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STOCK
EXCHANGE
Place where trading of shares is done in
terms of sale and purchase.

Corporation or mutual organization which

provides "trading" facilities for stock
brokers and traders, to trade stocks and
other securities.
STOCK
EXCHANGE
The Contra (Regulatio Act 195
ct n) , 6
Securities
[SCRA]
Defi nes
“Stock Exchange as any body of
individuals, whether incorporated or not,
constituted for the purpose of assisting,
regulating or controlling the business of
buying, selling or dealing in securities”.
ist of Stock Exchanges In
India
Bombay Stock
Exchange National
Stock Exchange
Regional Stock
Ahmadabad Stock
Exchanges Ludhiana Stock Exchange
Exchange Bangalore Stock Madhya Pradesh Stock
Exchange Bhubaneshwar Exchange Madras Stock
Stock Exchange Calcutta Exchange
Stock Exchange Cochin Magadh Stock
Stock Exchange Exchange Mangalore
Coimbatore Stock Stock Exchange
Exchange Delhi Stock Meerut Stock Exchange
Exchange Guwahati Stock OTC Exchange Of India
Exchange Hyderabad Pune Stock Exchange
Stock Exchange Jaipur Saurashtra Kutch Stock
Stock Exchange Exchange Uttar Pradesh
Stock Exchange Vadodara
The Role of a Stock Exchange in
buying and selling shares

The Securities and Exchange Board of India

(SEBI), provide a
trading platform

where buyers and sellers can meet to transact

in
securitie
s.
The trading platform provided by the stock
exchange is an electronic one.
There is no need for buyers and sellers to
meet at a physical location to trade.
Participants in the Securities
Market

Issuers of securities

Investors in securities

Intermediaries, such as merchant

bankers, brokers etc
 SEBI and its role
The Securities and Exchange Board of
(SEBI
India
)
Section 3 of SEBI Act, 1992

STATUTORY POWERS

(a) Regulating the securities market

(b) Protecting the interests of investors in securities

(c)Promoting the development of the securities

market
 The Securities and Exchange Board of India
(SEBI)
It has powers
for:
 Regulating the business in stock exchanges and
any other securities markets
 Registering and regulating the working of stock
brokers, sub–brokers etc.
 Promoting and regulating self-regulatory
 organizations Prohibiting fraudulent and unfair
 trade practices Calling for information from,
undertaking inspection,
conducting inquiries and audits of the stock
exchanges, intermediaries, self – regulatory
organizations, mutual funds and other persons
Demutualisation of stock
exchanges

Demutualisation refers to the legal structure

of an

exchange whereby the ownership, the

management and the trading rights at the

exchange are segregated from one another.

Demutualised stock exchanges in
India
Currently , two stock exchanges in India

National Stock Exchange (NSE)

Over the Counter Exchange of

India (OTCEI)
National Stock Exchange
(NSE)

The National Stock Exchange of India was promoted by

leading Financial institutions at the behest of the
Government of India.

Incorporated in November 1992 as a tax-paying

company

In April 1993, it was recognized as a stock exchange

National Stock Exchange
(NSE)

Mr. RAVI NARAIN Managing Director

NSE commenced operations in the

Wholesale Debt Market (WDM) segment in June

1994 The Capital Market (Equities) in

November 1994 Derivatives segment

commenced in June 2000

In October 1995, National Stock Exchange became the

largest stock exchange in the country
National Stock Exchange
(NSE)

In October 2007, the equity market capitalization of the

companies listed on the NSE was US$ 1.46 trillion,
making it the second largest stock exchange in South
Asia

The third largest Stock Exchange in the world

in terms of the number of trades in equities

It is the second fastest growing stock exchange in the

world with a recorded growth of 16.6%
National Stock Exchange
(NSE)
Innovations

Setting up the first clearing corporation

"National Securities Clearing Corporation Ltd." (NSCCL)
in India

C o-prom oting and setting up of National

Securities Depository Limited, fi rst depository in
India

NSE pioneered commencement of Internet Trading in

February 2000
B eing the first and the only exchange to trade
G OLD ETFs (exchange traded funds) in India
National Stock Exchange
(NSE)

Markets

C urrently, NSE has the following m ajor segm ents

of the capita market:

Equity
Futures and Options
Retail Debt Market
Wholesale Debt
Market C urrency
futures.
Etc

NSE is also launched Interest rate futures contracts on Aug

31 2009
National Stock Exchange
(NSE)
Certifi cations

NSE also conducts online examination and awards

certifi cation, under its programmers of NSE's
Certifi cation in Financial Markets (NCFM)
Currently, certifi cations are available in 19 modules,
covering
different sectors of financial and capital markets

Some examination and awards certifi cation like :-

Financial Markets: A Beginners'

Module Mutual Funds : A
Beginners Module Securities
Market (Basic) Module Capital
Bombay Stock
Exchange
The oldest market not only in the country, but also in
Asia.

