BALDEV RAM MIRDHA INSTITUTE

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BALDEV RAM MIRDHA INSTITUTE OF TECHNOLOGY AProject Study Reporton

Analytical study of Indian stock market Jaipur2008-2010For Partial Fulfillment of M.B.A Part IISubmitted ToRAJASTHAN TECHNICAL UNIVERCITY, KOTA Guided by: Submitted by:Faculty Members Anshul Sharma MBA department

Acknowledgement

The completion of any project depends upon the co-operation, coordination and combined efforts of several resources of knowledge, inspiration & energy.Words fall short acknowledging immense support lent to me yet I will try to give full credit to the deserver's.I would like to take this opportunity to thank SHRIRAM INSIGHT SHARE BROKERS LTD. for giving me the experience and exposure to Financial Services Industry. This project bears the effort of many people; I am indebted to Mr. Mahipal singh choudhary, Rajasthan head, Shriram Insight Ltd. JAIPUR, who gave me this golden opportunity to work with Shriram insight Ltd. I would also like to thanks Mr. Pawan pandey Shriram Insight Ltd who guided and encouraged me during my endeavors.My sincere thanks goes to all Shriram Insight Ltd. staff members for their support and co-operation for making this project successful.

Finally I wish to acknowledge my thanks to all the faculty members of my college for guiding me and motivating me to undertake my project successfully.

Contents

1. Executive summary2. PREFACE3. Company Profile 4. Research Methodology 4.1 Title of the Study 4.2 Duration of the Project 4.3 Objective of Study 4.4 Data sources 4.5 Research approach 4.6 Findings and conclusions 4.7 Suggestions and recommendations

5. Core Study

6. SWOT

7. Conclusion

8. Bibliography

9. Questionnaire

Executive summaryThis project is to study investors trading preference with special reference to a Analytical study of Indian stock market.This project was done in Shriram Insight brokers Ltd., JAIPUR.Shriram Limited is in stock broking service for over 35 years now. It has focused on strengthening its presence in the rapidly expanding retail broking market. Company has obtained SEBI registration to act as Portfolio Manager.The finance sector in India is booming and with the steady rise in the disposable income of people, there is a heightened cause for investments. With the inflation hitting the roof, one has to find ways to get returns at least as much as the inflation rate. Depositing the money in banks is just not the solution anymore. Thus the future of the finance sector in India is indeed bright.A market is an environment that allows buyers and sellers to trade or exchange goods, services, and information. These interactions define demand and supply characteristics and are therefore fundamental to economies. A market can be defined as a place where any type of trade takes place. Markets are dependent on two major participants buyers and sellers. Buyers and sellers typically trade goods, services and/ or information. Historically, markets were physical meeting places where buyers and sellers gathered together to trade. Although physical markets are still vital, virtual marketplaces supported by IT networks such as the internet have become the largest and most liquid. Some markets are very competitive, with a number of vendors selling the same kinds of products or services. Conversely, some markets have low or no competition, particularly if the industry is protected by government legislation. The number of buyers and sellers involved will have a direct bearing on the price of the good or service to be sold, and has become known as the law of supply and demand. Where there are more sellers than buyers, the availability of supply will push down prices. If there are more buyers than sellers, the increased demand will push up prices. Markets can appear spontaneously when there are goods or services to be exchanged, or they can be planned and regulated.

Free markets operate under laissez-faire conditions, in that the government does not intervene in how the market operates. These markets may be distorted if a seller gains monopoly power by managing the majority of supply (or indeed if a buyer develops monopsony power by managing demand). Governments or trade bodies often step in when such distortions undermine the smooth functioning of free markets.

The currency markets are the largest continuously traded markets in the world. Twenty four hours a day, seven days a week, governments, banks, investors and consumers are buying and selling every currency, leading to massive money flows constantly changing hands.

Stock markets have become highly complex markets that allow investors to buy shares in companies or in funds that aggregate companies or industries together. Most stock markets today are primarily electronic networks, although they often maintain a physical location for buyers, sellers and market makers to interact directly.

Markets originally started as marketplaces usually in the center of villages and towns, for the sale or barter of farm produce, clothing and tools. These kinds of street markets developed into a whole variety of consumer-oriented markets, such as specialist markets, shopping centers, supermarkets, or even virtual markets such as eBay.

With the rising price of oil and food, commodity markets are once again under the spotlight. Commodities underpin economic activity. Commodity markets include: energy (oil, gas, coal and increasingly renewable energy sources such as biodiesel), soft commodities and grains (wheat, oat, corn, rice, soya beans, coffee, cocoa, sugar, cotton, frozen orange juice, etc), meat, and financial commodities such as bonds.

