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Presented By :
Aditya Bhujbal M-3005Sushant Gawali M-3010Pritam Jadhav M-3013 Nikhil Kurle M-3025Kaustubh Patil M-3038
LOGO
LOGO
A, B, C,… of Stock Market
Stock Market Indices
Aditya
Pritam Jadhav M-
3013
Agenda
The Stock Market is a very broad term which involves trading of variety of entities.
This presentation provides basics of some of the terms & understanding of stock market indices at macro level.
In this we will focus on BSE, NSE, NIFTY, SENSEX.
Introduction to stock
About Stock Market
History of stock market indices
Introduction of stock market indices
Why do we need stock market indices?
Stock index calculation
Types stock market indices
A stock is a small share that represents a partial ownership of a company.
Stocks are issued by companies in order to raise capital.
Stock is also referred to as equity, & it is limited to particular number of shares.
Introduction to Stock
About Stock Market
“Stock market” is a term used to describe the physical location where the buying and selling of stocks take place.
The correct term to be used in pertaining to the physical location for trading stocks is “stock exchange.”
The Stock market in India consists of about approx. twenty two stock exchanges.
The stock exchanges constitute a market where securities issued by the Central & State Govt., Public bodies & Joint Stock companies are traded.
The early history of stock market indices
Stock market indices are vital to macroeconomists as well as to actors in the financial world, indices consistently build on the long term are essential to assess those regularities that help understanding the actual behavior of financial actors, the evolution of the economy and its position in international comparisons.
Stock market indices : INTRODUCTION
• A stock market index tracks the movement of a market as a whole. Other indices track the performance of sectors, regions and different class of security.
• The basic data used to calculate an index are securities prices, but the calculation of an index means weighting price changes appropriately to reflect company size and the availability of securities to investors.
Why do we need Stock market indices?
1. They provide a historical comparison of returns on money invested in the stock market against other forms of investments such as gold or debt.
2. They can be used as a standard against which to compare the performance of an equity fund.
3. It is a lead indicator of the performance of the performance of the overall economy or a sector of the economy.
Stock index calculation
• Index level = Σ(P1 * Q1) / Σ(P0 * Q0)* Base index value.
P1 = Current value securities Q1 = No.of currently outstanding shares
P0 = Base period price of securities
Q0 = Base period quantity of securities
Types of stock market indices
• Free float capitalization weighted indices
• Price weighted indices
• Fundamentally based stock indices
KP
Kaustubh Patil M-3038
• NATIONAL STOCK EXCHANGE (NSE)• BOMBAY STOCK EXCHANGE (BSE)• STOCK MARKET INDICES- NIFTY DOW JONES FTSE INDEX
LOGO
LOGO
INTRODUCTION
• MUMBAI BASED STOCK EXCHANGE• LARGEST STOCK EXCHANGE• MARKET CAPITALIZATION- 47,01,923 CRORE• MOST SIGNIFICANT
FEATURES
• OWNED BY SET OF FINANCIAL INSTITUDE, BANKS, INSURANCE COMPANY
• FOREIGN INVESTMENT• WIDE RANGE• 2ND LARGEST STOCK MARKET IN SOUTH ASIA• 3RD LARGEST IN WORLD• 2ND FASTEST GROWING IN WORLD• GROWTH- 16.6%
INNOVATINS
• Setting up the first clearing corporation "National Securities Clearing Corporation Ltd." in India.
