4. FinancialMarkets
A Financial Market is a Market in which people trade
Financial Securities Commodities Value
at
Low Transaction Costs Prices that reflect Supply & Demand
6. FinancialMarkets
The Financial Market is a broad term describing any marketplace where trading of
Securities
Equities
Bonds Currencies
Derivatives
happens
including
14. Stock Market
01
04
03
02
A place where shares of pubic
listed companies are traded
The primary market is where companies float
shares to the general public in an initial public
offering (IPO) to raise capital
It facilitates stock brokers to trade company
stocks and other securities. A stock may be
bought or sold only if it is listed on an exchange
The meeting place of the stock buyers and
sellers. India's premier stock exchanges are
the BSE and the NSE
16. StockMarket:
Importance
•Stock market is an important part of
the economy of a country.
•The stock market exists so that
companies can raise money without
incurring any debt (such is the case of a
loan).
•Company issue shares to the public in
what is known as an Initial Public
Offering (IPO).
•If there are more people buying a
stock than people selling it, the price
goes up with the demand.
20. BullMarket
A ‘bull market’ refers to a market that is on the rise. There is a
sustained increase in market share prices.
Investors often have faith that the uptrend will continue over the
long term. Typically, in this scenario, the country's economy is
strong and employment levels are high.
21. Bear Market
A ‘bear market’ is a general decline in the stock market over a
period of time. Share prices are continuously dropping, resulting
in a downward trend.
Investors anticipate losses and selling increases. Typically, the
economy will slow down and unemployment will rise.
36. Index
Index is a tool which
measures change.
Example : Consumer Price
Index measures Inflation.
Also Human Development
Index measures development
of a country.
37. StockMarket Index
• More than 7000 Companies are listed on BSE
and NSE.
• Measuring the performance of each stock is
tough and its difficult to infer anything from it.
• Stock Market Index measures the performance
of the Stock Exchange.
• Market Index: Similar stocks are grouped
• Basis: Market Capitalization, Sector, Stock Price
etc.
38. Stock Market Index
Value of the grouped Stocks = Collective Value of Index.
Therefore, any change in the value of these group of stocks,
changes the value of the Index.
40. Calculationof IndexValue
Each stock has a different price and so
each stock has different weightage in the
Index.
Example: 5 stocks forms an Index ‘Z’
A= Rs.1000 (20%)
B= Rs.2000
C= Rs.500
D= Rs.700
E= Rs.800
Total= Rs.5000
A= Rs.1200 (~22%)
B= Rs.1900
C= Rs.700
D=Rs.700
E= Rs.900
Total= Rs.5400
Stock Market Index