2. - National Stock Exchange of India Limited id the leading
stock exchange of India located in Mumbai established in
1992.
- First dematerialized electronic exchange in the country.
- Providing for a Fair, efficient and transparent securities
market using electronic Trading system.
- Vikram Limaye is Managing Director & Chief Executive
Officer of NSE.
- Market capitalization of more than US$3 trillion.
- NSE (National Stock Exchange) was the first exchange in the
world to use satellite communication technology for trading,
using a client server based system called National Exchange
for Automated Trading (NEAT).
INTRODUCTION
3. Stock Market Overview
Best Large cap stocks in the
market
market
Revenue by
Program
• A stock market or equity market is a public entity for the
trading of company stock (shares) and derivatives at an
agreed price.
• These are securities listed on a stock exchanges as well as
those only traded privately.
• The stocks are listed and traded on stock exchanges
which are entities of a corporation or mutual organization.
Stock exchanges and stock indices
• Primarily, the stock exchange provides a trading platform for investors
to purchase securities. There are two major stock exchanges in India:
NSE (National Stock Exchange) and BSE (Bombay Stock Exchange).
A stock index measures the price changes of a specified group of stocks
or stocks of a specified sector
• The primary index of BSE is the Sensex, comprising of 30 stocks. NSE
has the Nifty Index consisting of 50 stocks. The BSE Sensex is older
and most widely followed. Both these indices are calculated based on
free-float market capitalization and contain heavily traded shares with
largest market capitalization from key sectors.
How are
stocks
traded?
Stockbroker
Brokerage
Firms
Daytrader
Bull and Bear Market
4. How the Stock Market Affects the Economy
The Two-Way Relationship between the Stock Market and the Economy:
1. WEALTH EFFECT: An increase in stock prices causes an increase in wealth, and consequently an
increase in consumer spending - Consumers
2. TOBIN-Q EFFECT: Investment is also affected by higher stock prices. With a higher stock price, a
firm can raise more money per share to finance investment projects - Business
Wealth effect:
• Positive relationship between stock price and household wealth.
• When stock prices rise, the household wealth also increases and vice versa.
• Typically, they increase their spending-consumption; multiplier effect
5. Stock prices and consumer spending:
• Tends to move in same direction as stock prices
• When stock prices rise, Autonomous consumption spending rises and Vice versa
• Rapid increase in stock prices can cause significant positive demand shocks to economy.
The wealth effect: Changes in stock prices, through the wealth effect, cause both equilibrium GDP and price level to
move in same direction:
• An increase in stock prices will raise equilibrium GDP and price level
• While a decrease in stock prices will decrease both equilibrium GDP and price level
In typical, expansion, higher profits and stockholder optimism cause stock prices to rise, Vice versa
6. • An ownership stake in a company
• Exclusivity in transactions
• Return on investment
• Good returns on investments in short time
• Right to vote
• Interests well-protected by regulatory bodies
• Contribution to economic growth
• Protection against inflation
• Easy to buy and sell
• Dividend income
• Diversification
• Tax benefits
• Convenience
PROS
• Volatile investments
• High brokerage and low margin
• Impulsive investment
• Lack of knowledge
• Time-consuming
• Subject to higher risk
CONS
7. Influencing Factors
Factors Affecting Indian Stock Market
Government
Policies
Monetary Policies
of RBI
Regulatory policies
of SEBI
FIIs and DIIs Economic
Numbers
Market Sentiments
8. 1. The Harshad Mehta
1992 Scam:
2. The Ketan Parekh
Scam:
3. The Satyam Scam:
Trading in a international stocks: Retail investors in India
may soon be allowed to trade in US stocks through a NSE
platform
Commodity options trading: SEBI finally allowed
commodity markets to start trading 'options' contracts. This
was first announced in the 2016 budget.
Instant redemption: You can now buy and sell Liquid Funds
instantly. However, this is only for amounts up to Rs 50,000
on a per-day basis. You can use e-wallets to buy Liquid Funds
up to Rs 50,000 per year.
IPO share allotments:: Investors are classified into different
categories. Each category has to follow its own set of rules
while investing in IPOs. NBFCs will now be classified as
‘Qualified Institutional Buyers’ (QIBs). Until now, banks and
insurance companies were classified as QIBs. Not all NBFCs
will be classified as QIBs, though
Scams involved in Stock Market Recent Reforms
