Post on 08-Apr-2018
8/6/2019 Indian Stock Market1
http://slidepdf.com/reader/full/indian-stock-market1 1/40
Indian Stock MarketIndian Stock Market
Market of ³Hope, Discipline &
Greed´
8/6/2019 Indian Stock Market1
http://slidepdf.com/reader/full/indian-stock-market1 2/40
What is Stock ?What is Stock ?
stock is a share in thestock is a share in the
ownership of a company. Stock represents a claimownership of a company. Stock represents a claimon the company's assets and earnings.on the company's assets and earnings.
As one acquire more stock , his/her ownership stakeAs one acquire more stock , his/her ownership stakein the company becomes greater.in the company becomes greater.
Whether one say share, equity, or stock, it all meansWhether one say share, equity, or stock, it all meansthe same thing.the same thing.
8/6/2019 Indian Stock Market1
http://slidepdf.com/reader/full/indian-stock-market1 3/40
Classification of stocksClassification of stocks
StocksStocks areare classifiedclassified asas
1.1. CommonCommon Stock Stock::-- CommonCommon sharesshares representrepresent
ownershipownership inin aa companycompany andand aa claimclaim (dividends)(dividends) onon
aa portion portion of of profits profits.. InvestorsInvestors getget oneone votevote per per shareshare
toto electelect thethe board board members,members, whowho overseeoversee thethe major major
decisionsdecisions mademade by by managementmanagement
2.2. PreferentialPreferential StocksStocks::-- PreferredPreferred stock stock representsrepresents
somesome degreedegree of of ownershipownership inin aa companycompany but but usuallyusually
doesn'tdoesn't comecome withwith thethe samesame votingvoting rightsrights..
8/6/2019 Indian Stock Market1
http://slidepdf.com/reader/full/indian-stock-market1 4/40
WhatWhat isis StockStock
MarketMarket ??AA stock stock marketmarket isis aa
marketmarket for for thethe tradingtrading of of
publicly publicly heldheld companycompany
stock stock andand associatedassociatedfinancialfinancial instrumentsinstruments
(including(including stock stock options,options,
convertiblesconvertibles andand stock stock
indexindex futures)futures)..
8/6/2019 Indian Stock Market1
http://slidepdf.com/reader/full/indian-stock-market1 5/40
What is Indian Stock Exchange ?What is Indian Stock Exchange ?
Formal organizations, approved and
regulated by the Securities and Exchange
Board of India (SEBI), that are made upof members who use the facilities to
exchange certain common stocks.
8/6/2019 Indian Stock Market1
http://slidepdf.com/reader/full/indian-stock-market1 6/40
INDIAN STOCK EXCH ANGESINDIAN STOCK EXCH ANGES
Two National Level Exchanges are
1. National Stock Exchange (NSE)
2. Bombay Stock Exchange (BSE)
Total 22 Exchanges are there in India National
and Regional level, all exchanges conducts100% computerized trading.
8/6/2019 Indian Stock Market1
http://slidepdf.com/reader/full/indian-stock-market1 7/40
BSE Bombay Stock Exchange
Established In 1875 As"The Native Share AndStock BrokersAssociation".
Oldest Stock ExchangeIn Asia.
Around 4990Companies Are Listed.
Daily TradedCompanies Are Around3500
8/6/2019 Indian Stock Market1
http://slidepdf.com/reader/full/indian-stock-market1 8/40
�The BSE or Bombay stock exchange sensitive Index is a
value weighted index. Composed of 30stocks with the baseApril 1979=100.
�
It consists of the 30 largest and most actively tradedstocks, representative of various sectors, on the BSE.
�These companies account for around one fifth of themarket capitalization of the BSE.
�The abbreviated from sensex was coined by Deepak mohoni around 1990 while writing market analysiscolumns for some business newspaper.
