and the Bombay Stock Exchange to determine which stocks are performing the best. The
technical assessment method used in the stock market project report is entirely statistical and devoid of any type
of bias or human opinions. Every trading session concludes with the publishing of a project report for the Indian
stock market. The firms also provide annual or bi-annual project reports that include a detailed performance
review. Users can monitor a stock's performance over time and compare it to another stock's index by using

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simple-to-read and evaluating stock market project reports.to learn about the Indian stock market's most current
movements.
Indian Stock Exchanges
The stock exchange, sometimes referred to as the stock market or share market, is a crucial component of India's
capital market. It is essential to the expanding business and industry, which in turn impacts the economy. It is a
well-run market for the buying and selling of corporate and other securities, allowing businesses to raise capital
by combining funds from various investors and providing investors with an opportunity to invest. In addition, it
makes sure that securities are traded under predetermined guidelines. The Bombay Stock Market is the oldest in
India, and the London Stock Exchange is the oldest globally.
The National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE) are the two primary indexes among
India's eight operational stock exchanges. These two stock exchanges handle the majority of the trade on the
Indian stock market. The trading schedule, trading procedures, settlement procedure, and other details are identical
for both exchanges.
The largest and fastest stock market in South Asia and India is the Bombay Stock Market (BSE). It was founded
in 1875. On BSE, there are around 5,000 listed companies. The Bombay Stock Exchange's primary index, Sensex,
is made up of 30 stocks.
The Securities Contracts (Regulations) Act of 1956 allowed the National Stock Exchange to be recognised as a
stock exchange in 1993 after it was established in 1992 as a tax-paying firm. With a market valuation of about
$2.27 trillion as of April 2018, the NSE is the 12th biggest stock exchange globally. Furthermore, it was the first
exchange to offer an entirely automated electronic trading system based on a screen. The 50-stock Nifty index is
used to gauge the overall performance of the National Stock Exchange.

Findings of the Study

Variables that influence the Indian stock market.
Economic Measures: The GDP, inflation rate, and unemployment rate are examples of economic indicators that
show how the economy is doing overall. Strong GDP growth and low unemployment tend to boost corporate
activity and consumer spending, which boosts stock prices and company profitability. On the other hand,
excessive unemployment or inflation might result in lower consumer spending and increased economic
uncertainty, which can lower stock values. Good economic news is therefore important for boosting investor trust
in the company's shares.

Interest rates and the rate of inflation: As the cost of products and services rises, customers may cut down on
their purchases, which could hurt business profits and stock values. High inflation may prompt central banks to
hike interest rates, which would increase the cost of borrowing for companies and have an impact on their
profitability. Moreover, rising product prices reduce consumer spending, which has an impact on business
earnings and stock performance. Lower interest rates, on the other hand, can encourage borrowing and spending,
which could raise stock prices and corporate earnings. The challenges brought on by inflation are greater.
Uncertainty regarding the future value of money causes investors to behave conservatively, which affects stock
market patterns. Furthermore, variations in stock valuations may result from the impact of inflation on the
assessment of future corporate cash flows.

Commercial Earnings: Stock prices are directly impacted by the performance of the company, as shown in
quarterly earnings reports. Robust profit growth attracts investors and may raise stock values since it signals a
sound business climate. On the other hand, underwhelming earnings may cause stock prices to decline and investor
confidence to decline. These are not, however, the general guidelines. Investors select equities based on their
expectations for future growth. For instance, one of the biggest conglomerates in India is Reliance Industries
Limited (RIL), which has holdings in petrochemicals, refining, telecommunications, and retail. Robust
profitability from its varied companies is indicated when RIL releases impressive quarterly earnings. This
typically boosts investor confidence, which raises the price of the company's shares.

Currency Rates: For multinational corporations, particularly those that primarily depend on foreign markets,
changes in exchange rates can have a significant impact on their overall financial performance as well as their

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sales, profits, and competitive standing. Investors keep a careful eye on these swings and evaluate how they can
affect a company's profits and stock prices. Businesses that have a diverse global presence and clearly defined
currency risk management policies may be better able to handle the difficulties presented by currency fluctuation.

Global Events: Uncertainty in financial markets can be brought about by geopolitical events like trade tensions,
hostilities, or economic disasters. Stock market volatility may result from cautious or risk-averse investors.
Conversely, positive occurrences throughout the world can increase investor confidence and result in market
gains. For example, in 2022, the war's political unpredictability, rising interest rates, and oil prices all contributed
to global share market volatility.

Foreign Institutional Investment (FII) Flows: Due to its effect on market liquidity, foreign investors' purchases
and sales of Indian equities can have a significant effect on stock prices. Higher demand for equities can result
from more foreign investment, which would raise prices. On the other hand, large inflows may lead to selling
pressure and a price drop.

Investor Attitude: Emotions-driven investor sentiment is a major factor in market fluctuations. Elevated demand
for equities due to positive mood might drive up prices. Prices can drop as a result of panic sales brought on by
negative attitudes. Market mood can be influenced by elements such as news headlines, social media, and the state
of the economy as a whole.

Business Trends: The performance and trends of particular industries or sectors have an impact on stock market
trends as well. The profitability and prospects of businesses operating in certain industries can be impacted by
variables like the dynamics of supply and demand, shifting customer tastes, and changes in regulations.

Market Fluidity: Market liquidity is the degree to which assets can be purchased or sold without materially
altering their price. Reduced liquidity may lead to wider bid-ask spreads and increased price volatility, which
could have an impact on stock prices.

Technological Developments: New technologies have the power to upend entire sectors of the economy and
open up fresh investment opportunities. Businesses that use developing technology have the potential to grow
quickly, draw interest from investors, and see an increase in stock price.

Indian stock market's effect on the people

The majority of people who do not own shares will not be significantly impacted by sudden changes in the stock
market. However, the stock market does not entirely ignore the impact it has on regular workers. First, pension
money. Numerous private pension plans plan to make stock market investments. A significant and protracted
decline in the stock market might cause their pension fund's value to decline, which could result in smaller
retirement benefits. In a similar vein, pension fund values may rise in the event of strong stock market
performance. Individuals with a private pension will probably be somewhat involved in the stock market, even if
they do not own shares.
Business investment. Businesses may be able to raise funds for investments by offering new shares on the stock
market. Growth and additional jobs could result from this. When bank financing is scarce, private funding may
be obtained through the stock market. But often, funding does not come from the stock market initially. Instead
of using share options, bank loans are typically used to finance the majority of investments. The stock market has
a minimal impact on employment and investment decisions.
One could claim that the stock market's promotion of short-termism can harm consumers and employees.
Typically, shareholders desire higher dividends. As a result, companies that are listed on the stock market may
experience pressure to boost their immediate earnings. This may result in cost-cutting measures that negatively
impact employees (such as zero contract hours) or increase the firm's temptation to participate in collusive tactics
that raise costs for customers. Some have stated that because the stock market is a major source of funding for
businesses, UK corporations are more likely to be short-term. In Germany, bank loans with long terms are more
frequently used to finance businesses. Generally speaking, banks are more eager to support businesses that have

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the potential to succeed over the long haul.

Conclusion
A multitude of interrelated factors govern the voyage of stock market investing. It's critical to comprehend how
these elements operate before opening a demat account to begin your investing journey. Every element has a
significant impact on how stock prices move, from global events that send shockwaves across markets to economic
data that show the state of the country's finances. It takes a combination of information, analysis, and human
psychology understanding to successfully navigate this complicated terrain. You can make better-investing
judgements by keeping up with changes in the economy, government policy, technology, and investor mood.

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