Stock Exchange

Stock
Market ?

Introduction
Organized Market
Association of Stock Brokers
Stocks & Bonds bought or sold
Secondary Market
23 Stock Exchanges
 Functions of SE
Promotes the savings
Provide liquidity to investors
Profitable activities for companies
Permits for the investor to have a political
power in the companies
Possibility of diversifying your portfolio
 Stock Markets
NYSE Bombay Stock
Nasdaq, America Exchange
National Stock
Tokyo Stock
Exchange Exchange
London Stock
Exchange
Shanghai Stock
Exchange
 BSE

Index: SENSEX
Sensex means Sensitive index
Date of Launch: 03 January 1989
Base period:1983-84
Base Index Value:100
30 Stocks
 BSE
Members: 852
World largest Index
Sectoral Indices
Timing: 09.00 AM 03.30 PM
Listed Co. : Over 6000
Method of Calculation: Free Float Market
Capitalization
 SENSEX Growth
1000, July 25, 1990 14,000, December 5,
2000, January 15, 2006
1992 16,000, September 19,
2007
4000, March 30, 1992
18,000, October 09,
6000, February 11, 2007
2000 20,000, October 29,
8000, September 8, 2007
2005 21,000, January 8,
10,000, February 6, 2008
2006 14,220, June 25, 2008
12,000, April 20, 2006 ,September,2008
 Free Float Market
Capitalization

Open Market Shares

BSE decide the Free Float Factor
Multiply the free-float factor with the
Market Capital
Free Float Market Capital
 NSE

Index: Nifty
Date of Launch: June 1994
Base period:1993-94
Base index value:1000
50 Stocks
Members 726
Method of calculation: Free Float Market
Capitalization
 Selection of Stocks

Market Capitalization
Trading Frequency
Number of Trades
Industry Representation
Listed History
Track Records
 Terms of Market

Groups of companies
Tick Size
Settlement
Shortages
Auctions
Post session
Future & Option
Why Stock Prices Rises ?
News about
company
News about the
Country
Exchange rate
regime(eg. USD vs.
INR)
Demand & Supply
Benefits of Investing in Shares
Possibility of high
returns
Easy liquidity
Unbeatable tax
benefits
Income from
dividends
Why Stock Market is so Volatile?
Integration of Indian markets with world markets
Introduction of flexible exchange rate regime
FDI & FII
Competition on markets
Liquidity of market
Destabilizing of Monetory Policy and Fiscal Policy
Leverage of Firms
Any crisis related to stock market