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Stockmarket
The document provides information about the Indian stock market including key stock indices like the BSE Sensex and NSE Nifty. It discusses the top companies comprising these indices by weightage. It also covers topics like stock exchanges, depositories, transaction processes, factors affecting stock prices, and different types of trading. The document provides an overview of important stock market concepts for investors.
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- 3. STOCK EXCHANGES ININDIA BSE NSE
- 4. BSE SENSEX 30 â˘Started on 01 January, 1986 ⢠Value-weighted index ⢠Consists of the 30 largest and most actively traded stocks
- 5. Name of companyWeightage RIL 13.10 Infosys Tech 9.37 L&T 8.44 ICICI Bank 7.67 HDFC 5.71 ITC 5.46 Bharti Airtel 4.87 HDFC Bank 4.64 SBI 4.13 ONGC 3.67 BHEL 3.26 HUL 2.50 TCS 2.25 Tata Steel 1.88 Tata Power 1.78 Name of Company Weightage Maruti Suzuki 1.75 Sterlite Industries 1.71 Grasim Industries 1.69 NTPC 1.69 RCOM 1.61 Jaiprakash Associates 1.60 M&M 1.56 Wipro 1.53 Reliance Infra 1.49 DLF 1.41 Hero Honda 1.25 Tata Motors 1.22 Hindalco 1.09 Sunpharma 0.82 ACC 0.75
- 6. NSE NIFTY 50 The50 stocks that were most favored by institutional investors in the 1960s and 1970s.
- 7. Name of companyWeightage RIL 11.23 Infosys Tech 8.02 L&T 7.23 ICICI Bank 6.58 HDFC 4.89 ITC 4.67 Bharti Airtel 4.17 HDFC Bank 3.98 SBI 3.53 ONGC 3.15 BHEL 2.87 HUL 2.14 TCS 1.93 Tata Steel 1.61 Jindal Steel 1.58 Tata Power 1.53 Name of Company Weightage Maruti Suzuki 1.50 Axis Bank 1.48 Sterlite Industries 1.46 Grasim Industries 1.45 NTPC 1.45 RCOM 1.38 M&M 1.34 Wipro 1.31 Reliance Infra 1.27 DLF 1.21 Unitech 1.19 GAIL 1.19 Hero Honda 1.07 Tata Motors 1.04 Idea Cellular 1.01 Cipla 1.00
- 8. Name of company Weightage Hindalco 0.93 Cairn0.90 Rel Capital 0.79 SAIL 0.75 PNB 0.71 Sun Pharma 0.70 ACC 0.64 Ambuja Cement 0.64 Siemens 0.61 ABB 0.61 BPCL 0.52 Name of Company Weightage HCL Techno 0.50 Power Grid 0.49 Reliance Pow 0.46 Suzlon Energy 0.44 Ranbaxy Lab 0.39 Tata Comm 0.27 NALCO 0.22
- 9. HOW THE INDICESARE CALCULATED? 1. Find out the âfree-float market capâ of all the 30 companies that make up the Sensex! 2. Add all the âfree-float market capâsâ of all the 30 companies! 3. Make all this relative to the Sensex base. The value you get is the Sensex value!
- 10. Depository A bank orcompany which holds funds or securities deposited by others, and where exchanges of these securities take place. ⢠National Securities Depository Limited ⢠Central Depository Services Limited
- 11. Depository Participant In India,a Depository Participant (DP) is described as an agent of the depository. They are the intermediaries between the depository and the investors.
- 12. Transaction Process (How ToStart Trading And Investing) ⢠We need to have a DEMAT account. ⢠We need to have a Trading account. ⢠And of course money ď
- 13. Rules for earningmoney in the market ⢠Rule 1: Never lose your money in the market. ⢠Rule 2: Never forget Rule 1.
- 14. Settlement Procedure For CashMarkets ⢠Settlement is done on T+2 basis for cash markets. ⢠Trades entered in to on a particular day are settled on third day. ⢠Eg. If u purchase shares on Monday, the settlement day would be Wednesday.