8/6/2019 Indian Stock Market1
http://slidepdf.com/reader/full/indian-stock-market1 9/40
SENSEXSENSEX
Sensex is an index, an index is basically anSensex is an index, an index is basically an
indicator.indicator.
It gives a general idea about whether most of It gives a general idea about whether most of the stocks have gone up or most of the stocksthe stocks have gone up or most of the stocks
have gone down. The sensex is an indicator of have gone down. The sensex is an indicator of
all the prices of the major companies of theall the prices of the major companies of the
BSE(Bombay stock exchange)BSE(Bombay stock exchange)
8/6/2019 Indian Stock Market1
http://slidepdf.com/reader/full/indian-stock-market1 10/40
OBJECTIVE OF SENSEXOBJECTIVE OF SENSEX To measureTo measure
market movementsmarket movements
Benchmark for Benchmark for
funds performancefunds performance
For index basedFor index based
derivativesderivatives
products products
8/6/2019 Indian Stock Market1
http://slidepdf.com/reader/full/indian-stock-market1 11/40
HOW SENSEX IS C ALCULATEDHOW SENSEX IS C ALCULATED
SensexSensex isis calculatedcalculated usingusing aa ³market³market-- capitalizationcapitalization
weighted´weighted´ methodologymethodology..
AsAs per per thisthis methodology,methodology, thethe levellevel of of indexindex atat anyany
point point of of timetime reflectreflect thethe totaltotal marketmarket valuevalue of of 3030
componentscomponents stock stock relativerelative toto aa base base period period.. (the(the
marketmarket capitalizationcapitalization of of aa companycompany isis determineddetermined by bymultiplyingmultiplying thethe price price of of itsits stock stock by by thethe number number of of
sharesshares issuedissued by by thethe company)company)..
8/6/2019 Indian Stock Market1
http://slidepdf.com/reader/full/indian-stock-market1 12/40
NSE National Stock Exchange
The NSE of India limited was created on the basis of The NSE of India limited was created on the basis of
the report of the high powered study group onthe report of the high powered study group on
establishment of new stock exchanger, whichestablishment of new stock exchanger, which
recommended promotion of NSE by financialrecommended promotion of NSE by financialinstitution to provide access to investors from allinstitution to provide access to investors from all
across the country on an equal footing.across the country on an equal footing.
In 1992, NSE was incorporated as a tax payingIn 1992, NSE was incorporated as a tax paying
company unlike other stock exchange in the country.company unlike other stock exchange in the country.
8/6/2019 Indian Stock Market1
http://slidepdf.com/reader/full/indian-stock-market1 13/40
�In April 1993,NSE was recognized as a stock exchange
under the securities contract(regulation) act,1956.
�The capital market (equities) segment commenced
operation Nov. 1994 and operations in derivativessegment were started in June 2000.
�
NSE launched s&p CNX NIFTY
in April 1996.NSE isone largest interactive VSAT based stock exchange in the
world. Presently it supports 3000 VSATS.
8/6/2019 Indian Stock Market1
http://slidepdf.com/reader/full/indian-stock-market1 14/40
OBJECTIVE OF NSEOBJECTIVE OF NSE
Establishing nationwide trading facilities for all types of Establishing nationwide trading facilities for all types of
securities .securities .
Ensuring equal access to investors all over the country throughEnsuring equal access to investors all over the country throughan appropriate telecommunication network.an appropriate telecommunication network.
Providing fair , efficient & transparent securities market usingProviding fair , efficient & transparent securities market using
electronic trading system.electronic trading system.
Meeting international benchmark and standards.Meeting international benchmark and standards.
8/6/2019 Indian Stock Market1
http://slidepdf.com/reader/full/indian-stock-market1 15/40
NIFTYNIFTY
Nifty is an indicator of all the major companies Nifty is an indicator of all the major companies
of NSE.of NSE.
The Nifty index is a composite of the top 50The Nifty index is a composite of the top 50
stocks listed on the National stock exchange.stocks listed on the National stock exchange.
