Indian Share Market

Indian Share Market started functioning from 1875. The name of the first share trading association in India was Native Share and Stock Broker's Association which later came to be known as Bombay Stock Exchange (BSE). This association kicked of with 318 members.

Indian Share Market mainly consists of two stock exchanges :-

Bombay Stock Exchange (BSE)
National Stock Exchange (NSE)
Bombay Stock Exchange (BSE)

Bombay Stock Exchange is the oldest stock exchange not only in India but in entire Asia. Its history is synonymous with that of the Indian Share Market history. BSE started functioning with the name, The Native Share and Stock Broker's Association in 1875. It got Government of India's recognition as a stock exchange in 1956 under Securities Contracts (Regulation) Act, 1956. At the time of its origin it was an Association of Persons but now it has been transformed to a corporate and demutualised entity.BSE is spread all over India and is present in 417 towns and cities. The total number of companies listed in BSE is around 3500.

Bombay Stock Exchange's trading system is popularly known as BOLT (BSE's Online Trading System). It makes the trade efficient, transparent and time saving. In BSE, the trades that takes place are :-

Equity or Shares

Derivatives (Futures and Options)

Debt Instruments

The main index of BSE is called BSE SENSEX or simply SENSEX. It is composed of 30 financially sound company stocks which are liable to be reviewed and modified from time-to-time. The index calculation is done on the methodology of “Free-float Market Capitalization” method. This method is also followed by the leading bourses like Dow-Jones. During early 1990s it was at 1000 mark, 5000 in 1999, and 8000 in September 2000 but at the time of writing the article (30.05.07) it is hovering around 14500. The credit behind this meteoric rise of the Indian bourse goes to the pro-market New Economic Policy adopted by the government in July, 1991. This momentum of SENSEX reflects the splendorous performance of Indian Inc. and the consequent success story of the Indian economy.

National Stock Exchange (NSE)

National Stock Exchange (NSE) is the leading most stock exchange in India in terms of totalvolume traded. It is based in Mumbai but has its presence in over 1500 towns and cities. In terms of market capitalization, NSE is the second largest bourse in Sought Asia.National Stock Exchange got its recognition as a stock exchange in July 1993 under Securities Contracts (Regulation) Act, 1956.

The products that can be traded in NSE are :-
Equity or ShareFutures (both index and stock)
Options (Call and Put)
Wholesale Debt Market
Retail Debt Market

NSE provides its customers with a fully automated screen based trading system known as NEAT system with speedy, efficient and transparent transactions. The stocks are hold in a demutualised format helping in fast, transparent and efficient preservation and transactions. The risk management system of National Stock Exchange is of highest quality and can be used as a benchmark for other bourses.

NSE's leading index is Nifty 50 or popularly Nifty and is composed of 50 diversified benchmark Indian company stocks. Nifty is constructed on the basis of weighted average market capitalization method.

Regulatory Authority of Indian Share Market

SEBI or Securities and Exchange Board of India is entitled to protect the investors' interests, regulate and develop securities market in India. It passes laws for streamlining the Indian share market for efficient outcomes

Portfolio investments of the Foreign Institutional Investors (FIIs) are increasing steadily which shows increasing reliance of the FIIs on the Indian Share Market.The upbeat mood of the Indian bourses got a trip because of the infamous Harshad Mehta Scam. He had fraudulently diverted huge sum of money from the banks and manipulated 270 million shares and causing mayhem for the small investors and BSE was on its knees shedding 570 points in a day.

But with the introduction of online trading system and high end risk management facilities the chances of scams and fraudulent practices has been reduced sharply. This has led to increased investor confidence on the market and consequently helped in mopping up the volume of trade of the Indian bourses.

Indian Share Market is the reflection of the overall performance of the Indian Corporates and is seeing new highs regularly. So, it is in an upbeat mood. Economists predict that the economy will be growing around 10% in the near future and we hope to see more and more bullish trends in the due course of time. Hence, Indian Share Market along with the Indian Inc. is signaling positive signs to the investors for a robust growth trajectory.