- 15. FACTORS AFFECTING STOCK MARKET â˘Economic Factors ⢠Market trends & Rumours ⢠Global Market indicators ⢠Govt Policies and Regulations ⢠Company wide factors
- 16. Classification of Companies SectorCapitalisation Groups
- 17. Sectoral Indices ⢠Realty â˘PSU ⢠Auto ⢠Power ⢠Consumer Durables ⢠Oil & gas ⢠Bankex ⢠FMCG ⢠Capital Goods ⢠Metal ⢠Teck ⢠IT
- 18. Capitalisation ⢠Large Cap- Above 750 cr. ⢠Mid Cap : Between Rs 75 cr. and Rs 750 cr. ⢠Small Cap : Below Rs. 75 cr.
- 19. Groups ⢠A :It is the most tracked class of scripts consisting of about 216 scripts. ⢠B ⢠S ⢠T : Traded on trade to trade basis. ⢠Z : companies which have failed to comply with its listing requirements.
- 20. Control Mechanism ⢠Circuitis the price limit or range, outside which the stock price can't go. ⢠For example, let's say closing price of X stock yesterday was 100 Rs. The applicable circuit limit for X is 5%. In this circumstances, the price of X can't go above 105 (5% above previous close) and below 95 (5% below previous close).
- 21. Why IPOâs? ⢠RaiseCapital to meet working capital, debt repayment, expansion, and a host of other uses. ⢠Company valuations are done on the basis of which the share value is calculated. ⢠It is offered to all categories of investors like Retail Investors, Private Placements, FIIâs, Mutual funds, LIC,GIC
- 22. IPOâs ⢠Issue iseither brought as a book building issue which is priced at a price band OR is brought at fixed price ⢠Companyâs have to file DRHP(Draft red herring prospectus) with Sebi as a guide line. ⢠After DRHP the IPO is given ratings by ICRA & CRISIL depending on the valuations, business risk, future growth policies of the company, Investor risk appetite.
- 23. IPO â GreyMarket ⢠Before listing of IPO there is a market value which exists amongst the brokers who do business in GREY MARKET were the premiums are predefined depending on the demand and supply availability ⢠This orders are booked in advance and settled on the date of listing and the difference if any is settled in cash ⢠Highest ever Grey market premium for any IPO was for Reliance Power which was 100%
- 24. Kinds of Trading â˘Intra-day Trading ⢠Delivery based Trading
- 25. Intraday Trading ⢠Buyingand Selling on the same day. ⢠Brokerage will be different for intra-day and delivery based trading, intra-day being lesser
- 26. Delivery Trading ⢠Buyingand Selling are on different days ⢠Brokerage will be higher than intra-day ⢠Delivery charges
- 27. Short Selling ⢠Sellingthe shares which you donât have ⢠Ex: Lets consider a company Reliance ⢠Its priced at Rs 1,000/-. You know itâs going to fall that day because of some reason. But you donât have any shares with you of Reliance. ⢠But still you can sell the shares, this is called as short selling.
- 28. Short Covering ⢠Assumeyou sold 10 RIL shares in morning at Rs 10,000/- and by evening as you had thought, it had Fallen down to Rs 9,000/- ⢠Now you buy back those 10 shares what you had sold. ⢠So the difference in amount per share 10,000 â 9,000 = 1,000 ⢠100 * 10 = 1000, Profit is yours. ⢠This process of buying back is called Short covering.
- 29. Consequences if notcovered ⢠You will become a defaulter. ⢠Lets understand this with an Example. ⢠Assume you short sold on Monday, as you havenât short covered it, you need to deliver it on Wednesday(T + 2). But you donât have the shares to deliver. So NSE or BSE will buy the shares on behalf of you in auction market, and deliver it to the buyer in (T + 3 days). ⢠You will have to pay penalty
- 30. How to SelectStocks ⢠Fundamental Analysis ⢠Technical Analysis
- 31. What is FundamentalAnalysis? ⢠Analyzing a stock based on the fundaments of the country, the sector, and the company individually. ⢠It includes going through balance sheet and profit-loss statement of the individual company and checking various ratios. ⢠Analyzing a stock based on the fundaments of the country, the sector, and the company individually. ⢠It includes going through balance sheet and profit-loss statement of the individual company and checking various ratios.