It is a simplified tool which helps investors &It is a simplified tool which helps investors &
ordinary people alike, understand whatordinary people alike, understand what
happens in the stock market & by extension,happens in the stock market & by extension,the economy.the economy.
8/6/2019 Indian Stock Market1
http://slidepdf.com/reader/full/indian-stock-market1 16/40
REGULATOR Y BODYREGULATOR Y BODY
SEBI ± Securities & Exchange Board of India
Established In 1992, As Per Securities & Exchange
Board Of India , Act. To Protect The Interests Of Investors
To Regulate The Securities Market.
To Promote The Development of the Securities
Market
8/6/2019 Indian Stock Market1
http://slidepdf.com/reader/full/indian-stock-market1 17/40
Listing means admission of securities toListing means admission of securities todealings on a recognised stock exchange. Thedealings on a recognised stock exchange. The
securities may be of any public limitedsecurities may be of any public limited
company, Central or State Government, quasicompany, Central or State Government, quasi
governmental and other financialgovernmental and other financialinstitutions/corporations, municipalities, etc.institutions/corporations, municipalities, etc.
The objectives of listing are mainly to :The objectives of listing are mainly to :
provide liquidity to securities; provide liquidity to securities;
mobilize savings for economic development;mobilize savings for economic development;
protect interest of investors by ensuring full protect interest of investors by ensuring full
disclosures.disclosures.
LISTING OF COMPANIES
8/6/2019 Indian Stock Market1
http://slidepdf.com/reader/full/indian-stock-market1 18/40
The Bombay Stock Exchange (BSE) has a dedicatedThe Bombay Stock Exchange (BSE) has a dedicatedListing Department to grant approval for listing of Listing Department to grant approval for listing of
securities of companies in accordance with thesecurities of companies in accordance with the provisions of the Securities Contracts (Regulation) provisions of the Securities Contracts (Regulation)Act, 1956, Securities Contracts (Regulation) Rules,Act, 1956, Securities Contracts (Regulation) Rules,1957, Companies Act, 1956, Guidelines issued by1957, Companies Act, 1956, Guidelines issued bySEBI and Rules, ByeSEBI and Rules, Bye--laws and Regulations of BSE.laws and Regulations of BSE.
BSE has set various guidelines and forms that need toBSE has set various guidelines and forms that need to be adhered to and submitted by the companies. These be adhered to and submitted by the companies. Theseguidelines will help companies to expedite theguidelines will help companies to expedite the
fulfilment of the various formalities and disclosurefulfilment of the various formalities and disclosurerequirements that are required at various stages.requirements that are required at various stages.
8/6/2019 Indian Stock Market1
http://slidepdf.com/reader/full/indian-stock-market1 19/40
Public IssuesPublic Issues
Initial Public Offering(IPO)Initial Public Offering(IPO)
Further Public Offering(FPO)Further Public Offering(FPO)
Preferential IssuesPreferential Issues
Indian Depository ReceiptsIndian Depository Receipts
Amalgamation Amalgamation
Qualified Institutions PlacementsQualified Institutions Placements
8/6/2019 Indian Stock Market1
http://slidepdf.com/reader/full/indian-stock-market1 20/40
A company intending to have its securities listed on BSE hasA company intending to have its securities listed on BSE has
to comply with the listing requirements prescribed by it. Someto comply with the listing requirements prescribed by it. Some
of the requirements are as under of the requirements are as under
Minimum Listing Requirements for New CompaniesMinimum Listing Requirements for New Companies
Minimum Listing Requirements for Companies already ListedMinimum Listing Requirements for Companies already Listed
on other Stock Exchangeson other Stock Exchanges
Minimum Requirements for Companies Delisted by BSEMinimum Requirements for Companies Delisted by BSE
seeking relisting on BSEseeking relisting on BSE
Permission to Use the Name of BSE in an Issuer Company'sPermission to Use the Name of BSE in an Issuer Company's
ProspectusProspectus
Submission of Letter of ApplicationSubmission of Letter of Application
8/6/2019 Indian Stock Market1
http://slidepdf.com/reader/full/indian-stock-market1 21/40
Allotment of Securities
Trading Permission
Requirement of 1% Security
Payment of Listing Fees
Compliance with the Listing Agreement
Cash Management Services (CMS) - Collection of
Listing Fees
8/6/2019 Indian Stock Market1
http://slidepdf.com/reader/full/indian-stock-market1 22/40
Some commonly used terms in stockSome commonly used terms in stockexchangeexchange
BidBid--Ask SpreadAsk Spread
TheThe bid bid price price isis thethe currentcurrent price price atat whichwhich buyers buyers areare willingwillingtoto buy buy aa stock stock.. TheThe ask ask price price isis thethe currentcurrent price price atat whichwhich
sellerssellers areare willingwilling toto sellsell..T
herefore,T
herefore, thethe bid bid--ask ask spreadspread isis thethedifferencedifference between between thethe bid bid price price andand thethe ask ask price price..