BSE is the fi rst stock exchange in the country which

obtained permanent recognition (in 1956) from the
Government of India under the Securities Contracts
(Regulation) Act 1956

It migrated from the open outcry system to an online

screen- based order driven trading system in 1995
Bombay Stock
Exchange

BSE is corporatized and demutualised entity

incorporated under the provisions of the Companies
Act, 1956, pursuant to the BSE (Corporatization and
Demutualisation) Scheme, 2005 notified by the Securities and
Exchange Board of India (SEBI)

BSE is the world's number 1 exchange in terms of the

number of listed companies and the world's 5th in
transaction numbers
SENSE
X
and

NIFTY
?

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Market Capitalisation (market
cap)

Market cap or market capitalization is simply the

worth of a company in terms of it’s shares.

which is calculated by :-

Market capitalization =
Current share price (market price) * number of shares issued
by the company
(Out
Example standing)
:-
Company A has 120 shares in issue. The current
market price is Rs. 100.
The market capitalisation of company A is Rs. 12000.
 MARKET
INDICES

Stock market indices are the barometer of the stock

market.

BSE SENSEX,NSE-50 etc are some of the market indices

It gives you a general idea about whether most of the

stocks have gone up or most of the stocks have gone
down

The Sensex is an indicator of all the major companies

of the BSE.

The Nifty is an indicator of all the major companies of

BSE
Sensex

BSE Sensex stands for Bombay Stock Exchange

Sensitive Index.
Sensex is an index, an index is basically an
indicator.

The Sensex is an indicator of all the prices of the

m ajor companies of the BSE(Bombay stock exchange)

SENSEX, fi rst compiled in 1986

It consists of the 30 largest and most actively traded

stocks, representative of various sectors
Companies (30) in the
Sensex
Nam e Sector
ACC Housing
Related
B HE Capital Goods
L Telecom
Bhar Housing
ti related
Airt Diversifi ed
el
Finance
DLF Universal
Finance
Limited Grasim
Transport Equipments
Industries HDFC
Metal,Metal Products &
HDFC Bank
Mining FMCG
Hero Honda Motors
Finance
Ltd. Hindalco
Information
Industries Ltd.
Jaiprakash Housing Related
Associates Larsen Capital Goods
& Toubro Transport
Mahindra & Mahindra Equipments
Limited Maruti Udyog Transport
NTPC Equipments Power
Oil &
ONG Gas
C Telecom
Relia Oil &
nce Gas
Com Power
muni
Sun Pharmaceutical Industries
Finance
catio
Healthcare
Tata Consultancy Information
Metal, Metal Products,
ns
Services Tata Motors and Mining
Technology
Reliance Industries
Tata Transport
Reliance
Power Equipments Power
Infrastructure
Tata Steel State Metal, Metal Products &
Bank
Wiproof India Mining Information
Sterlite Industries
The 10 biggest falls in
Sensex
histor
January 21, 2008 --- 1,408.35
y points
Oct 24, 2008---1070.63 points
March 17, 2008 --- 951.03 points
January 22, 2008 --- 857 points
February 11, 2008 --- 833.98
points
May 18, 2006 --- 826 points
October 10, 2008 --- 800.10
points
March 13, 2008 --- 770.63 points
December 17, 2007 --- 769.48
points
Other BSE
Indices
MIDCAP POWE
R

SMLCA METAL

P B SE- HC

100 OILANDG A

B SE- S AUTO

200 PSU

BANKE FMC

X CG G

CD DOLLEX-30

TEC DOLLEX-
 S& P CNX
NIFTY

The National Stock Exchange's key index is the

S&P CNX Nifty (known as the Nifty).

S&P - Standard & Poor's.

CNX - Credit Rating Services of India Limited
(CRISIL) and the National Stock Exchange (NSE)

The base date selected for calculation of Nifty is

November 3, 1995

It represents the 50 largest and most actively traded

stocks of 22 various sectors on the National Stock
Exchange.
 S& P CNX
NIFTY

Nifty is owned and managed by India Index Services

and Products Ltd. (IISL), which is a joint venture
between NSE and CRISIL.

