brief description on stock market

1. STOCK MARKET
PRESENTED BY:
PRANAV KUMAR SINGH 15BSP0849
AAKASH KOTHARI 15BSP2154
VIVEK SHARMA 15BSP1474
NIKHIL SINGH 15BSP2289
RAHUL YADAV 15BSP0955

2. WHAT IS STOCK EXCHANGE?
 The securities regulation act of 1956 defined stock exchange as “an
association, organization, or a individual which is established for the purpose
of assisting, regulating, and controlling business in buying ,selling and dealing
in securities.”
 It is an organized and regulated financial market where securities (bonds,
notes, shares) are bought and sold at prices governed by the forces of demand
and supply.
 Stock exchanges basically serve as (1) Primary markets where corporations,
governments, municipalities, and other incorporated bodies can raise capital
by channeling savings of the investors into productive ventures; and
 (2) Secondary markets where investors can sell their securities to other
investors for cash, thus reducing the risk of investment and maintaining
liquidity in the system. Stock exchanges impose stringent rules, listing
requirements, and statutory requirements that are binding on all listed and
trading parties.

3. HISTORY OF STOCK EXCHANGE
 The stock exchange was established by “East India company” in 18th century .
In India it was established in 1850 with 22 stock brokers opposite to town hall
Bombay.
 There are now stock markets in virtually every developed and most developing
economies, with the world's largest markets being in the United states, United
kingdom, Japan, India, Pakistan, China, Canada, Germany , France, South
Korea and the Netherlands.

5. SECURITIES AND EXCHANGE
BOARD OF INDIA(SEBI)
 The SEBI was constituted on 12th April,1988 under a resolution of the
Government of India. On 31st january,1992,it was made a statutory body by
the Securities and Exchange board of India Act,1992.
The Companies (Amendment) Act,2000 has given certain powers to SEBI as
regards the issues and transfer of securities and non-payment of dividend.
 Objectives of SEBI
• To regulate the activities of Stock Exchange
• To protect the Rights of Investors
• To prevent fraudulent and malpractices
• To Regulate and develop a code of Conduct for Intermediaries

6. NATIONAL STOCK
EXCHANGE OF INDIA(NSE
OR NSEI)
 The NSE of India is the leading stock exchange of India, covering 370 cities
and towns in the country.
 It was established in1994 as a TAX company. It was established by 21 leading
financial institutions and banks like the IDBI, ICICI, IFCI, LIC,SBI,etc.
 It has 1693 number for listing companies.
 Features of NSEI
 Nation wide coverage i.e., investors from all over country
 Ring less i.e., it has no ring or trading floor
 Screen-based trading i.e., trading in this stock exchange is done electronically.
 Transparency, i.e. the use of computer screen for trading makes the dealings in
securities transparent.
 Professionalization in trading, i.e., it brings professionalism in its functions

7. NIFTY
 The CNX Nifty, also called the Nifty 50 or simply the Nifty, is National Stock
Exchange of India's benchmark stock market index for Indian equity market.
 Nifty is owned and managed by India Index Services and Products (IISL),
which is a wholly owned subsidiary of the NSE Strategic Investment
Corporation Limited.
 IISL had a marketing and licensing agreement with Standard & Poor's for co-
branding equity indices until 2013. The 'CNX' in the name stands for
'CRISIL NSE Index'.
 CNX Nifty has shaped up as a largest single financial product in India, with an
ecosystem comprising: exchange traded funds (onshore and offshore),
exchange-traded futures and options

8. BOMBAY STOCK EXCHANGE
 It is oldest and first stock exchange of
India established in the year 1875.
First it was started under banyan tree
opposite to town hall of Bombay over
22 stock brokers.
 No of listed companies 5459.
 Market capitalization $1.7 trillion as
on 23 Jan, 2015.

9. HOW TO DEAL AND INVEST IN STOCK
EXCHANGE
 In order to deal with a securities one as to have an account called Demat
a/c or Trading a/c.
 It is just like a bank account. Same procedure of opening the bank
account is followed to open the a/c.
 But all the banks does not give this facility of opening the account , only
few banks provide this facility.
 After demat a/c or Trading a/s is opened then the securities is bought and
sold. The banks which gives facility of demat a/c in India is
 ICICI Bank
 Citi Bank
 Bank of Baroda
 SBI
 HDFC

10. STOCK MARKET INDEX
 A stock market index is created by selecting a group of stocks that are capable of
representing the whole market or a specified sector or segment of the market.
 The change in the prices of this basket of securities is measured with reference to a
base period.
 There is usually a provision for giving proper weights to different stocks on the
basis of their importance in the economy.
 A stock market index act as the indicator of the performance of the economy or a
sector of the economy.
 The movement of the price in a market or a section of market are captured in price
indices called stock market indices.
 Such indices are market capitalization weighted, with the weight reflecting the
contribution of stock to index.
 Examples of index include Sensex, Nifty, DJIA, S&P500, Nikkie etc.

11. TYPES OF OPERATOR IN STOCK
EXCHANGE
 BROKER: He is one acts as a intermediary on behalf of others. A broker in a stock
exchange is a commission agent who transacts business in securities on behalf of non
members.
 JOBBER: He is not allowed to deal with the public directly .He deals with brokers who
are engaged with the investors . Thus, the securities is bought by the jobber from
members and sells to members who are operating on the stock exchange as broker.
 SPECULATION : It is the transaction of members to buy or sell securities on stock
exchange with a view to make profits to anticipated raise or fall in price of securities.
 SPECULATOR : The dealer in stock exchange who indulge in speculation are called
speculator . They do not take delivery of securities purchased or sold by them , but only
pay or rescue the difference between the purchase price and sale price . The different
types of speculators are
 BULL
 BEAR

12. STOCK MARKET CRASHES
 The stock market crash is often defined as a sharp dip in share price of equity
listed in the stock exchange.
 In parallel with the various economic factors, a reason for stock market crashes
is also due to panic and investing public’s loss of confidence.
 Famous stock market crashes have lead to loss of billions of dollars and wealth
destruction on a massive scale.
 Major crashes: Wall Street Crash of 1929
Crash of 2008–2009