BlueBlue ChipChip StocksStocks
BlueBlue chipchip stocksstocks areare thethe onesones thatthat everyoneeveryone wantswants:: stocksstocks ininnationallynationally or or internationallyinternationally recognizedrecognized companiescompanies withwith aa proven proven recordrecord of of investmentinvestment returnreturn andand aa goodgood likelihoodlikelihood of of futurefuture profit profit..
8/6/2019 Indian Stock Market1
http://slidepdf.com/reader/full/indian-stock-market1 23/40
ShortShort TermTerm GainGain
TheThe termterm ShortShort TermTerm GainGain refersrefers toto thethe dividendsdividends receivedreceived by by anan investor investor onon stocksstocks thatthat havehave been been heldheld for for 1212 monthsmonths or or lessless..
OptionOption
TheThe rightright givengiven toto anan investor investor toto buy buy or or sellsell stocksstocks atat aa givengiven
price price prior prior toto aa deadline,deadline, after after whichwhich thethe optionoption expiresexpires.. ThereThereisis nono obligationobligation toto buy buy or or toto sellsell..
BearBear andand BullBull MarketsMarkets
AA bear bear marketmarket isis characterizedcharacterized by by generallygenerally downwarddownwardtrendingtrending prices prices whenwhen thethe sellingselling volumevolume isis highhigh.. Conversely,Conversely, aa
bull bull marketmarket isis whenwhen prices prices areare movingmoving upup andand everybodyeverybody isis ininaa buying buying moodmood..
8/6/2019 Indian Stock Market1
http://slidepdf.com/reader/full/indian-stock-market1 24/40
Stock Stock ValueValue
AccordingAccording toto investinginvesting guruguru WilliamWilliam Bernstein,Bernstein, thethe best best
immediateimmediate symbolsymbol for for aa stock'sstock's valuevalue isis itsits price, price, because because aa price price ostensiblyostensibly representsrepresents thethe overalloverall consensusconsensus of of thethe stock stock
market'smarket's appraisalappraisal of of thethe stock'sstock's truetrue valuevalue..
ShortShort SellSell
AA shortshort sellsell isis whenwhen anan investor investor sellssells aa stock stock thatthat hehe doesn'tdoesn'tyetyet own,own, withwith thethe intentionintention of of buying buying itit inin thethe futurefuture atat aa lower lower
price price.. ThisThis isis aa riskyrisky tradingtrading strategy,strategy, sincesince itit dependsdepends onon
futurefuture unknownsunknowns..
ArbitrageArbitrage
AnAn arbitragearbitrage isis aa transfer transfer of of assetsassets between between marketsmarkets by by sellingselling
aa particular particular stock stock onon oneone marketmarket andand buying buying itit onon another another
marketmarket..
