STOCK MARKET REPORT COMPREHENSION

Stock Market Trend

When a market sustains itself for a certain period of time, it is called a market trend

Market Trends

Bullish

Buoyant

Fervour

Fillip

Rally

Spurt

Surge

Boom

Jubilant

Limelight

Bearish

Sag

Listless

Plummet

Slump

Subdued

Dampened

Dwindled

Nose diving

panicky

Mixed

divergent

Erratic

Jumpy

Reasons behind Bullish Trend Large scale Buying Bull Support Bear Covering/Short Covering: The bear sells the

stocks or shares when the price is high, expecting it to fall. If it doesn`t fall by the date of delivery, then he buys them even at loss.

Replacement Buying: Bull keeps on buying the same number of shares of the same company as he has sold to earn more because the prices are still on a rise

Favourable Upcountry advice: Information from the other parts of the country and from the other markets

Political stability Encourging Economic News Investment Incentives Fall I Bank Rate

Reasons for Bearish Trend: Large Scale Selling Bear Support Bull Unloading/Liquidation: Bull

Unloading is selling of shares by the bulls even at a loss, when the prices fail to go up according to the expectations of the bull.

Political Instability Unfavourable Economic News

Investment Disincentives Heavy Taxation

Stock Market Indices

General movement of the market is measured by indices representation the entire market or important segment there of.

Stock Market Indices:

SensexBSE Sensitive Iindex

Movement of 30 sensitive shares.

Base year 1978-79 Base value 100

NiftyPrice value of 50 shares settled on the basis of

market capitalization and liquidity

Base Year-1995Base Value-1000

Equity Shares

Bonus Shares

Types of Securities

Listed• (Quoted Securities)• Only those securities that

are traded on the stock market)

Unlisted• Securities traded not

traded on the stock market

Listed Securities

Cleared

•Securities that could be bought of or and day at the prevailing price and can be delivered later•Forward shares•(Group-A)

Non-Cleared

•Unspecified shares sold on cash basis (Group: B)•Their list is cash-list

Prices of Securities

* Par Value: Value stated in the memorandum and

written on the scrip (Unregistered Securities)

* Issue Price:At which share is issued, usually higher than

par* Market Value: Price at which share is tradedAbove Par: Higher than face value or par

value

*Below Par:Lower than face value or par value

Comprehension of the stock Market MUMBAI: The Bombay Stock Exchange's

Sensex was witnessing a profit booking session after a rally in last session. According to analysts, the market uncertainty will continue in the near-term and investors will keenly await developments in European Union summit for direction. "At ~13x, valuations are below historical avg. and appear reasonable enough to hold but a long trade on mere valuations still not compelling. Inflation continues to remain at 9.5%, although slowing demand and a high base point to moderation in the near- to medium term.

Global macro concerns remain with good news (strong US data) regularly balancing the bad (another non-starter EU revival plan). Even if inflation does recede from here, and we end up being at the peak of the rate cycle, anything but a gradual dip in rates going forward would only be in response to a severe weakness in the economy, or a worsening turn in the global markets. We would not expect a cut in rates before the end of 1QFY13 under normal circumstances. This means that the investment cycle, already delayed by a year, is unlikely to kick-start in a hurry unless the Govt. fast-forwards its projects. Thus, the significant level of market uncertainty is unlikely to recede in the near-term, and the markets are likely to swing to the news flow," said Religare Securities report.

At 10 am; the Sensex was at 16747.33, down 99.50 points or 0.59 per cent. The 30-share index touched intraday low of 16739.05 and high of 16845.87.

The National Stock Exchange's Nifty was at 5023.55, down 26.60 points or 0.53 per cent. The broader index touched a high of 5049.70 and low of 5017.80 in trade so far.

BSE Midcap Index was down 0.01 per cent and BSE Smallcap Index edged 0.07per cent higher.

Amongst the sectoral indices, BSE Metal Index was down 0.81 per cent, BSE Bankex declined 0.63 per cent and BSE IT Index was 0.63 per cent lower. BSE Power Index moved 0.24 per cent higher and BSE Realty Index gained 0.22 per cent.

