Stock market

Stock market

1. Presented By : Harsimran Kaur Kanchan Agrawal Tushita Majumdar Vibhor Agrawal Rohit Kumar Dhoba BBA 5 th Sem Group No. - 3

2. Presentation Outline Definition of Stock and Stock market Types Of Stock Exchange Stock exchange in World and India Trading In Stock Market Demat Account Stock Market Conditions Calculation of BSE Index Benefits of Investing in shares

3. 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. A Stock market is the place where buying and selling of stocks takes place. Nowadays due to internet and advanced technology buying and selling of stocks takes place anywhere in India and also from foreign country, there is no need to be physical present in exchanges like NSE and BSE. Stock markets are perfect competitive market.

4. Stock Exchanges in India There are 22 stock exchanges in India. But, two of them are biggest. NSE (National stock exchange) - is the 11 th largest stock exchange in the world by market capitalization (US $ 2.27 trillion ) and largest in India by and number of trades , for both equities and derivative trading. BSE (Bombay stock exchange) - is the oldest stock exchange in Asia with a rich heritage of over 137 years of existence and is the 9th largest stock exchange in the world

5. Bombay Stock Exchange Location: Mumbai Index: Sensex ( SENS itve ind EX) Consist of group of 30 Stock Date of Launch: 1 January 1986 Base period:1978-79 Base Index Value:100 Timing: 09.30 AM – 03.30 PM Listed Co. : 5629

6. National Stock Exchange Location: Mumbai Index: Nifty (National Stock Exchange Fifty) Consist of group of 50 Stocks Commenced operations : April 1994 Base period: 1993-94 Base index value: 1000

7. Stock Broker A stockbroker is person who is licensed to trade in shares. Brokers also have direct access to the share market and can act as your 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 (cash management trusts, property and equity trusts.

8. 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 trading systems. The stocks purchased will be sent to the your demat account. This process is called Rolling Settlement Cycle.

9. What is Demat account? DEMAT stands for DEMAT erialization. It is process in which physical paper shares are converted into paperless (computerized) form. In India there are two Depository organizations called NSDL (National Securities Depository Ltd.) &CDSL (Central Depository Services India Ltd.) Brokers and most of Banks provides facility to open demat account.

10. Important terms in stock market and in stock trading Open- The stock price in beginning of Day(i.e. in morning). High - The stock price reached at the highest level in a day. Low - The stock price reached the lowest level in a day.

11. Important terms in stock market and in stock trading Close - The stock price at which it remains after the end of market timings or the final price of the stock when the market closes for a day. Volume - Volume is nothing but quantity. Bid - The Buying price is called as Bid price. Offer - The selling price is called offer price.

12. Stock Market Conditions There are two ways to describe the general conditions of the stock market: BULL MARKET BEAR MARKET Bull Market - A Bull Market indicates the constant upward movement of the stock market. A particular stock that seems to be increasing in value is described to be bullish.

13. Stock Market Conditions BEAR MARKET A bear market indicates the continuous downward movement of the stock market. stock that seems to be decreasing in value is described to be bearish.

14. How Sensex Index is calculated The formula for calculating the sensex = (sum of Free Float Market capitalization of 30 benchmark stocks)* Index Factor Where; Index Factor = 100/market cap value in 1978-79.

15. Example on Sensex Index calculation Assume sensex has only 2 stocks namely SBI and RELIANCE. Total shares in SBI are 500 out of 200 are held by government and only 300 are available for public trading. Reliance has 1000 shares out of which 500 are held by promoters and 500 are available for trading. Assume price of SBI stock is Rs. 100 & Reliance is RS. 200.

16. Example on Sensex Index calculation Solution – Then Free Float Cap of these two company = (300*100+500*200) = 30,000+1,00,000 = 1,30,000 Assume market cap during the year 1978-79 was 25000 Then SENSEX = 1,30,000*100/25000 = 520

17. Benefits of investing in shares Possibility of increase in value of share Income from dividends Easy liquidity Tax benefits

18. Thank You.