2. STOCK MARKET OR SHARE MARKET
• Stocks are issued by companies in order to raise capitals and are
bought by investors in order to acquire a portion of the company.
• A Stock market is the place where buying and selling of stocks takes
place. Nowadays due to internet and advanced technology buying and
selling of stocks takes place anywhere in India and also from foreign
country, there is no need to be physical present in exchanges like NSE
and BSE. Stock markets are perfect competitive market
3. WHAT IS A STOCK EXCHANGE ?
• A market in which securities are bought and sold: "the company was
floated on the Stock Exchange".
• The initial offering of stocks and bonds to investors is by definition
done in the primary market and subsequent trading is done in
the secondary market.
• A stock exchange is often the most important component of a stock
market.
• Supply and demand in stock markets are driven by various factors
that, as in all free markets, affect the price of stocks.
4. Types of Market
• Normal Market : Order Traded in regular lot Size For demat
shares, lot size is 1 share 2. Odd Lot Market : Used for limited physical
Market Order not traded in regular lot Size but both price & quantity
should tally
• Odd Lot Market : Used for limited physical Market Order not
traded in regular lot Size but both price & quantity should tally with
each other.
5. • Spot Market : Different settlement periods depends on normal
orders Sell & Purchases takes place on same date.
• Auction Market : Initiated by exchange on behalf of members
for settlement related reasons are shortage and bad deliveries Loss is
recovered from members
6. Big Stock Markets
• NYSE ( New York Stock Exchange)
• NASDAQ-America
• Dow Jones
• S&P‘ 500
• Tokyo Stock Exchange
• London Stock Exchange
• Bombay Stock Exchange, India
• National Stock Exchange, India
7. Stock Exchanges in India
• There are 22 stock exchanges in India. But, two of them are biggest.
• NSE (National stock exchange) - is the 9th largest stock exchange in
the world by market capitalization and largest in India by daily
turnover and number of trades, for both equities and derivative
trading.
• BSE (Bombay stock exchange) - is the oldest stock exchange in Asia
with a rich heritage of over 137 years of existence.
8. Bombay Stock Exchange
• BSE Limited formerly known as Bombay Stock Exchange (BSE) , is the
oldest stock exchange in Asia.
• It is a stock exchange located on Dalal Street, Mumbai.
• The equity market capitalization of the companies listed on the BSE was
US$1 trillion (or Re :5526,99,93,920.3007) as of December 2011.
• It the 6th largest stock exchange in Asia and the 14th largest in the world.
• BSE Limited formerly known as Bombay Stock Exchange (BSE) , is the
oldest stock exchange in Asia.
• It is a stock exchange located on Dalal Street, Mumbai.
9. • The equity market capitalization of the companies listed on the BSE was
US$1 trillion (or Re :5526,99,93,920.3007) as of December 2011.
• It the 6th largest stock exchange in Asia and the 14th largest in the world.
• The BSE has the largest number of listed companies in the world.
• As of March 2012, there are over 5,133 listed Indian companies and over 8,196
scrips on the stock exchange, the Bombay Stock Exchange has a significant
trading volume.
• The BSE SENSEX, also called "BSE 30", is a widely used market index in
India and Asia.
• Though many other exchanges exist, BSE and the National Stock Exchange
of India account for the majority of the equity trading in India.
• While both have similar total market capitalization (about USD 1.6 trillion),
share volume in NSE is typically two times that of BSE.
10. National Stock Exchange
• The National Stock Exchange (NSE) is stock exchange located at Mumbai,
India.
• It is the 16th largest stock exchange in the world by market capitalization
and largest in India by daily turnover and number of trades, for both equities
and derivative trading.
• NSE has a market capitalization of around US 985 billion and over 1,646
listings as of December 2011.
• NSE and BSE are the two most significant stock exchanges in India, and
between them are responsible for the vast majority of share transactions.
11. • The NSE's key index is the S&P CNX Nifty, known as the NSE
NIFTY (National Stock Exchange Fifty
• NSE is mutually owned by a set of leading financial institutions,
banks, insurance companies and other financial intermediaries in
India but its ownership and management operate as separate entities.
• There are at least 2 foreign investors NYSE Euro next and Goldman
Sachs who have taken a stake in the NSE.
• In 2011, NSE was the third largest stock exchange in the world in
terms of the number of contracts (1221 million) traded in equity
derivatives.
• It is the second fastest growing stock exchange in the world with a
recorded growth of 16.6%.
12. Stock Broker
• A stockbroker is person who is licensed to trade in shares.
• Brokers also have direct access to the share market and can act as your
agent in share transactions.
• For this service they charge a fee i.e. brokerage.
• They can also offer additional services like advice on shares,
debentures, government bonds and listed property trusts and non-
listed investment options (cash management trusts, property and
equity trusts.
13. TRADING IN STOCK MARKET
• The market regulator, the Securities and Exchange Board of India
(SEBI), has made it compulsory to open the Demat account if you
want to buy and sell stocks.
• A person want to buy/sell stocks in the stock market has to first place
his/her order with a broker or can do themselves using online trading
systems.
• The stocks purchased will be sent to the your Demat account. This
process is called Rolling Settlement Cycle.
14. What is Demat account
• DEMAT stands for DEMATerialization.
• It is process in which physical paper shares are converted into
paperless (computerized) form.
• In India there are two Depository organizations called NSDL
(National Securities Depository Ltd.) &CDSL (Central Depository
Services India Ltd.)
• Brokers and most of Banks provides facility to open demat account.
15. Investment in Short term, Mid term and
Long term trading
• Short Term Trading Stock trading done from one week to couple of
months is called short term
• Mid term Trading Stock trading done from one month to couple of
months, say six to eight months is called mid term trading
• Long term trading Stock trading done form couple of months to
couple of years is called long term trading.
16. Stock Market Conditions
• There are two ways to describe the general conditions of the stock market:
• 1)BULL MARKET
• 2)BEAR MARKET
• Bull Market -A Bull Market indicates the constant upward movement of the
stock market. A particular stock that seems to be increasing in value is
described to be bullish.
• Bear market- A bear market indicates the continuous downward movement
of the stock market. stock that seems to be decreasing in value is described
to be bearish.
17. Benefits of investing in shares
• Possibility of increase in value of share
• Income from dividends
• Easy liquidity
• Tax benefits on income earned such as exemptions U/s 10(34) for
dividends, Sec 54 for calculating STCG & LTCG
18. CAUSES OF PRICE FLUCTUATION
• Demand and supply
• Bank rate
• Speculative pressure
• Actions of underwriters and other financial institutions
• Change in company’s board of directors
• Causes of price fluctuation
• Financial position of the company
• Trade cycle 8. Political factors
• Sympathetic fluctuations
• Other factors: (1)Expected monsoon (2) Personal health of head of government or chairman of
the company (3) Oil prices in the international market
