The origin of the share market date to around 400 years ago. Around 1600, there was a Dutch East India Company, in the country called the Netherlands, the same as the East India Company in Great Britain. They publicly invited individuals to invest in their ships, which would embark on long journeys to visit foreign lands and return with treasures. They promised the investors a share of the profits generated by the treasures. Today Every country is dependent on the stock market. The Indian Stock Market is a place where investors come to buy and sell shares of companies listed on the exchange.
What is Share Market, Share Bazar, or Indian Stock Market?
The stock market, share market, or equity market all mean are same, these are the market where you can buy or sell a company’s shares. Buying shares of a company means buying some percentage of ownership of that company, holder of the portion of that company. You would receive a percentage of the profit if your shareholding company makes a profit and also bear a percentage of any loss the company experiences.
Stock Exchanges in India?
A Securities Exchange is a place where we can trade buy, and sell securities stocks and bonds of the companies. Stock Exchange works as an intermediate between the public and the company. In India, there are 2 major stock exchanges BSE and NSE.
BSE aka Bombay Stock Exchange oldest stock exchange in South Asia and the tenth in the world. Established in 1875, located on Dalal Street in Mumbai, India. With the market cap. of US$3.6 trillion as of Sept 2021, BSE is the 6th largest stock exchange in the world. Over 5400 companies are listed in BSE.
NSE aka National Stock Exchange established in 1992, is located in Mumbai. With the market cap. of US$3.1 trillion as of May, NSE is the 10th largest stock exchange in the world. More than 2,000 companies are listed in NSE.
Indian Stock Market Indices
The Sensex and Nifty are the two major stock market indices in India. Investors and fund managers use the Sensex and Nifty as a benchmark for investment decisions and asset allocation to provide an overall picture of the financial health of the country’s economy. Both Sensex and Nifty are crucial indicators of the Indian economy and use to track the stock market’s performance.
The SENSEX and Nifty 50 are market indices that reflect the performance of the largest and most active companies listed on the BSE and NSE respectively. The SENSEX tracks the market capitalization of 30 stocks while the Nifty 50 tracks 50 stocks.
What is SEBI?
The Government of India established SEBI (Securities and Exchange Board of India) in 1988 to protect the interests of investors in securities and to advance the growth of the securities market in India.
SEBI’s primary responsibilities include regulation of stock exchanges, mutual funds, and other securities market intermediaries, as well as enforcement of securities laws and regulation of insider trading. It also regulates the issuance and listing of securities and enforces compliance with disclosure and investor protection requirements.
SEBI works towards creating a fair, transparent, and efficient securities market in India, and its aim is to promote investor confidence and encourage market development. The organization also provides education and awareness to investors and market participants and takes steps to prevent fraudulent and unfair trade practices in the securities market.
In short, SEBI plays a crucial role in ensuring the smooth functioning of the securities market in India and safeguarding the interests of investors.
What are CDSL and NSDL?
CDSL and NSDL are both depositories in India that hold electronic records of securities transactions. They are part of India’s effort to move towards a more efficient, secure, and transparent system of holding securities.
Central Depository Services Limited (CDSL) was established in 1999 as the first depositary in India, and was promoted by the Bombay Stock Exchange (BSE). It holds electronic records of securities transactions of various financial instruments, including stocks, bonds, and derivatives.
The National Stock Exchange of India promoted the establishment of the National Securities Depository Limited (NSDL) in 1996, which was the first electronic securities depository in India. It holds electronic records of securities transactions in a variety of financial instruments, including equities, bonds, government securities, and mutual funds.
Both CDSL and NSDL provide a secure and efficient way for investors to hold and transfer their securities, making it easier for them to manage their portfolios and reducing the risk of fraud and errors.
How to Buy Shares in India?
For individuals interested in the stock market and want to invest here is a step-by-step guide on how to buy shares online in India.
Who decides Share Market Stock Prices, How stock goes up & down?
A vast network of market participants including individuals, institutions, and government entities control the stock market, not a single entity. A variety of factors can influence stock prices, including economic indicators, changes in interest rates, earnings reports, analyst recommendations, global events, and even public sentiment.
The price of a stock increases when more people show interest in buying it due to the actions of buyers and sellers in the market. Conversely, if there is more supply than demand, the price will go down. This dynamic interplay between supply and demand determines the price of a stock at any given moment.
Investonomy: The Indian Stock Market Guide