Trading is a magic world which has the potential to take a person from rags to riches, or the other way around. To trade a specific market is dedicated in which shares of publicly held companies are issued and traded either through exchanges or over-the-counter markets known as “Stock Market”. When you invest in the stock market, the stock which you purchase in a certain company automatically gives you a partial ownership of that company. Also termed as the equity market, stock market is one of the most volatile components of a free-market economy. While stock market helps you trade financial elements like bonds, mutual funds, derivatives as well as shares of companies, a share market will only allows trading of shares.
Indian Stock Market
Overview:
India may appear a
tiny dot on the global map, but upon closer inspection, you will be glad to
discover the same things you would expect from any promising market. Although
investing in the Indian stock market is not everyone’s cup
of tea, the multi-billion Indian Stock Market however provides a great platform
for anyone with a good experience to reap the benefits out of the trading world.
Stock market
trading in India is mainly done in the National Stock Exchange (NSE) and the
Bombay Stock Exchange (BSE). If you are considering investing in this
particular market it is essential you have more than just knowledge of stock
market news. Apart from this you also need a sound knowledge of the
NSE, BSE and the Indian Economy as well. According to the recent sources,
after China, Indian stock markets emerged as the best performer with
a return of 30 per cent to investors during April-December period of the current
fiscal for 2014-15. Indian benchmark indices, BSE Sensex and NSE's Nifty, gave
a return of 29.9 per cent and 31.4 per cent respectively during April-December
period of 2014-15. Market analysts said that Indian markets rallied because of
huge inflows by overseas investors, after government announced several reform
measures.
Some Important
Terms in Indian Stock Market:
BSE and NSE
Most of the trading
in the Indian
stock market takes place on
its two prime stock exchanges: the Bombay Stock Exchange (BSE) and
the National Stock Exchange (NSE). The BSE has been in existence
since 1875. The NSE, on the other hand, was founded in 1992 and started trading
in 1994.
Trading Mechanism
Trading at both the
exchanges takes place through an open electronic limit order book, in
which order matching is done by the trading computer. There are no market
makers or specialists and the entire process is order-driven,
which means that market orders placed by investors are automatically matched
with the best limit orders.
Settlement Cycle
and Trading Hours
Equity spot markets
follow a T+2 rolling settlement. This means that any trade taking place on
Monday gets settled by Wednesday. All trading on stock exchanges takes place
between 9:55 am and 3:30 pm, Indian Standard Time (+ 5.5 hours GMT), Monday
through Friday.
Market Indexes
Market Indexes
Two prominent
Indian market indexes are Sensex and
Nifty. Sensex is the oldest market index for equities; it includes shares of 30
firms listed on the BSE, which represents around 45% of the index's
free-float market capitalization. Nifty includes 50 shares listed on
the NSE, which represent about 62% of its free-float market capitalization.
Market Regulation
The overall
responsibility of development, regulation and supervision of the stock market
lies with the Securities & Exchange Board of India (SEBI), which
was formulated in 1992 as an independent authority. SEBI has consistently tried
to lay down market rules in line with the best market practices.
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