DEFINITION OF STOCK MARKET [EXCHANGE] :
Stock exchange is the market places where securities that have been listed thereon may be bought and sold for either investment or speculation .stock exchanges allow trading in securities both to the genuine investor and speculator.
HISTORY OF STOCK MARKET:
Established in 1875,the Bombay stock exchange is Asia first stock exchange. In 12th century France the courtesies were concerned with managing and regulating the debts of agricultural communities on behalf of the banks. Because these men also traded with debts, they could be called the first brokers.
A common misbelieve is that in late 13th century Bruges commodity traders gathered inside the house of the man called Van der, and in 1409 they became the "Brugse Beurse", institutionalizing what had been, until then, an informal meeting, but actually, the family Van der had a building in Antwerp where those gathering occurred; the Van der had Antwerp, as most of the merchants of the period, as their primary place for trading.
The idea quickly spread around Flanders and neighboring counties and "bruges" soon opened in Ghent and Rotterdam. And after middle of the 13the century, trade in govt. securities apply. Genoa and Florence also began trading in govt. securities during 14th century. Italian companies were also the first to issue share. In England followed in 1600s. The Dutch East India company [founded in 16th century] was the first joint stock company to get affixed capital stock and as a results.
HOW DOES IT WORKS?
A stock exchange is an institution which hosts a market where traders can buy and sell stocks.
In India there are mainly 4 participants of stock market :
1. Securities and exchange Board of India (SEBI): SEBI is the regulator of stock markets in India and ensures that securities markets in India work in order. SEBI lays down regulatory frameworks were stock exchanges, companies, stock broker or brokerage firms, and other participants have to abide by to protect investors' interests.
2. Stock Exchanges : In India, there are two primary stock exchanges on which companies are listed.
☑ Bombay Stock Exchange (BSE) - Sensex is its Index
☑ National Stock Exchange (NSE) - Nifty is its Index
3. Stock brokers/brokerages : A broker is an intermediary (Individual person or a Firm) that executes buy and sell orders for investors in return of fee or a commission.
4. Investors and traders: Investors are individuals who purchase stocks to become part owners in the company. Trading involves buying or selling of this equity.
INTRODUCTION OF STOCK MARKET
Stock market is one of the important of capital of market. Stock market is an organized market for the purchase and sell of industrial and financial securities. It is convenient place where trading in securities is conducted in systematic manner that is as per certain rules and regulation. This market is also known as stock exchange or secondary market.
The term Secondary market is also used to refer to the market for any used goods. or alternative use for an existing product or assert where the customer base is the second market .
INDIAN STOCK MARKET:
✔Establishment of SEBI and NSE,BSE.✔Indian stock market is one of the oldest stock markets in Asia.1990: Indian began transitioning from physical share certificates to electronics shares.2018: SEBI mandated the complete transition of shares from physical to demat account.
FUNCTIONS OF STOCK MARKET:
[1] Promotes the savings.
[2] Possibility of diversifying your portfolio and provide liquidity to investors.
[3] Permits for the investor to have a political power in the companies.
[4] Profitable activities for companies.
WHY SHARE PRICES FLUCTUATE IN STOCK MARKET ?
[1] Demand and Supply.
[2] actions of underwriters and other financial institutions.
[3] Bank rate are main reason for prices fluctuate.
[4] Speculative pressure.
FACTORS TO BE CONSIDERED BEFORE INVESTING:
✔ROI.
✔Companies history & performance.
✔Market condition.
✔Less knowledge about share market.
✔Laws and mains regulations.
ROLE OF STOCK MARKETS:
[1] Creating investment opportunities for small investors.
[2] Economy-Barometer.
[3] Investment-Mobilizing saving for investment.
[4] Facilitating companies growth and businesses.
[5] Redistribution of wealth for development purpose.
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Stock market