• Co-promoting and setting up of National Securities Depository Limited, first depository in India
• Setting up of S&P CNX Nifty.• Being the first and the only exchange to trade GOLD ETFs
(exchange traded funds) in India.• NSE has also launched the NSE-CNBC-TV18 media centre in
association with CNBC-TV18.• NSE.IT Limited, setup in 1999 , is a 100% subsidiary of the
National Stock Exchange of India
MARKETS
Currently, NSE has the following major segments of the capital market:
• Equity• Futures and Options• Retail Debt Market• Wholesale Debt Market• Currency futures
LOGO
LOGO
BOMBAY STOCK EXCHANGE (BSE)
INTRODUCTION
• OLDEST STOCK MARKET IN ASIA• ESTABLISHED AS “NATIVE SHARE & STOCK
BROKER ASSOCIATION”• PERMANENT RECOGNISATION• MAJORE ROLE
FEATURES
• GROWTH OF INDIAN CORPORATE SECTOR• LINKED WITH MAJORE CORPORATE• NUMBER 1 EXCHANGE IN TERMS OF LISTED
COMPANY• WORLDS 5TH IN HANDLING TRANSACTION
THROUGH ELECTRONIC TRADING SYSTEM• MARKET CAPITALIZATION- $1.6 TRILLION• POPULAR STOCK MARKET INDEX- SENSEX
INNOVATION
• 1ST NATIONAL LEVEL STOCK EXCHANGE TO LAUNCH WEBSITE IN VARIOUS LANGUAGE
• SUCCESSFULLY LAUNCHED A REPORTING PLATFORM FOR CORPORATE BOND
• IN 2006 LAUNCHED DIRECTORS DATABASE AND ICERS TO FACILITATE INFORMATION AND INCREASE TRANSPARENCY
LOGO
LOGO
NIFTY
INTRODUCTION
• The S&P CNX Nifty, or simply Nifty, is the leading index for large companies on the National Stock Exchange of India. It consists of 50 companies representing 24 sectors of the economy, and representing approximately 47% of the traded value of all stocks on the National Stock Exchange of India. "
FEATURES
• The average total traded value for the last six months of all Nifty stocks is approximately 77% of the traded value of all stocks on the NSE
• Nifty stocks represent about 61% of the total market capitalisation as on August 31, 2004.
• Impact cost of the S&P CNX Nifty for a portfolio size of Rs.5 million is 0.10%
• S&P CNX Nifty is professionally maintained and is ideal for derivatives trading.
DOW JONES INDEX
• World's most popular stock market indices.• It tracks the performances of 30 important ant
stocks in America. • Most famous international American
companies included are Bank of America, Dupont, Cococola,Microsoft, Pfizer etc
• There are companies from every important sectors like Information technology, Computers, Banking, Pharmaceuticals etc.
FTSE Index
• FTSE index is managed by FTSE Group, • There are various indices in FTSE like FTSE100,
FTSE 30etc. • These indices primarily reflect the
performance of London Stock Exchange• FTSE 100 is an index which tracks the
performance of top 100 companies. • It reflect 80 percent market capitalisation of
LSE.
Aditya
Nikhil Kurle M-3025
LOGO
LOGO
Launched in the year 1986.
BSE Sensex is a value-weighted• index composed of 30 stocks.
SENSEX is a basket of 30 • constituent stocks.
SENSEX-The Barometer of Indian
Capital Market
Cont……
The base period of SENSEX is 1978- 79 and the base value is 100 index points.
SENSEX is calculated every 15 seconds.
SENSEX is calculated using the "Free-float Market Capitalization" methodology.
SENSEX Milestone
25th July 1990 15th Jan 1992
29th Feb 1992
11th Feb 2000
7th Feb 2006
30th Oct 2006
Cont….
6th July 2007
9th Oct 2007
15th Oct 2007
29th Oct 2007
21th Jan 2008
02th March 2010
BSE INDEX FAMILY
BSE 100 BSE 200 BSE 500 BSE Mid capand BSE small cap
BSE PSU
Base Year 1983-84 1989-90 Feb. 1, 1999 2002-2003 February 1,1999
Base IndexValue
100 100 100 1000 1000
Date ofLaunch
Jan. 3, 1989
May 27, 1994
Aug. 9, 1999 April 11, 2005 June 4, 2001
Number ofscrips
100 200 500 Variable torepresent 15%and 5% marketcapitalisation
The BSE is asub set of 500index. BSE-500index
Indexcalculationfrequency
Real Time
Real Time Real Time Real Time Real Time
Aditya
Aditya Bhujbal M-3005
NSE INDEX FAMILY
• S & P CNX Nifty• CNX Nifty Junior• CNX 100• S & P CNX 500• CNX Midcap• Nifty Midcap 50• S & P CNX Defty
What is Stock?