- 32. What is Technicalanalysis ⢠Forecasting the future direction of prices through the study of past market data, primarily price and volume
- 33. Basics in Technicalanalysis Support Resistance Stop Loss
- 34. Effects on Pricesof Shares:- ⢠Bonus ⢠Split ⢠Right Issues ⢠Buyback
- 35. Foreign Markets ⢠Dowjones â˘Nasdaq ⢠Nikkei ⢠Shanghai
- 36. Derivatives ⢠NSE isthe largest derivatives exchange in India ⢠Derivatives contracts have a maximum of 3months expiration cycle ⢠Contracts are available for trading with: 1 month 2month 3 months expiry ⢠Turnover of derivatives market is 75,000cr.
- 37. Derivatives Scrip Name LotSize Margin Total Ambuja Cements 4124 Rs 88,913/- Rs 4,08,276/- Hindalco 3518 Rs 1,05,311/- Rs 3,59,891/- Reliance 150 Rs 65,147/- Rs 2,97,750/- Reliance Power 2000 Rs 72,410/- Rs 3,20,000/- Suzlon 3000 Rs 83,280/- Rs 2,85,450/-
- 38. Premium & Discount ScripName Spot Price Future Price Pre/Disc Suzlon 95.25 95.15 0.10 Discount Reliance 1980.85 1985.10 4.25 Premium Hindalco 104.10 102.30 1.80 Discount Nifty 4619 4621 2 Premium
- 39. M2M adjustments ⢠Assume, â˘You Bought 1 lot of Suzlon (i.e 3000 Shares @ 100/- = 300000/-) ⢠Margin money Rs 60000/- (i.e @ 20% of 300000/-) ⢠Now on the Other day if Price Goes down to 90/- ⢠Then you will have to pay M2M loss of Rs 10/- per share i.e Rs 30000/- ⢠And If the Price increases to 110/- then we will get M2M profit credited in our A/c. ⢠i.e Now we will get the M2M profit Rs 60000/- Credited in our A/c
- 40. Options ⢠Call Optionâ An option to buy is called Call Option ⢠Example: ⢠Price of Reliance in Cash markets is 1000/- ⢠Price in Futures is 1020/- ⢠Trader will not block his money in cash markets ⢠Rather he will buy a call option in futures market ⢠Pay the premium of Rs30 per share
- 41. ContdâŚâŚ ⢠If theprice in cash markets ⢠Price of Call Option also (vice versa)
- 42. Hedging ⢠Hedging meansinsuring against a negative event ⢠It is done to reduce exposure to various risks ⢠Hedgers try covering the risks ⢠Hedgers try to reduce the risks associated with uncertainty
- 43. ⢠Infosys bagsa deal worth $ 100000 from US Company ⢠Rate of $ is Rs 48/- ⢠Amount to be realised after 2 months ⢠But Infosys estimates Dollar will fall to Rs 44/- ⢠Hence to reduce the loss Infosys will Hedge its Position by selling $ 100000 in Future Markets Hedging Example
- 44. ⢠After Twomonths Infosys gets the Payment ⢠Dollar price is Rs 44/- ⢠So Infosys will bear a loss of Rs 4 per $ in Cash Markets ⢠and will gain a Profit of Rs 4 per $ in Future Markets ⢠In this way Infosys have Reduced the Risk of $ Price Fluctuation Hedging Example
- 45. Speculation ⢠Opposite ofhedging ⢠Speculators are risk lovers ⢠Speculators make bets or guesses ⢠A hedger seeks to cover a foreign exchange risk ⢠A speculator accepts and seeks out to accept it to make profit
- 46. Example⌠⢠Speculator believesPrice of foreign currency ⢠Purchases the currency ⢠Holds it ⢠Resale later ⢠Profit on each unit of foreign currency
- 47. Arbitrage ⢠When thefutures price deviates substantially from its fair value arbitrage opportunities arise Spot Markets(Cash) Futures Purchase@1000/- Sell@1025/- Hold for 1 month The spot and futures price converge Closes@1015/- Closes@1015/- Profit booking of Rs.15 Profit booking of Rs.10
- 48. How a stockprice changes
- 49. Things to beavoided while trading & investing ⢠Never risk more than 10% of your trading capital in a single trade. ⢠Always use stop loss orders.( Here you should know your loss you can give in a situation where the trade starts going against you.) ⢠Never do overtrading. ⢠Don't enter a trade if you are unsure of the trend.
- 50. Attributes of goodinvestors ⢠One should be a good Manager and not day trader. ⢠A well diversified portfolio. ⢠Investment in good shares. ⢠Have patience.