Tata Steel (-1.89%), Wipro (-1.61%), Hindalco Industries (-1.52%), Sterlite Industries (-1.51%) and ICICI Bank (-1.26%) were the major Sensex losers.

Jaiprakash Associates (1.41%), Bharti Airtel (1.27%), BHEL (1.01%), DLF (0.78%) and Mahindra & Mahindra (0.66%) were the top index performers.

Market breadth was flat on the BSE with 831 gainers against 827 losers.

Meanwhile, the Asian markets were witnessing a mixed session. Nikkei 225 was up 0.44 per cent, Shanghai Composite fell 0.63 per cent and Hang Seng moved 0.39 per cent higher.

Terms of the Passage

Profit-booking is encashing or realising the profit or gain in a share by selling it.

The Nikkei, is a stock market index for the Tokyo Stock Exchange (TSE). It has been calculated daily by the Nihon Keizai Shimbun (Nikkei) newspaper since 1950.

The Hang Seng Index (is a freefloat-adjusted market capitalization-weighted stock market index in Hong Kong. It is used to record and monitor daily changes of the largest companies of the Hong Kong stock market and is the main indicator of the overall market performance in Hong Kong. These 45 constituent companies represent about 60% of capitalization of the Hong Kong Stock Exchange.

The SSE Composite Index is an index of all stocks (A shares and B shares) that are traded at the Shanghai Stock Exchange.

Market capitalization (often market cap) is a measurement of the value of the voting ownership interest that shareholders hold in a business enterprise. It is equal to the share price times the number of shares outstanding (shares that have been authorized, issued, and purchased by investors) of a publicly traded company. As outstanding stock is bought and sold in public markets, capitalization could be used as a proxy for the public opinion of a company's net worth and is a determining factor in some forms of stock valuation. Preferred shares are not included into the calculation.

Indian markets closed on positive note for a third straight day on Friday as European markets shot up on the news that German Chancellor Angela Merkel defended the euro, which she said was stronger than Germany's former deutschemark, but with some riders and investors banked upon the anticipation the US jobs data will be good tonight. The markets, which was dull throughout day suddenly shot up, as European shares opened strong on the improved sentiments. Ahead of the European Union summit on Dec. 9, German Chancellor Angela Merkel told the country's Parliament that Europe is working toward tighter fiscal union, and promised concrete steps to meet that goal.

All sectoral indices closed on positive note with bank, power, metal and IT stocks were major gainers. Tata Power rose 5% as the company's shares gained sharply in the late session after the investors tried for bottom fishing, however the company outlook was downgraded by S&P from positive to stable. Kingfisher Airlines reversed early losses and closed 3.6% higher after its Chairman Vijay Mallya said that he was still in talks with an Indian investor to raise funds. While Hathway Cables and Den Networks rose 7.6% and 3.4%, respectively, after a newspaper report said the government could increase foreign direct investment limit in the distribution platforms to 74% from 49% currently.

- Market breadth was strong at as investors bought large cap stocks. FIIs bought equities worth Rs.5.96bn while domestic institutions sold equities of Rs.1.07bn.- Asian markets are mostly up as hopes rose for progress in curbing Europe's debt crisis.- We expect a positive opening for the Indian markets, following the cues from the Asian markets. However, investors may take some profits from the past rally. 

1. Sentiment: The feeling or tone of a market (i.e. crowd psychology). It is shown by the activity and price movement of securities.

2. Foreign Institutional Investor - FII

An investor or investment fund that is from or registered in a country outside of the one in which it is currently investing. Institutional investors include hedge funds, insurance companies, pension funds and mutual funds.

Terms:

3. Foreign Direct Investment – FDI An investment abroad, usually where the company being invested

in is controlled by the foreign corporation. 4. Hedge Fund An aggressively managed portfolio of investments that uses

advanced investment strategies such as leveraged, long, short and derivative positions in both domestic and international markets with the goal of generating high returns (either in an absolute sense or over a specified market benchmark).