Capital goods markets help businesses to buy durable goods to be used in industrial and manufacturing processes. A number of services can also be associated with these goods. Transactions tend to be wholesale with large quantities of goods being transacted at low prices.Did you see the stock market rally on Monday in BSE and NSE? No one can say No! Everyone has seen it and everyone is wishing if he should have buy stocks before this rally. Albeit it could have been a gamble buying stocks before declaration of election results, it paid off for those who bought. Now that's history. Stock markets are going to be volatile for next few days. Today, i.e. on Tuesday, markets opened in red, went till 3oo points down, then recovered and went up to 500 points up and finally settled for flat closing. So what should a small investor do now? Should he buy stocks or should be selling stocks that he holds?This article is a COMPLETE guide to the basics of making money in the stock market! If you are considering investing in the stock market, you MUST read this article! We have explained all the concepts and talked about all the "myths" that people have about the stock market!

Certificate from the company

PREFACE

The project was assigned to me by the organization. The topic of my project is Analytical study of Indian stock market. In this record I have put my best efforts to compile the data to the highest level of accuracy and give my views to the best of my judgment.

ANSHUL SHARMA

PROFILE OF THE ORGANISATION

Established in the year 1974, the Shriram Group, comprising 750 Branches and Service Centres, is India's premier financial services chain. They are the largest player in Truck Financing and Chit funds in the Indian subcontinent.Pioneer in developing partners and agents for more than 30 years, Shriram group has created products suited to maximum savings opportunity for retail clients. Thus, its partnership has grown to more than 80,000 agents, handling a wide range of products like fixed deposit, debentures, life insurance and general insurance. Shriram Insight offers share broking service especially targeted at retail investors. With increasing investment in stock market and growing volume in exchanges, becoming a Shriram Insight partner helps you service your clients and grow your business. Why Shriram Shriram is one of the few financial companies to have survived NBFC debacle Group has forged ahead even in adverse times by virtue of its vision, dynamism & innovation 100% integrity & transparency never defaulted in financial commitments to its clients in maturity & interest payout Why investment in Shriram is safe Its core business is truck finance profitable with high demand. Over 65% of goods in India are transported in trucks They are clear leaders in truck finance as it is highly specialized business with few finance companies having succeeded in setting up organizational capability of managing risk They have well diversified business portfolio with wide geographical spread

Shrirams Products Shriram Insight services more than 1,25,000 clients through its network of 460 branches spread across the country. Our offerings include: Share trading Call & Trade Online (Internet) trading, with highly secured payment gateways through leading banks in India Trading & demat account at nominal cost Trading in cash & derivatives Margin funding Commodities trading Research, daily technical analysis, Intraday and Positional calls, daily market report, company results analysis PRODUCT FEATURES Good returns to investors Advance information on forthcoming offers Best brokerage & adequate provision of forms SHRIRAMS DISTRIBUTION PRODUCTS Mutual funds: Equity, Debt, Liquid Company deposits: Hudco, HDFC, SAIL, others Capital gain bonds: NHAI, REC Tax-benefit schemes: 8% RBI, ICICI & IDBI bonds Initial public offers (IPOs) & NFOs

Why Shriram financial products should be part of every distributors portfolio: Diversified income & remunerative business opportunity Attractive incentive schemes announced periodically

Shrirams Network NORTH SOUTH Punjab Tamil Nadu Delhi Andhra PradeshRajasthan Karnataka Uttar Pradesh Kerala EAST WEST West Bengal Gujarat Bihar Bihar Jharkhand Jharkhand Orissa Orissa

Brokerage Structure:-Intraday trading: 0.03%Delivery : 0.3%Exposure : 4 times of the deposit. RESEARCH METHODOLOGY

TITLE OF THE STUDY:-Analytical study of Indian stock market

DURATION OF THE PROJECT:- 45 days

(1)DEFINES THE PROBLEM AND RESEARCH OBJECTIVESThe objective of the study conducted was to study of market potential of online share trading. Secondary objective of customer survey was to know the customer awareness towards online share trading. My other objectives were to find out the overall perception about the system and what motivates the people to think about going for online share trading.(2)DEVELOPING RESEARCH PLANThe second stage of marketing research calls for developing a most efficient plan for gathering needed information. Designing a research plan calls for taking decision on data sources research, approach, research instrument, sampling plan and contact methods.

DATA SourcesThere are two types of methods used in data collection i.e. primary data & secondary data.

A) Primary dataThose data which are collected at first hand by the researcher especially for the purpose of the study ,are known as primary Data .The data is collected directly from the person in sample population. In this project research the collection of data is directly interviewing customer. In the collection of the primary data, I have used survey method and use the questionnaire methods.There are mainly two methods for the collection of the primary data which are given below,

Observational Method.Survey Method.

