Embed Size (px)
Citation preview
Presented By Number 1 Stock Market Education
Institute in Mumbai
Dhanashri Academy
A stock market is a physical place, where
brokers gather to buy and sell stocks and
other securities. It is also known as a stock
exchange. A stock market enables the trading
– buying and selling - of stocks. In some
places, stock markets (Not Stock Exchange)
still have a fixed location, but in the modern
internet and technological world which we now
live in, it can be a
contd…..
Contd….
…network of computers enabling buying
and selling of stocks at agreed prices.
INTRODUCTION
Sensex is an index, an index is basically
an indicator. It gives you a general idea
about whether most of the stock shave
gone up or most of the stocks have gone
down. The sensex is an indicator of all
the prices of the major companies of the
BSE(Bombay stock exchange)
contd…
Contd…
The SENSEX, short form of the BSE-Sensitive
Index, is a "Market Capitalization-Weighted“ index of
30 stocks representing a sample of large, well-
established and financially sound companies. It is
the oldest index in India and has gained a unique
place in the collective awareness of investors. The
index is widely used to measure the performance of
the Indian stock markets.
contd…
Contd…
SENSEX is considered to be the pulse of the
Indian stock markets. As the oldest index of the Indian
Stock market, it offers time series data over a fairly long
period of time.
(since 1978-79).
HOW SENSEX IS CALCULATED-
Sensex is calculated using a
“market- capitalization weighted”
methodology. As per this methodology,
the level of index at any point of time
reflect the total market value of 30
components stock relative to a base
period. (the market capitalization of a
company is determined by multiplying
the price of its stock by the number of
shares issued by the company).
Contd…
This market
capitalization is again
multiplied by the free-float
factor to determine the free-
float market capitalization.
OBJECTIVES OF SENSEX
The Sensex is the benchmark index
of the Indian Capital Markets with wide
acceptance among individual investors,
institutional investors, foreign investors and
fund managers. The objectives of Sensex are
following:
To measure market movements
Benchmark for funds performance
For index based derivative products
A. TO MEASURE MARKET MOVEMENTS
Given its long history and its wide
acceptance, no other index matches the
SENSEX in reflecting market movements
and sentiments. SENSEX is widely used
to depict the mood in the Indian Stock
markets.
B. BENCHMARK FOR FUNDS PERFORMANCE
The inclusion of blue chip
companies and the broad and balanced
industry representation in the SENSEX
makes it the ideal benchmark for fund
managers to compare the performance
of their funds.
C. FOR INDEX BASED DERIVATIVE PRODUCTS
Institutional investors,
money managers and small investors all
refer to the Sensex for their specific
purposes The Sensex is in effect the
substitute for the Indian stock markets.
The country's first derivative product i.e.
Index-Futures was launched on SENSEX
GRAPH SHOWING THE PERFORMANCE OF
SENSEX
NIFTY
Nifty is an indicator of all the
major companies of NSE. The Nifty index
is a composite of the top 50stocks listed
on the National stock exchange. It is a
simplified tool which helps investors &
ordinary people alike, understand what
happens in the stock market & by
extension, the economy.
BOMBAY STOCK EXCHANGE
The BSE or Bombay stock exchange sensitive Index is a value weighted index. Composed of 30stocks with the base April 1979=100.
It consists of the 30largest and most actively traded stocks, representative of various sectors, on the BSE.
These companies account for around one fifth of the market capitalization of the BSE.
Contd…
The index has increased by over13 times from
June 1990 to today. using information from April
1979 onwards the long run rate of return on the
BSE sensex can be estimated to be 0.52%per
week (continuously compounded) with a
standard deviation of 3.67%.this translates to
27%per annum, which translate to roughly 18%
pa after compensating for inflation.
NATIONAL STOCK EXCHANGE
The NSE of India limited was created on the
basis of the report of the high powered study
group on establishment of new stock
exchanger, which recommended promotion of
NSE by financial institution to provide access to
investors from all across the country on an
equal footing.
In 1992, NSE was incorporated as a tax paying
company unlike other stock exchange in the
country.
Contd…
The capital market (equities) segment commenced
operation Nov. 1994 and operations in derivatives
segment were started in June 2000.
NSE launched s & p CNX NIFTY in April 1996.NSE is
one largest interactive VSAT based stock exchange
in the world. Presently it supports 3000 VSATS.
In April 1993,NSE was recognized as a stock
exchange under the securities contract(regulation)
act,1956.
OBJECTIVE OF NSE
Establishing nationwide trading facilities for all types of securities .
Ensuring equal access to investors all over the country through an appropriate telecommunication network.
Providing fair , efficient & transparent securities market using electronic trading system.
Meeting international benchmark and standards.
MELT DOWN OF SHARE MARKET
Inflation in India is high, this will make production
cost high and net profit down of companies .
Unstable political condition –Left parties threatening
to withdraw support to the government and this
cause a re-election and instability due to nuclear
deal.
contd…
Contd…
International fuel price-Increasing fuel price is
another reason for fall, this cause production cost
high for companies.
Slow down US growth , due to this many US
investors withdraw their money from Indian market.
WHAT ARE THE TOPMOST COMPANIES IN
SENSEX?
Top Five Sensex Stocks Weight %
Reliance Industries 13.52
Infosys Technologies 9.74
ICICI Bank 7.20
Larsen and Toubro 7.13
HDFC Ltd 5.27
CONTD…
Top Five Sensex Sectors Weight % #
Finance 22.15
Oil and Gas 17.51
Information Technology 14.58
Capital Goods 10.28
FMCG 7.46