IISL has a consulting and licensing agreement with

Standard & Poor's (S&P), who are world leaders in
index services.
S&P CNX Nifty Index
Company
Company Name Industry
ABB Ltd. ELECTRICAL EQUIPMENT
Associated Cement Companies CEMENT AND CEMENT
Ltd. Bajaj Auto Ltd. PRODUCTS
Bharti Tele-Ventures Ltd. AUTOMOBILES - 2 AND 3
Bharat Heavy Electricals Ltd. WHEELERS
Bharat Petroleum Corporation TELECOMMUNICATION -
Ltd. Cipla Ltd. SERVICES ELECTRICAL
Dabur India Ltd. EQUIPMENT REFINERIES
Dr. Reddy's Laboratories PHARMACEUTICA
Ltd. GAIL (India) Ltd. LS PERSONAL
Glaxosmithkline Pharmaceuticals CARE
Ltd.
PHARMACEUTICALS
Grasim Industries Ltd. PHARMACEUTICA
CEMENT AND CEMENT
Gujarat Ambuja Cements LS GAS
PRODUCTS CEMENT AND
Ltd. HCL Technologies CEMENT PRODUCTS
Ltd. COMPUTERS - SOFTWARE
Housing Development FINANCE - HOUSING
Finance Corporation Ltd. BANK
HDFC Bank Ltd. S
&P CNX Nifty Index Company
Company Name
(Cont..) Industry
Hero Honda Motors AUTOMOBILES - 2 AND 3
Ltd. Hindalco WHEELERS ALUMINIUM
Industries Ltd. DIVERSIFIED
Hindustan Petroleum
Lever Ltd. Corporation Ltd.
REFINERIES
ICICI Bank Ltd. BANKS
Infosys Technologies Ltd. COMPUTERS -
Indian Petrochemicals SOFTWARE
Corporation Ltd. PETROCHEMICALS
I T C Ltd. CIGARETTES
Jet Airways (India) TRAVEL &
Ltd. Larsen & TRANSPORT
Toubro Ltd. ENGINEERING
Mahindra & Mahindra AUTOMOBILES - 4 WHEELERS
Ltd. Maruti Udyog Ltd. AUTOMOBILES - 4 WHEELERS
Mahanagar Telephone Nigam TELECOMMUNICATION -
Ltd. National Aluminium Co. SERVICES ALUMINIUM
Ltd. OIL
Oil & Natural Gas Corporation EXPLORATION/PRODUCTION
Ltd. Oriental Bank of BANKS
&P CNX Nifty Index Company
(Cont..)
Company Name Industry
Reliance Energy Ltd. POWER
Reliance Industries Ltd. REFINERIE
Steel Authority of India S
Ltd. STEEL AND STEEL
Satyam Computer Services PRODUCTS COMPUTERS -
Ltd. State Bank of India SOFTWARE BANKS
Shipping Corporation of SHIPPING
India Ltd. PHARMACEUTICALS
Sun Pharmaceutical Industries CHEMICALS - INORGANIC
Ltd. Tata Chemicals Ltd. AUTOMOBILES - 4
Tata Motors Ltd. WHEELERS POWER
Tata Power Co. STEEL AND STEEL
Ltd. PRODUCTS TEA AND
Tata Steel COFFEE COMPUTERS -
Ltd. Tata SOFTWARE
Tea Ltd. TELECOMMUNICATION -
Tata Consultancy Services SERVICES
Other Index of
NSE

S&P CNX DEFTY CNX

MIDCAP
S&P CNX 500 CNX
IT
CNX
NIFTY MIDCAP
100
BANK
50 CNX NIFTY
NIFTY

JUNIOR
Calculate BSE Sensex and NSE
Nifty

Sensex is calculated using the "Free-fl oat Market

Capitalization" methodology.

All major index providers like MSCI, FTSE, STOXX, S&P

and Dow Jones use the free-fl oat methodology.

It is calculated taking into consideration prices of 30

largest and most actively traded stocks of the BSE listed
companies.
 Free-
float
The “open market” shares that are free for trading by
anyone, are called the “free-fl oat” shares.

According the B SE, any shares that DO NOT fall under

the following criteria, can be considered to be open
market shares:

• Holdings by founders/directors/ acquirers which has

control element
• Holdings by persons/ bodies with "controlling interest"
• Government holding as promoter/acquirer
• Holdings through the FDI Route
• Equity held by employee welfare trusts
The formula for calculating the
SENSEX

= (Sum of free fl ow market cap of 30 biggest stocks

of BSE)
*Index Value in 1978-79/Market Cap Value in 1978-
79.

Note: The base value (index value) of the Sensex is

100 on April 1, 1979, and the base year of BSE-
SENSEX is 1978-79.
Example
:
Suppose the Index consists of only 2 stocks: Stock A
and Stock B.
Stock A has 1000 shares

200 are held by the promoters

800 shares are available for trading ('free-
fl oating' shares)
Stock B has 2,000 shares

1000 are held by promoters

1000 are available for trading (free-floating).

Exampl (cont….
e …)

Assume price of Stock ‘A ‘ is Rs.100, Stock ‘ B ’ is

Rs.200

The total market capitalisation

Stock A is Rs 1,00,000 (1,000 x 100)

Stock B is Rs 4,00,000 (2,000 x 200)

The free-fl oat market capitalisation

Stock A is Rs 80,000 (800 x 100)
Stock B is Rs 2,00,000 (1000 x 200)
Exampl (cont….
e …)

Then sum of free fl oat market cap of these 2

companies. A & B (80000+200000) = Rs. 280000

Assume Market Cap during the year 1978-79 was

Rs.50,000

Apply formula

Then SENSEX = 280000*100/50,000 = 560.

(= Sum of free fl ow market cap *Index Value in

1978- 79/Market Cap Value in 1978-79)
Use same method for calculating
NSE Nifty

Base year is 1995 and base value (index

value) is 1000.

NIFTY is calculated based on 50 stocks.

The formula for calculating the Nifty

= (Sum of free fl ow market cap of 50 biggest stocks of

NSE) * Index Value in 1995 / Market Cap Value in 1995.
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