Observation method:-In the observation method, it requires the observer. The observer will keenly observe the person at the time of the interview & record his behavior accurately. it is also one of The important method for the collection of data but it requires good & experienced observer who can observer The behavior of the respondent properly and record it with great accuracy.Survey method:-It is most popular method for the collection of necessary data from the respondents. I have used survey method for the collection of the necessary data.Different types of the survey are given below,Telephonic survey.Personal interview.Mail questionnaires.

Telephonic survey:-In the telephonic interview, the interviewer will make call to respondents, inform the respondents about the purpose of the call and then he will ask the related questions to the respondents. This method is used, when the information to be collected is limited. It is mostly used when information to be collected is limited.Personal interview:-In the personal interview, the interviewer will personally meet the respondent and will take is interview. The interviewer will ask question in face to face direction to the respondents or group of respondents.Mail questionnaire:-In the mail questioner the interviewer will mail the questionnaire to the respondents and inform them about the purpose of the survey. Also the time limit for the questionnaire is specified in the mail. This method is used when the area to be covered is large and the survey has to be conducted in the specific limit.In my survey, I have used the personal interview to know customer awareness towards online share trading. I have visited respondents personally.

B) Secondary dataAny data which had been gathered earlier for other purposes are secondary data in hand of marketing research. These data has been collected from company dealer like Dealer profile, industrial profile, company profile are collected from the internet.The secondary data are collected from the magazines, internet andweb sites. Different web sites like www.sharekhan.com and GOOGLEsearch engine help in collecting the detailed information.

RESEARCH APPROACHOut of 4 ways of research approaches i.e.1. Observation research.2. Survey Research3. Focus Group research4. Experimental research.

In this project the approach used was survey approach because the main objective of our survey was to study of the market potential and have an idea about the customer awareness.

Collection of Information:The information was collected from customer by personally asking them Question and filling the Questionnaire.

Analyze The Information.The information available is analyzed in the form of tables, graphs and pie chart.

Findings and Conclusions After the analysis of the data some figures came out and they were tallied and then some inferences were drawn from them so that the recommendations can be given to follow

Suggestions and Recommendation The suggestions given are on the basis of data collected. The recommendations given can help in designing the portfolio of the client. It can be analyzed that which income group is in the need of which type of investment option.

Core studyStock marketA stock market is a public market for the trading of company stock and derivatives at an agreed price; these are securities listed on a stock exchange as well as those only traded privately.The size of the world stock market was estimated at about $36.6 trillion US at the beginning of October 2008 . The total world derivatives market has been estimated at about $791 trillion face or nominal value, 11 times the size of the entire world economy. The value of the derivatives market, because it is stated in terms of notional values, cannot be directly compared to a stock or a fixed income security, which traditionally refers to an actual value. Moreover, the vast majority of derivatives 'cancel' each other out (i.e., a derivative 'bet' on an event occurring is offset by a comparable derivative 'bet' on the event not occurring.). Many such relatively illiquid securities are valued as marked to model, rather than an actual market price.)The stocks are listed and traded on stock exchanges which are entities a corporation or mutual organization specialized in the business of bringing buyers and sellers of the organizations to a listing of stocks and securities together. The stock market in the United States includes the trading of all securities listed on the NYSE, the NASDAQ, the Amex, as well as on the many regional exchanges, e.g. OTCBB and Pink Sheets. European examples of stock exchanges include the London Stock Exchange, the Deutsche Brse and the Paris Bourse, now part of Euronext.Function of stock marketThe stock market is one of the most important sources for companies to raise money. This allows businesses to be publicly traded, or raise additional capital for expansion by selling shares of ownership of the company in a public market. The liquidity that an exchange provides affords investors the ability to quickly and easily sell securities. This is an attractive feature of investing in stocks, compared to other less liquid investments such as real estate.History has shown that the price of shares and other assets is an important part of the dynamics of economic activity, and can influence or be an indicator of social mood. An economy where the stock market is on the rise is considered to be an up and coming economy. In fact, the stock market is often considered the primary indicator of a country's economic strength and development. Rising share prices, for instance, tend to be associated with increased business investment and vice versa. Share prices also affect the wealth of households and their consumption. Therefore, central banks tend to keep an eye on the control and behavior of the stock market and, in general, on the smooth operation of financial system functions. Financial stability is the raison d'tre of central banks.Exchanges also act as the clearinghouse for each transaction, meaning that they collect and deliver the shares, and guarantee payment to the seller of a security. This eliminates the risk to an individual buyer or seller that the counterparty could default on the transaction.The smooth functioning of all these activities facilitates economic growth in that lower costs and enterprise risks promote the production of goods and services as well as employment. In this way the financial system contributes to increased prosperity.The stock market, individual investors, and financial riskRiskier long-term saving requires that an individual possess the ability to manage the associated increased risks. Stock prices fluctuate widely, in marked contrast to the stability of (government insured) bank deposits or bonds. This is something that could affect not only the individual investor or household, but also the economy on a large scale. The following deals with some of the risks of the financial sector in general and the stock market in particular. This is certainly more important now that so many newcomers have entered the stock market, or have acquired other 'risky' investments (such as 'investment' property, i.e., real estate and collectables).With each passing year, the noise level in the stock market rises. Television commentators, financial writers, analysts, and market strategists are all overtaking each other to get investors' attention. At the same time, individual investors, immersed in chat rooms and message boards, are exchanging questionable and often misleading tips. Yet, despite all this available information, investors find it increasingly difficult to profit. Stock prices skyrocket with little reason, then plummet just as quickly, and people who have turned to investing for their children's education and their own retirement become frightened. Sometimes there appears to be no rhyme or reason to the market, only folly.This is a quote from the preface to a published biography about the long-term value-oriented stock investor Warren Buffett.[4] Buffett began his career with $100, and $105,000 from seven limited partners consisting of Buffett's family and friends. Over the years he has built himself a multi-billion-dollar fortune. The quote illustrates some of what has been happening in the stock market during the end of the 20th century and the beginning of the 21st century.Securities and Exchange Board of IndiaSEBI Bhavan, Mumbai Headquarters of SEBIOrganization DetailsHeadquartersMumbai, Maharashtra, IndiaEstablished1992JurisdictionIndiaHeadChairmanChairmanC B BhaveTermFebruary 16, 2008 -Total Staff[1]525Official WebsiteWebsitewww.sebi.gov.in" www.sebi.gov.inSEBI is the Regulator for the Securities Market in India. Originally set up by the Government of India in 1988, it acquired statutory form in 1992 with SEBI Act 1992 being passed by the Indian Parliament.Chaired by C B Bhave, SEBI is headquartered in the popular business district of Bandra-Kurla complex in Mumbai, and has Northern, Eastern, Southern and Western regional offices in New Delhi, Kolkata, Chennai and Ahmadabad.