A stock is a small share that represents a partial ownership of a company.
Stocks are issued by companies in order to raise capital.
Stock is also referred to as equity, & it is limited to particular number of shares.
How Stocks are priced?
Latest Change 52 Weeks
symbol
price net % time high low volume high low
BCE 31.15 -0.5 -1.5 16:57 31.75 31.1 3,643,000 33 27.2
BGM 17.06 -0.3 -1.6 15:54 17.3 17 207,400 26.9 17.1
IBM 79.82 -0.3 -0.4 16:01 80.68 79.6 4,999,200 99.1 71.9
MSFT 24.67 -0.3 -1.2 16:00 25.05 24.7 73,696,700 27.9 23.8
First Column indicates abbreviation of name of company.
Latest Price indicates current price or closing price of the day (if in newspaper)
Change (net) is difference between the previous day closing price & current stock quote.
Stock Quote Table
How Stocks are priced?
Latest Change 52 Weeks
symbol
price net % time high low volume high low
BCE 31.15 -0.5 -1.5 16:57 31.75 31.1 3,643,000 33 27.2
BGM 17.06 -0.3 -1.6 15:54 17.3 17 207,400 26.9 17.1
IBM 79.82 -0.3 -0.4 16:01 80.68 79.6 4,999,200 99.1 71.9
MSFT 24.67 -0.3 -1.2 16:00 25.05 24.7 73,696,700 27.9 23.8
High indicates the highest price while low indicates lowest price of the stock sold.
Volume describes the no. of shares traded for that day.
The 52- week high & low shows the highest & lowest prices in the previous year.
Stock Quote Table
How Stocks are priced?
PE – Price to Earning ratio. Price per share divided by earning per share.
What is P/E Ratio?
• Definition – “ Price/Earnings ratio. The most common
measure of how expensive a stock is. The P/E ratio is equal to a stock's market capitalization divided by its after-tax earnings over a 12-month period.”
P/E Ratio is calculated as:
eg. If a company is currently trading at $43 a share and earnings over the last 12 months were $1.95 per share. $43 ..
$1.95= $ 22.05
Security Name Close (Rs.) EPS PE
20 MICRONS 40.55 0.93 43.42
3I INFOTECH 73.65 9.40 7.83
3M INDIA 2,041.20 57.66 35.40
AARTI DRUG 90.35 12.43 7.27
AARTI INDS 44.50 11.01 4.04
AARVE DENIM 56.65 1.05 53.85
ABAN OFFSHOR 1,183.10 59.69 19.82
Security Name Close (Rs.) EPS PE
ABAN OFFSHOR 1,180.50 59.69 19.78
ABB 794.75 16.74 47.49
ACC 922.95 85.58 10.78
ADANI ENTER 486.00 6.60 73.65
ADITYA BIRLA 840.85 13.34 63.03
AKRUTI CITY 484.95 37.15 13.05
ALLAHA.BANK 132.65 17.21 7.71
Sushant Gawali M-3010
Role of Stock Exchange in economy
1. Raising capital for businesses2. Mobilizing savings for investment3. Facilitating company growth4. Redistribution of wealth5. Corporate governance
6. Creating investment opportunities for small investors7. Government capital-raising for development projects8. Barometer of the economy9. Regulation of companies10. Employment Opportunities
Growing job opportunities
Two basic analytical methodology
• Fundamental analysis maintains that markets may misprice a security in the short run but that the "correct" price will eventually be reached. Profits can be made by trading the mispriced security and then waiting for the market to recognize its "mistake" and reprice the security.
• Technical analysis maintains that all information is reflected already in the stock price, so fundamental analysis is a waste of time. Trends 'are your friend' and sentiment changes predate and predict trend changes. Investors' emotional responses to price movements lead to recognizable price chart patterns. Technical analysis does not care what the 'value' of a stock is. Their price predictions are only extrapolations from historical price patterns.
6 Steps of Investment in Share Market
Step 1
Step 3
Step 4
• Developing the vision
•Tips and Hot stocks are risky
Step 2
•Simplicity
Step 6
Step 5
•Consistency in Investment
• Passions
• Start Early
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