Indian Stock Market

1. INDIAN STOCK MARKET
PRESENTED BY:
Dr MANPREET KAUR

2. Roadmap of Presentation
• Introduction
• History of Stock Market
• Stock Exchange
• Indian Overview
• Indices of Indian Stock market

3. What is a Stock?
• An instrument- that signifies an
ownership position (called equity) in a
corporation, and represents a claim on its
proportional share in the corporation’s
assets and profits.

4. Continued …..
• For example, if a company has 1000
shares of stock outstanding and a person
owns 50 of them, then he/she owns 5% of
the company.
• Most stock also provides voting rights,
which give shareholders a proportional
vote in certain corporate decisions

5. What is Stock market?
• A stock market is a market for the trading
of company stock/ shares, and
derivatives.
• This includes securities listed on a stock
exchange as well as those only traded
privately.

6. Continued …..
• Market is a place where buyers and
sellers of securities can enter into
transactions to purchase and sell shares,
bonds, debentures etc.
Primary markets: The primary market is
that part of the capital markets that deals
with the issuance of new securities

7. Continued …..
Secondary markets: The secondary
market is the financial market for trading
of securities that have already been issued
in an initial private or public offering.
In the secondary market, securities are
sold by and transferred from one investor
or speculator to another.

8. History of Stock Market
• 11th century, courratiers de change of
France, managed and regulated the debts
of agricultural communities on behalf of
the banks. As these men traded in debts,
they were known as "brokers”

9. Continued…
• 13th century commodity traders in
Bruges gathered inside the house of a
man called Van der Burse, and they
institutionalized this until now informal
meeting and became the "Bruges
Bourse". –Belgium

10. Continued….
• 1602, Dutch East India company
established Amsterdam Stock Exchange
and they were the first company to issue
stocks and bonds.
• The first shares on the Amsterdam Stock
Exchange . It was the first company to
issue stocks and bonds

11. Continued….
• London Stock Exchange: This is one of
the oldest stock exchanges in the world
and was established in 1698.
• New York Exchange: The New York
Exchange is the oldest and the most well-
known of all American stock markets.
This was established in 1792.

12. What is a stock exchange?
• Securities contracts act of 1956 defines,
“an association, organization or body of
individuals, incorporation, established for
the purpose of assisting, regulating and
controlling business in buying, selling and
dealing in securities”

13. Continued …..
• Stock exchange is a place where buyers
and sellers are come together for
undertaking transactions involving sale of
securities.

14. Two Major Stock Exchanges
BSE (BOMBAY STOCK EXCHANGE )
 NSE (NATIONAL STOCK
EXCHANGE)

15. Bombay Stock Exchange (BSE)
• Is the oldest Stock Exchange in Asia with
a rich heritage
• BSE was established in 1875 as “The
Native Share & Stock Brokers
• First Stock Exchange in the country to
obtain permanent recognition in 1956
from GOI

16. Continued …..
• Around 4700 Indian companies listed
with Stock Exchange.
• As of 2005, it is among the five biggest
Stock Exchanges in the world in terms of
transactions volume.
• The BSE or Bombay stock exchange
sensitive Index(Sensex) is a value
weighted index. Composed of 30 stocks

17. National Stock Exchange (NSE)
• In the year 1991 Pherwani Committee
recommended to establish National Stock
Exchange (NSE) in India.
• In National Stock Exchange there is
trading of equity shares, bonds and
government securities.

18. Continued …..
• The NSE India ranked 3rd position since
last 4 years in terms of total number of
trading per calendar year.
• Presently there are 24 stock exchanges in
India, out of which 20 have exchanges
National Stock Exchange

19. Objectives of NSE
• To establish nation wide trading facility
for all types of securities.
• Ensuring equal access to investors all
over the country through an appropriate
telecommunication network

20. Continued …..
• Providing fair, efficient & transparent
securities market using electronic trading
system
• Enabling shorter settlement cycles and
book entry settlements
• Meeting International benchmarks and
standards

21. Functions of Stock Exchange
• It provide ready market for securities
• It helps in price discovery of securities.
• It insure low cost of raising finance issue
of new market instruments in the market
• Helps in capital generation process.
• Encourages capital formation

22. Continued…
• Provides proper direction to invest
capital
• Promotion of investment.
• Give mobility to capital.
• Exercise control over the working of
companies.
• Marketing of new issues.

23. In India Overview
• India's oldest and first stock exchange:
Mumbai (Bombay) Stock Exchange.
Established in 1875.
• More than 6,000 stocks listed.
• Total number of stock exchanges in India:
22

24. Continued …..
• They are in: Ahmadabad, Bangalore,
Calcutta, Chennai, Delhi etc.
• There is also a National Stock Exchange
(NSE) which is located in Mumbai.

25. Continued …..
• There is also an Over The Counter
Exchange of India (OTCEI) which allows
listing of small and medium sized
companies.
• The regulatory agency which oversees
the functioning of stock markets is the
Securities and Exchange Board of India
(SEBI), which is also located in Bombay

26. What Is Sensex?
• Sensex, in simple words, is the combined
value of stocks of 30 specific companies
listed on Bombay stock exchange (BSE).
• BSE can revise this list of 30 over the
time.
• So, if Sensex fluctuates, it shows on the
economy as well.

27. Continued …..
• For example, if Sensex goes up people
become more intrigued in buying stocks
because they believe that economy is
going to grow. But, if Sensex goes down,
people tend to stop investing in economy.

28. What Is Nifty?
• NIFTY is abbreviated form for National
Fifty. This is an index on fifty shares
listed on the National Stock Exchange of
India.
• It covers 50 stocks from different sectors
of the Indian economy.
• So, this is commonly referred to as
NIFTY 50 also.

29. Continued …..
• When you buy Nifty future, it means you
have invested in 50 company’s shares
which, collectively, are representing Nifty
Index. It is basically automatic
diversification of your investment in 50
stocks.

30. THANK YOU