indian stock market overview

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INDIAN STOCK MARKET OVERVIEW

The Bombay Stock exchange (BSE) and the National Stock exchange of India (NSE) are the two

primary exchange in India. In addition to that there are 22 regional stock exchanges. However ,

the BSE and NSE have establish themselves as the two leading exchanges and account for about80 percent of the equity volume traded in india ,the NSE and BSE are equal in size in terms of

daily traded volume . The average daily turnover at the exchange has increased from Rs. 851

crore in 1997-98 to Rs. 1284 crore in 1998-99 and further to Rs. 2273 crore in 1999-2000. NSE

has around 1500 shares listed with total market capitalization of around Rs. 921500 crore. The

BSE has over 6000 stocks listed and as a market capitalization around Rs. 968000 crore . Most

key stocks are traded on both the exchange and hence the investors could buy them on either

exchange . Both exchange have different settlement cycle, which allows to investors to shift their

positions on the bourses.

The primary index of BSE is BSE Sensex comprising of 30 stocks. MSE has the S&P NSE 50

index 9 (Nifty) which consists of fifty stocks. The BSE Sensex is the older and more widely

followed index. Both these indices are calculated on the basis of market capitalization and the

contain the heavily traded shares from the key sectors. The markets are closed in Saturday s and

Sundays . Both computerized mode of trading known as BOLT (BSE On line Trading ) and the

NEAT (National Exchange Automated Systems . It Facilitates more efficient processing ,

automatic order matching , faster execution of trades and a transparency . The scribs traded on

the BSE have been classified into A, B1 , B2, C, F, AND Z Groups. The A group represents

those , which are in the carry forward systems . the Z group scrips are the black listed companies

. The C group covers the odd lot securities A, B1, & B2 groups and Rights renunciations. The

key regulator governing stock exchanges, Brokers, Depositories , depository participations ,

mutual funds , FIIs and other participants in Indian secondary and primary market is the

securities and exchange Board of India ( SEBI).



THE BASIC IDEA REGARDING SHARE TRADING

The Share market immediately conjures up the stories of fortunes made and lost. A share makes

the holder a partial owner of the company and different types of share s has different types of

rights associated with it. If you are able to send your shares at a price more than its buying price

than you are making a profit out of it that to you make a profit on the risk hat I incur a loss if the

price falls. The business in which you are investing provide you with the profit in terms of

dividend. In the share market you are an anonymous player have made a reasonable profit. There

is no unique formula to ensure consistent gain before you venture into this market you should

know the basics of stock trading .

You have to approach in order to trade. You can trade either electronically or on the exchange

floor. Exchange floor scene must be familiar to you ; the NYSE has been on the television as part

of News coverage. It is here the broker arranges for your arranges for your shares to be ordered.

The floor check locates the floor traded from whom the shares can be bought .once the price is

agreed upon, the deal is finalized.

Electronic transaction is very common today. It is the efficient and fast method of stock trading.

Here too you require a broker but you receive confirmations, almost immediately. In the online

investing your broker will connect to the exchange network and search for a buyer or the seller

according to your idea.



THE BULLS, THE BEARS AND THE FARM

The Bulls

A Bull market is when everything in the economy is great , people are finding jobs, GDP is

growing , and the stocks are rising . Things are just plain rosy. Picking stocks during a bull

market is easier because everything is going up. Bull markets cannot last forever though, and

sometimes they can lead to dangerous situations if the stocks become overvalued . If a person is

optimistic and believe that the stocks will go up, he or she is called a BULL and is said to have a

bullish outlook.

The Bears

A Bear market is when the economy is bad, recession is looming and stock prices are falling.

Bear markets make it tough for investors to pick profitable stocks. One solution to this is to make

money when stocks are falling using a technique called short selling. And another strategy is to

wait on the sidelines until you feel market is nearing its end, only starting to buy on anticipation

of a bull market. if a person is pessimistic , believing that stocks are going to drop, he pr she is

called a BEAR and said to have a bearish outlook.

The other animals on the farm ± CHICKENS and PIGS

Chickens are afraid to lose anything. Their overrides their need to make profits and so they turn

only money to make market securities or to get out the money out of the markets entirely. While

its true that you should never invests in something over which you lose sleep. You are

considered guaranteed never to see any return if you avoid the market completely and never take

any risks , pigs are high investors looking for the big scores in a short period of time. Pigs buy on

the hot tips and invests in the companies without doing their due intelligence .



WHAT CAUSES STOCK PRICE TO CHANGE?

Stock price changes everyday due to following reasons:

y The main reasons which cause it to change is the market forces that is the demand and

supply. if more people want to to buy a stock than sell it, then the price moves up.

