2. PREAMBLE
Stock exchange is that place where trading of shares is
done in terms of sale and purchase. It is a secondary
market for long term capital fund
There are 22 stock exchange in India. 8 are permanent
4. NATIONAL STOCK EXCHANGE NSE
•India's largest financial market.
•Established in 1992,
•Ranks third in the world for transacted volume
•The best in terms of sophistication
and advancement of technology
1600 companies
Headquarters Mumbai
Branches Ahmedabad, Chennai, Delhi, Kolkata, Hyderabad
Indore, Kanpur
5. BOMBAY STOCK EXCHANGE
Established in 1875
Asia’s first Stock Exchange
More than 5000 companies
World's No. 1 exchange in terms of
listed members
3rd largest Leading exchange in
December 2012
6. LISTING ON STOCK EXCHANGE
The minimum post-issue paid-up capital of the applicant
company shall be Rs. 10 crore for IPOs
The minimum issue size shall be Rs. 10 crore; and
The minimum market capitalization of the Company shall be
Rs. 25 crore
The above eligibility criteria would be in addition to the
conditions prescribed under SEBI Regulations and other Laws
and Act such as Company’s Act 1956.
7. STOCK INDEX
A statistical measure of change in an economy or a
securities market
index based on a statistical compilation of the share prices
of a number of representative stocks
8. TYPES OF STOCK INDICES IN INDIA
NATIONAL STOCK EXCHANGE
S&P CNX NIFTY, CNX NIFTY JUNOIR, NIFTY 500, THE NIFTY
MIDCAP 50, THE CNX MIDCAP 50
IT, BANK, FMCG, PSE, MNC, ENERGY, PHARMA AND REALTY.
BOMBAY STOCK EXCHANGE
SENSEX; MID-CAP, SMALL CAP, BSE 100, BSE 200, BSE
DOLLEX,
BSE IT INDEX, BSE CAPITAL GOODS INDEX, AND BSE FMCG
9. S&P CNX NIFTY INDEX
CNX stands for CRISIL NSE
owned and managed by IISL
Started Complied in 1995.
Is made up 50 Companies out of 1600 of NSE
covers 22 sectors of the Indian economy
a free float market capitalization weighted index
Base value is 1000
10. SECTORS OF NIFTY
SN SECTOR WEIGHT %
1 FINANCIAL SERVICES 25.26
2 IT 16.24
3 ENERGY 15.10
4 CONSUMER GOODS 13.51
5 AUTOMOBILE 8.65
6 PHARMA 6.55
7 METALS 4.92
8 CONSTRUCTION 3.97
9 CEMENT & CEMENT
PRODUCTS
3.19
10 TELECOM 2.03
11 INDUSTRIAL
MANUFACTURING
0.58
11. THE 50 COMPANIES
ACC
Ambuja Cements
Asian Paints
Axis Bank
Bajaj Auto
Bank of Baroda
BHEL
BPCL
Bharti Airtel
Cairn India
Cipla
Coal India
DLF
Dr. Reddy's
Laboratories
GAIL
Grasim Industries
HCL Technologies
• HDFC Bank
• Hero MotoCorp
• Hindalco Industries
• HDFC Ltd
• Infosys
• ICICI Bank
• Induslnd Bank Ltd
• IDFC
• ITC Limited
• Jaiprakash Associates
• Jindal Steel and Power
• Kotak Mahindra Bank
• L&T
• Lupin
• Mahindra & Mahindra
• Maruti Suzuki India
• NMDC. Ltd
• NTPC
• ONGC
• Power Grid
Corporation
• PNB
• Ranbaxy
Laboratories
• Reliance
Infrastructure
• Reliance Industries
• Sun Pharmaceutical
• SBI
• Sun Pharmaceutical
• TCS
• Tata Motors
• Tata Power
• Tata Steel
• Ultratech Cement
• Wipro
12. ELIGIBILITY CRITERIA FOR NIFTY
Liquidity (Impact Cost 0.50% of 90 observation)
Float-Adjusted Market Capitalization
Float (at least 10% of its stock available to investors
(float).
Domicile &Eligible Securities
The index is reviewed semi-annually
13. S&P BSE SENSEX
Bombay Stock Exchange Sensitive Index
Owned and managed by BSE
Started Complied in 1986.
Is made up 30 Companies out of 5000 of BSE
covers 10 sectors of the Indian economy
Covers about 47% of float market capitalization on BSE
A free float market capitalization weighted index
Base value is 100
14. THE 30 COMPANIES
Bajaj Auto Ltd
Bharat Airtel
Coal India Ltd
Gail India Ltd
HDFC Bank
ICICI Bank Ltd
ITC Ltd
L & T
Tata Steel
Wipro
Tata Motors
Bharat Heavy Electicals
Dr. Reddy’s Laboratories
Hero Motor Corp
Jindal Steel And Power
Mahindra & Mahindra
Reliance Industries
Tata Consultancy Services
Tata Power Company
Cipla Ltd
Hindalco Industries
HDFC Ltd
Infosys Ltd
Maruti Suzuki India
Oil & Natural Gas
Sesa Goa Ltd
State Bank Of India
Sun Pharmaceutical
Hindustan Unilever
Hindalco Ltd
15. ELIGIBILITY CRITERIA FOR SENSEX
Equities of companies listed on BSE Ltd
Daily trading for at least for the last 3 months
Float-Adjusted Market Capitalization
Absolute turnover
17. FACTORS AFFECTING INDEX
Individual stock
Demand & Supply of stock
Earnings of companies
Release of other information
government information/data
GDP
RBI Repo/interest rate
Inflation
Change of government
18. Global activities
Actions of developed countries like USA
Currency war
Gold Price
Rating Agency such as S&P , Wall street
FACTORS AFFECTING INDEX
19. USE OF INDEX
Benchmarking index for funds & derivatives
Measure of the health of the economy
Sensitivity of economy variables on companies
20. DEMAT ACCOUNT
Demat is the short form of dematerailaization. It defined as movement
from the use of physical certificate into electronic form.
Rocketing growth in stock market trading (72.3%) mid 1995 surge in
FI, inefficient settlement system
It started in India on in 1996 with the introduction of Depository Act
There are only two depositories , National Securities Depository
Ltd and the Central Depository Services Ltd.
Demat account are opened with Depository Particiapant (DP)
It can be used for financial assets: bonds, debentures
21. WHY DEMAT?
Time saving (months to 4-5 days of transfer).
Reduction of cost (no stamp duty)
Liquidity of shares
Globalization (increase in foreign investors)
Paper works very rare.
Transaction can be done anywhere
22. HOW TO BUY AND SELL SHARES
This is done through professionals know as
stockbrokers.
They buy and sell shares on investors behalf for a
commission called there brokerages.
23. FUTURE & SPOT INDEX
An index future is a derivative, similar to a stock
future, whose value is dependent on the value of the
underlying, in this case, the index like the S&P CNX
Nifty or BSE Sensex
Spot index is the current or today index. The price of
stock now.
Future index is base on spot index and past data.
24. WRAP UP
All indices including NIFTY and SENSEX are based on
speculations, estimates and averages of variables
which may or may not happen hence as financial
managers we must be cautious and exercise prudence
in making decisions with theses indices.
25. APPENDIX
IISL - India Index Services and Products Ltd.
CRISIL - Credit Rating and Information Services of India
Ltd
S &P – Standard and Poor.
NSE – National Stock Exchange
BSE – Bombay Stock Exchange
SEBI – Stock Exchange Board of India
CNX – CRISIL NSE Index