Legally, hedge funds are most often set up as private investment partnerships that are open to a limited number of investors and require a very large initial minimum investment. Investments in hedge funds are illiquid as they often require investors keep their money in the fund for at least one year.

Sensex near day's low; Tata Steel, ICICI Bank, Wipro down

MUMBAI: The Bombay Stock Exchange's Sensex continued to remain under pressure as wary traders booked profits ahead after a sharp rally and ahead of European Union summit. Lack of cues from Asian peers also kept the bulls under check. At 11:15 am; the Sensex was at 16720.37, down 126.46 points or 0.75 per cent. The 30-share index touched intraday low of 16711.08 and high of 16845.87. The National Stock Exchange's Nifty was at 5008.10, down 42.05 points or 0.83 per cent. The broader index touched a high of 5049.70 and low of 5006.70 in trade so far.

   

"The short term trend has turned very strong as after a long time of consolidation. Nifty future has managed to close above its 50-day EMA of 5028 which is a good sign. This rally could further extend to (5240 / 17400) levels if we hold above the first resistance level of 5120. Strong support is seen at 4980 and weakness could be seen only below 4940, till then any decline in the market is a buying opportunity," said Nirmal Bang report.

BSE Midcap Index was up 0.07 per cent and BSE Smallcap Index edged 0.17 per cent higher.

Amongst the sectoral indices, BSE Metal Index was down 1.19 per cent, BSE Bankex declined 0.80 per cent and BSE FMCG Index was 0.69 per cent lower. BSE Power Index moved 0.42 per cent higher and BSE Capital Goods Index gained 0.17 per cent.

Tata Steel (-2.11%), Hindalco Industries (-1.77%), Sterlite Industries (-1.55%), ICICI Bank (-1.52%) and Wipro (-1.45%) were the major Sensex losers.

BHEL (1.65%), Jaiprakash Associates (0.74%), DLF (0.72%), NTPC (0.52%) and Maruti Suzuki (0.36%) were the top index performers.

 

DLF has received the first tranche of Rs 200 crore from IDFC, which is in the process of acquiring 100 per cent shareholding in a JV company of DLF called Galaxy Mercantile. The JV company is the owner of a 1.3 million sq ft IT Park in the Delhi suburb of Noida.

Market breadth was flat on the BSE with 1153 gainers against 1059 losers.

Meanwhile, the Asian markets were witnessing a mixed session. Nikkei 225 was up 0.52 per cent, Shanghai Composite fell 0.67 per cent and Hang Seng moved 0.34 per cent higher.

Terms:

Exponential Moving Average - EMA A type of moving average that is similar to a simple moving average, except that more weight is given to the latest data. The exponential moving average is also known as "exponentially weighted moving average".

Mid Cap A company with a market capitalization between $2 and $10 billion, which is calculated by multiplying the number of a company''''s shares outstanding by its stock price. Mid cap is an abbreviation for the term "middle capitalization".

Intraday Another way of saying "within the day". Intraday price movements are particularly important to short-term traders looking to make many trades over the course of a single trading session. The term intraday is occasionally used to describe securities that trade on the markets during regular business hours.

Small Cap Refers to stocks with a relatively small market capitalization. The definition of small cap can vary among brokerages, but generally it is a company with a market capitalization of between $300 million and $2 billion.

5. Large Cap - Big Cap A term used by the investment community to refer to companies with a market capitalization value of more than $10 billion. Large cap is an abbreviation of the term "large market capitalization". Market capitalization is calculated by multiplying the number of a company's shares outstanding by its stock price per share.

6. Market Capitalization The total dollar market value of all of a company's

outstanding shares. Market capitalization is calculated by multiplying a company's shares outstanding by the current market price of one share. The investment community uses this figure to determining a company's size, as opposed to sales or total asset figures.

7. Credit Tranche A system used by the International Monetary

Fund (IMF) to govern its lending activities to member countries. When a member nation applies for a loan to help with balance of payment difficulties, the IMF will disperse the loan in a series of credit tranches. Tranches are a portion of the loan that is released upon the member country fulfilling conditions or requirements set forth by the IMF.

