INTRODUCTION TO STOCK MARKET
FEATURES OF STOCK MARKET
IMPORTANCE OF STOCK MARKET
FUNCTION OF STOCK MARKET
CLASSIFICATION OF STOCK MARKET
Stocks are issued by companies in order to raise capitals and are
bought by investors in order to acquire a portion of the company.
Stock exchange means anybody of individual
whether incorporated or not ,constituted for the
purpose of assisting ,regulating or controlling the
business of buying ,selling or dealing in securities “.
(Securities Contract (Regulation) Act ,1956)
Features of stock exchange
It is a place where securities issued by companies, govt. &
other authorities are purchased & sold.
Its area of operation or geographical jurisdiction is well
Its purpose is to assist & regulate buying & selling in
It operates as per rules 7 guidelines issued by the
Securities & Exchange Board Of India (SEBI).
Importance of stock exchange
Stock exchange is a organized securities market which provides sufficient
marketability to shares & debentures.
Stock exchange provide a reasonable measure of safety & fair dealing in the
buying & selling of securities.
It constitutes the prime centre through which bulk of investment activities
are conducted by individual & institutional operators.
Stock exchange play an important part to speed up the process of economic
in the country.
Stock exchange has been described as the pulse of the economy of the
Functions of Stock Exchange
Provide central and convenient meeting places for sellers and buyer of
Increase the marketability and liquidity of securities
Contribute to stability of prices of securities
Equalization of price of securities
Smoothen price movement
Help the investors to know the worth of their holdings
Promote the habit of saving and investment
Help companies and government to raise funds from the investors
Provide forecasting service
BOMBAY STOCK EXCHANGE
BSE Limited formerly known as Bombay Stock
Exchange (BSE) , is the oldest stock exchange in Asia.
It is a stock exchange located on Dalal Street, Mumbai.
The equity market capitalization of the companies listed.
on the BSE was US$1 trillion as of December 2012
It the 6th largest stock exchange in Asia and the 14th
largest in the world.
BSE was established in 1875 as “The Native Share & Stock Brokers”.
First Stock Exchange in the country to obtain permanent recognition in
1956 from GOI.
Around 4700 Indian companies listed with Stock Exchange.
As of 2012, it is among the five biggest Stock Exchanges in the world
in terms of transactions volume. As of March 2012, there are over
5,133 listed Indian companies and over 8,196 scrip's on the stock
exchange, the Bombay Stock Exchange has a significant trading
The BSE SENSEX, also called "BSE 30", is a widely used market
index in India and Asia.
NATIONAL STOCK EXCHANGE
The National Stock Exchange (NSE) is stock
exchange located at Mumbai, India.
It is the second fastest growing stock exchange in
the world with a recorded growth of 16.6%.
In the year 1991 Pherwani Committee
recommended to establish National Stock
Exchange (NSE) in India.
It is the 16th largest stock exchange in the world by market
capitalization and largest in India by daily turnover and number of
trades, for both equities and derivative trading.
NSE has a market capitalization of around US 985 billion and over
1,646 listings as of December 2012.
In National Stock Exchange there is trading of equity shares, bonds
and government securities.
NSE is mutually owned by a set of leading financial institutions,
banks, insurance companies and other financial intermediaries in India
but its ownership and management operate as separate entities.
In 2012, NSE was the third largest stock exchange in the world in
terms of the number of contracts (1221 million) traded in equity
Presently there are 24 stock exchanges in India, out of which 20 have
exchanges National Stock Exchange (NSE)
MULTI COMMODITY EXCHANGE
OF INDIA LTD (MCX)
Multi Commodity Exchange of India Ltd (MCX) is an independent
commodity exchange based in India
To facilitate online trading and clearing & settlement operations for
commodity futures across the country.
MCX hold’s market share of over 80% of the Indian commodity
MCX is the world largest exchange in Silver, second largest in Gold,
Copper and Natural Gas, and third largest in Crude Oil Futures
OVER THE COUNTER EXCHANGE OF
Incorporated in 1990, setup to aid enterprising promoters in raising
finance for new projects.
To provide investors with a transparent efficient mode of trading.
OTCEI introduced a screen based nation wide trading.
OTCEI introduced many novel concepts to the Indian capital markets
such as screen-based nationwide trading, sponsorship of companies,
market making and scrip less trading.
The first Indian stock exchange to introduce nationwide computerized
screen based trading.
A Bull Market indicates the constant
upward movement of the stock
A particular stock that seems to be
increasing in value is described to be
A bear market indicates the continuous
downward movement of the stock
Stock that seems to be decreasing in
value is described to be bearish.
A stockbroker is person who is licensed to trade in shares.
Brokers also have direct access to the share market and can act as an
agent in share transactions.
For this service they charge a fee i.e. brokerage.
They can also offer additional services like advice on shares,
debentures, government bonds and listed property trusts and non-
listed investment options
TRADING IN STOCK MARKET
The market regulator, the Securities and Exchange Board of India
(SEBI), has made it compulsory to open the demat account if you
want to buy and sell stocks.
A person want to buy/sell stocks in the stock market has to first
place his/her order with a broker or can do themselves using online
The stocks purchased will be sent to the your demat account. This
process is called Rolling Settlement Cycle.
The stock exchange is considered to be the barometer of economic
Stock exchange regulate and monitor trading activity
SEBI regulate the functions of stock exchange
Secondary market provides a platform for sale of already issued and