8/6/2019 Indian Stock Market1
http://slidepdf.com/reader/full/indian-stock-market1 25/40
Dividend
A dividend is the money that is made from the investment. The
amount of dividend to be paid out on a stock is decided by the
company's Board of Directors, and is usually paid to investors on
a quarterly basis.
Volume
Volume is the measurement of the amount shares traded over a
given time period. In general, price movements that occur on high
volume are considered more significant than price movements thatoccur on low volume.
Mutual FundA mutual fund is a managed fund that invests in stocks, bonds and
other financial instruments. When an investor purchases shares in a
mutual fund, they gain exposure to all the instruments in which the
fund invests.
8/6/2019 Indian Stock Market1
http://slidepdf.com/reader/full/indian-stock-market1 26/40
THREE WAYS TO INVEST IN SH ARESTHREE WAYS TO INVEST IN SH ARES
PRIMARY MARKET:-
Where Company Directly Allots His Equity
Shares To Investors.
SECONDARY MARKET:- Where Allotted Share
in Public Issue Are Bought And Sold
by Investors With The Help Of Stock Brokers
at VariousStock Exchanges.
FUTURE & OPTIONS:- Its a derivative segment
of Underlying securities.
8/6/2019 Indian Stock Market1
http://slidepdf.com/reader/full/indian-stock-market1 27/40
PRIMAR Y MARKETPRIMAR Y MARKET
The primary market is where securities are createdThe primary market is where securities are created(by means of an IPO).(by means of an IPO).
Initial Public Offering (IPO) is the first sale of stock Initial Public Offering (IPO) is the first sale of stock
by a company to the public. by a company to the public.
A company can raise money by issuing either A company can raise money by issuing either debt or debt or equity. If the company has never issued equity to theequity. If the company has never issued equity to the
public, it's known as an IPO. public, it's known as an IPO.
This market is known as primary MarketThis market is known as primary Market
8/6/2019 Indian Stock Market1
http://slidepdf.com/reader/full/indian-stock-market1 28/40
SECONDAR Y MARKETSECONDAR Y MARKET
A market on which an investor purchases an assetA market on which an investor purchases an asset
from another investor rather than an issuingfrom another investor rather than an issuing
corporation.corporation.
In this market Brokers becomes intermediate bodyIn this market Brokers becomes intermediate body
between buyer and seller. between buyer and seller.
8/6/2019 Indian Stock Market1
http://slidepdf.com/reader/full/indian-stock-market1 29/40
FUTURES & OPTIONSFUTURES & OPTIONS
In finance,In finance, a security whose price is dependent upona security whose price is dependent uponor derived fromor derived from one or more underlying assets.one or more underlying assets.
The derivative itself is merely a contract between twoThe derivative itself is merely a contract between two
or more parties.or more parties.
ItsIts value is determinedvalue is determined by fluctuations by fluctuations in thein theunderlying asset.underlying asset. The most common underlyingThe most common underlying
assets includeassets include stocks, bonds,stocks, bonds, commodities,commodities, currencies.currencies.
8/6/2019 Indian Stock Market1
http://slidepdf.com/reader/full/indian-stock-market1 30/40
TYPES OF ORDERSTYPES OF ORDERS
ON MARKET ORDER
LIMIT ORDER
IMMEDIATE OR CANCEL (IOC) ORDER
STOP LOSS ORDER
TRAILING STOP LOSS ORDER
8/6/2019 Indian Stock Market1
http://slidepdf.com/reader/full/indian-stock-market1 31/40
Basic requirement forBasic requirement forInvesting in stocksInvesting in stocks
Demat AccountDemat Account
Saving Bank AccountSaving Bank Account
Permanent Account Number (PAN)Permanent Account Number (PAN) Trading Account with Recognized Stock Trading Account with Recognized Stock
Broker Broker
8/6/2019 Indian Stock Market1
http://slidepdf.com/reader/full/indian-stock-market1 32/40
8/6/2019 Indian Stock Market1
http://slidepdf.com/reader/full/indian-stock-market1 33/40
Trading AccountTrading Account
A Trading account is required if an individual wishesA Trading account is required if an individual wishes
to trade, i.e. buy and sell shares in the stock to trade, i.e. buy and sell shares in the stock
exchange.exchange.