Read more: http://www.investopedia.com/terms/

Sensex volatile; realty, capital goods, banks down  MUMBAI: The Bombay Stock Exchange's Sensex,

witnessing a volatile session, slipped back in the negative terrain as profit booking picked up near resistance levels. Negative European markets also kept the bulls under check. According to dealers, the market trend is still bearish and rallies may fizzle out at higher levels.

Meanwhile, the Gross Domestic Growth for second quarter ended September was in line with forecast. Q2FY12 GDP grew at 6.9 per cent vs 7.7 per cent in Q1 and against expectations of 6.8 per cent.

At 2:30 pm; the Sensex was at 15951.53, down 56.81 points or 0.35 per cent. The 30-share index touched intraday low of 15849.57 and high of 16179.56.

The National Stock Exchange's Nifty was at 4784.26, down 20.85 points or 0.43 per cent. The broader index touched a high of 4851.55 and low of 4754.80 in trade so far.

BSE Midcap Index was down 1.06 per cent and BSE Smallcap Index slipped 0.86 per cent.

Amongst the sectoral indices, BSE Realty Index was down 1.72 per cent. BSE Capital Goods Index fell 1.52 per cent, BSE Bankex was down 1.27 per cent and BSE Auto Index declined 1.21 per cent. BSE FMCG Index was up 0.39 per cent and BSE Oil&gas Index moved 0.31 per cent higher

Tata Motors (-4%), ICICI Bank (-3.16%), Sterlite Industries (-2.88%), Jaiprakash Associates (-2.06%), and Mahindra & Mahindra (-1.52%) were amongst the major Sensex losers.

Sun Pharmaceuticals (1.80%), Bajaj Auto (1.66%), ONGC (1.63%), Tata Consultancy Services (1.14%) and Hindustan Unilever (1.07%) were the top Sensex gainers.

Market breadth was negative on the BSE with 996 gainers against 1608 losers.

Meanwhile, the European markets have opened in the red. FTSE 100 was down 0.68 per cent, DAX fell 0.94 per cent and CAC 40 slipped 0.61 per cent.

Terms:

1.DAX A stock index that represents 30 of the largest and most liquid German companies that trade on the Frankfurt Exchange. The prices used to calculate the DAX Index come through Xetra, an electronic trading system. A free-float methodology is used to calculate the index weightings along with a measure of average trading volume.  

2. FTSE A company that specializes in index calculation. Although not part of a stock exchange, co-owners include the London Stock Exchange and the Financial Times.

3. Consumer Advisory Council - CAC A legislative body established by Congress in 1976. The Consumer Advisory Council consists of 30 members who advise the Federal Reserve Board on issues involving consumer financial services such as the availability of credit and other financial issues that affect consumers. Members of the council serve a three-year term that is spread out over time. The CAC’s responsibility is to advise the board on issues relating to the Consumer Credit Protection Act. Council meetings are held three times a year in Washington, D.C., and are open to the public.

1. Sentiment: The feeling or tone of a market (i.e. crowd psychology). It is shown by the activity and price movement of securities.

2. Foreign Institutional Investor - FII

An investor or investment fund that is from or registered in a country outside of the one in which it is currently investing. Institutional investors include hedge funds, insurance companies, pension funds and mutual funds.

BourseA market organized for the purpose of buying and selling securities, commodities, options and other investments. A bourse is more commonly known as a stock exchange. The word "bourse" is based on the house, belonging to Van der Burse, where merchants would gather and trade with one another.

Points1. A 1% change in the face value of a bond or a debenture.2. In futures contracts, a price change of one one-hundredth, or 1% of one cent.3. A $1 price change in the value of common stock.4. In real estate mortgages, the initial fee charged by the lender, with each point being equal to 1% of the amount of the loan. It can also refer to each percentage difference between a mortgage's interest rate and the prime interest rate.

Blue Chip Shares:   A nationally recognized, well-established and

financially sound company. Blue chips generally sell high-quality, widely accepted products and services. Blue chip companies are known to weather downturns and operate profitably in the face of adverse economic conditions, which helps to contribute to their long record of stable and reliable growth.