What is stock market ?

What is the Stock Market ? 

          Introduction to stock market

This will help you to understand the basic concept of stock market, stock brokers ,different market participants and the regulatory body that regulate the stock market.

• Stock market

Stock market is a place where people buy/sell shares of publicly listed companies. It offers platform to facilitate seamless exchange of shares. In simple terms, if he wants to sell shares of Reliance Industry the stock market will help him to delete the Sailor who is willing to buy Reliance Industries. However, it is important to know that a person can trade in stock market only through registered intermediary known as stock broker. The buying and selling of shares through electronic medium we will discuss more about the stock broker at later a point.

• Major stock exchanges in India

there are too many stock exchanges in India where majority of the trade takes place first one in Bombay Stock Exchange (BSE) and the second one is National Stock Exchange (NSE). apart from these two exchanges there are some other regional stock exchanges like Bangalore stock exchange, Madras stock exchange it is about this exchanges do not play a meaningful roll any more.

• National stock exchanges (NSE)

NSE is the leading stock exchange in India where one can buy / sell shares of publicly listed companies . It was established in the year 1992 and is located in Mumbai . NSE has a flagship index named Nifty 5. The index comprises of the top 50  companies best donates trading volume and market capitalisation. this index is widely used by investors in India as well as globally as the parameter of Indian capital markets.

•Bombay Stock Exchange (BSE)

BSc is India's first as well as the oldest stock exchange in Indi. It was established in 1875 and located in Mumbai. it has total of 5295 Companies listed out of which 3972 are available for trading on August 21 2017. BSE sensex is a flagship index of BSE. it measures the performance of the 13 largest most liquid and financially stable companies across key sectors.

•Different market participants

there are lot of individuals and corporate house to trade in stock market. Anyone who buys sales sales in stock market is termed as market participants. Some of the categories of the market participants are as follows :

•Domestic retail participant - these are individual suit transact in markets.

• NRI's and over citizensof India- these are people who were live reside out of India.

• Domestic institutions- these are large corporate in Titans based in India for example LIC of India.

• Domestic Asset Management companies AMC- the market participants in the category would be mutual fund companies like HDFC AMC and SBI Mutual Fund, DSP blackrock and many more similar entities.

• Foreign institutional investors- FIIs Adnan Indian corporate entities such as foreign Asset Management Companies  , hedge funds and other investors.

Regulator of Indian stock market

• securities exchange Board of India

Securities exchange Board of India SEBI is the regulatory body of the Indian stock markets. The main objective of SEBI is to safeguard the interest of retail investors, promote the development of stock exchanges , and regulate the activities of financial intermediate and investors of market. SEBI ensures the following:

1. The stock exchanges BSE and NSE, broker sensor brokers conduct their business fairly.

2. Corporate houses should not use markets as a mean to unfairly benefit themselves.

3. Small retail investors interest is protected.

4. Large investors with huge cash should not manipulate markets.

In my next post we will discuss about types of financial intermediaries in the stock market of India.


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