A Trading account can also be opened with mostA Trading account can also be opened with most
banks and financial institutions, after filling up the banks and financial institutions, after filling up the
required forms and providing identity and addressrequired forms and providing identity and address
proofs. proofs.
8/6/2019 Indian Stock Market1
http://slidepdf.com/reader/full/indian-stock-market1 34/40
FACTORS INFLUENCING CH ANGE INFACTORS INFLUENCING CH ANGE INSTOCK PRICESTOCK PRICE
DEMAND & SUPPLYDEMAND & SUPPLY
PROFITSPROFITS
DIVIDENDSDIVIDENDS
BONUS SHARESBONUS SHARES
ECONOMIC NEWSECONOMIC NEWS
POLITICAL NEWSPOLITICAL NEWS
8/6/2019 Indian Stock Market1
http://slidepdf.com/reader/full/indian-stock-market1 35/40
SECTORS OF INVESTMENTSECTORS OF INVESTMENT
INFRASTRUCTURE i.e. metals/cement/energyINFRASTRUCTURE i.e. metals/cement/energy
CONSTRUCTION & ENGINEERINGCONSTRUCTION & ENGINEERING
AUTO & AUTO ANCILLARIESAUTO & AUTO ANCILLARIES
TEXTILESTEXTILES BANKING AND FINANCIAL SERVICESBANKING AND FINANCIAL SERVICES
CONSUMER GOODSCONSUMER GOODS
TECHNOLOGY AND TELECOMTECHNOLOGY AND TELECOM
RETAILINGRETAILING
PHARMACEUTICALS & HEALTHCAREPHARMACEUTICALS & HEALTHCARE
8/6/2019 Indian Stock Market1
http://slidepdf.com/reader/full/indian-stock-market1 36/40
REASON TO INVEST IN INDIANREASON TO INVEST IN INDIANSTOCK MARKETSTOCK MARKET
Fast growing economyFast growing economy
The Indian democracy allows for steady growth andThe Indian democracy allows for steady growth and
development in the country.development in the country.
Increased GDP; large foreign currency reserveIncreased GDP; large foreign currency reserve
Growing potential in the infrastructure sector andGrowing potential in the infrastructure sector and
multinational companies.multinational companies.
Strict monitoring and stringent rules by SEBI.Strict monitoring and stringent rules by SEBI. Easy accessibility and transparency in the marketEasy accessibility and transparency in the market
8/6/2019 Indian Stock Market1
http://slidepdf.com/reader/full/indian-stock-market1 37/40
STOCK MARKET WISDOMSTOCK MARKET WISDOM
INVEST FOR REAL RETURNSINVEST FOR REAL RETURNS
(Do what your passion is. If it's stocks, only then do it else look (Do what your passion is. If it's stocks, only then do it else look
for something else)for something else)
KEEP AN OPEN MINDKEEP AN OPEN MIND
(Don¶t fear about making mistakes but learn from the mistakes)(Don¶t fear about making mistakes but learn from the mistakes)
NEVER FOLLOW THE CROWD NEVER FOLLOW THE CROWD
(Respect others opinions but take your decisions)(Respect others opinions but take your decisions)
8/6/2019 Indian Stock Market1
http://slidepdf.com/reader/full/indian-stock-market1 38/40
8/6/2019 Indian Stock Market1
http://slidepdf.com/reader/full/indian-stock-market1 39/40
8/6/2019 Indian Stock Market1
http://slidepdf.com/reader/full/indian-stock-market1 40/40
AKANKSHA
PANDYA
ANUBHA
GUPTA
VISHAL
ARORA
TANMOY
DHARA
SHILPA
SABBERWAL
TH ANKING YOU ALL