Conversely if more people wanted to sell than buy it, there would be greater supply than

the demand and the price would fall. Understanding supply and demand is easy . What

is difficult to comprehend is what makes people like particular stock and dislike another

stock . This comes down to figuring out what news is positive for a company and what

was news is negative. There are many answers to this problem and just any investor you

has their own ideas and strategies

y The most important factor that affects the value of the company is its earnings . earnings

are the profit that company makes and in the long run no company can survive without

it. It makes sense when you think about it. If a company never makes money , it isn¶t

going to stay in business . Public companies are require to report their earnings for times

a year. The reason behind is the that analyst base their future value of accompany on

their earnings projection. If a company results surprise i.e., better than expected , the

price jumps up. If it is vice-versa then the condition is reverse.

y

The various ratios are also responsible for the stock price to change such as priceearnings ratio while others a re extremely complicated and obscure with names like

chaikin oscillator or moving average convergence divergence.

y Theoretically, earnings are what affect investor¶s valuation of a company, but there are

indicators that investor use to predict stock price .Remember , it is the investor¶s

sentiments , attitude and expectations that ultimately affect stock prices



BUYING STOCKS

1. Brokerage :- The most common method to buy stocks is to use a brokerage. Brokerage

come in two different flavors. Full-service brkrge offer you erxpert advice and can

manage your account , they also charge a lot. Discounts brokerage offer little in the way

personal attention but are much cheaper.

At one time , only the wealthy could afford since only the expensive , full service bokers

were available. With the interest came the exploitation of online discount brokers.

2. DRIPs & DIPs

Dividend reinvestment plans (DRIP) and direct investment plans by which individual

companies for a minimal cost , allow shareholders to purchase stock directly from the

company . Drips are a great way to invest small amounts if money at regular intervals.



STOCKS BASICS CONCLUSION

y Stock means ownership As an owner, you have a claim on the asset and earnings ofa

company as well as voting with your shares.

y Stock is the equity bonds are debt, Bondholders are guaranteed a return on their

investment and have a higher claim than shareholders. This is generally why stocks are

considered riskier investments and require a higher rate of return

y You can loose your investments with stocks the flip side of this is to you can make a lot

of money if you invest in right company

y The two main types of stock markets are common and preferred . it is also possible for a

company to create different classes of stock

y

Stock markets are places where buyers and sellers of stock meet to trade. The NYSE and

the NASDAQ are the most important change in the United states

y Stock process change according to the supply and demand . there are many factors

influencing prices the most important of which is earnings

y To buy stocks you can either use a Brokerage or DRIP.

y Stock tables actually aren¶t that hard to read once to know what everything stands for

y Bulls make moneuy bears make money , but pigs get slaughtered



STOCK CHARTS

A Stock Market Chart is a sequence of prices or volumes plotted over a

specific timeframe. In statistical terms, stock charts are referred to as time

series plots. An investor who plots information about share prices and trading

volumes on a stock chart, looking for patterns is a Chartist.

Stock market charts are considered as important tools for making investment in the

stock market. This is because until a person predicts the move of any stock or stock

index, he cannot take decision and the stock market chart is the perfect way to know the

moves. All the big investors that have made huge money in the stock market are using

the stock market chart from sure. Doesnt matter if the information is provided by the

stock market chart in line and bar graph or pie chart, but a person must be able to

decipher the highs and lows of the stock market chart. The stock market charts are used

mostly for providing the graphical representation of the trends pertaining to the stock

market index or a mutual fund or a particular stock. The use of these charts depends

upon the motive of a person.

On this chart volume is represented by blue bars that are draw out by

blue line (Volume Moving Average). The black line represents price

movement during the period of time. The volume and price are put on



the same chart for easier understanding volume/price relationship,

how one affects other. The red vertical and gray horizontal navigation

bars will help you to trace this relationship over timeframe. To see

more detailed explanation of all features of our live Java stock charts

you can in our "Chart Help".

Investors, technical analysts and chartists use stock market chart to

analyze and forecast future price movements. Any security with price

data or volume data over a period of time can be represented by a

stock chart for analysis.

Market Indicators

Index Last %

AMEX Comp. 1,957.13 1.13%

NASDAQ Comp. 2,487.78 0.31%

NYSE Comp. 7,642.67 0.60%

DOW Comp. 3,786.61 0.16%

DJI 11,098.17 0.05%

DJT 4,611.88 0.08%

DJU 382.40 0.69%

S&P Financials 223.45 0.49%

S&P 100 549.66 0.30%

S&P 500 1,202.27 0.40% S&P 400 821.33 0.39%

Delayed - As of 4/20/2010 10:40 @ MarketVolume.com

indian stock market overview

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