Organization StructureChandrasekhar Bhaskar Bhave is the sixth chairman of the Securities Market Regulator. Prior to taking charge as Chairman SEBI, he had been the chairman of NSDL (National Securities Depository Limited) ushering in paperless securities. Prior to his stint at NSDL, he had served SEBI as a Senior Executive Director. He is a former Indian Administrative Service officer of the 1975 batch.

The Board comprises[2]NameDesignationAs perMr CB BhaveChairman SEBICHAIRMAN (S.4(1)(a) of the SEBI Act, 1992)Mr KP KrishnanJoint Secretary, Ministry of FinanceMember (S.4(1)(b) of the SEBI Act, 1992)Mr Anurag GoelSecretary, Ministry of Corporate AffairsMember (S.4(1)(b) of the SEBI Act, 1992)Dr G Mohan GopalDirector, National Judicial Academy, BhopalMember (S.4(1)(d) of the SEBI Act, 1992)Mr MS SahooWhole Time Member, SEBIMember (S.4(1)(d) of the SEBI Act, 1992)Dr KM AbrahamWhole Time Member, SEBIMember (S.4(1)(d) of the SEBI Act, 1992)Mr Mohandas PaiDirector, InfosysMember (S.4(1)(d) of the SEBI Act, 1992)Bombay Stock ExchangeIntroductionBombay Stock Exchange is the oldest stock exchange in Asia with a rich heritage, now spanning three centuries in its 133 years of existence. What is now popularly known as BSE was established as "The Native Share & Stock Brokers' Association" in 1875.

BSE is the first stock exchange in the country which obtained permanent recognition (in 1956) from the Government of India under the Securities Contracts (Regulation) Act 1956. BSE's pivotal and pre-eminent role in the development of the Indian capital market is widely recognized. It migrated from the open outcry system to an online screen-based order driven trading system in 1995. Earlier an Association Of Persons (AOP), BSE is now a corporatized and demutualised entity incorporated under the provisions of the Companies Act, 1956, pursuant to the BSE (Corporatization and Demutualization) Scheme, 2005 notified by the Securities and Exchange Board of India (SEBI). With demutualization, BSE has two of world's best exchanges, Deutsche Brse and Singapore Exchange, as its strategic partners.

Over the past 133 years, BSE has facilitated the growth of the Indian corporate sector by providing it with an efficient access to resources. There is perhaps no major corporate in India which has not sourced BSE's services in raising resources from the capital market.

Today, BSE is the world's number 1 exchange in terms of the number of listed companies and the world's 5th in transaction numbers. The market capitalization as on December 31, 2007 stood at USD 1.79 trillion. An investor can choose from more than 4,700 listed companies, which for easy reference, are classified into A, B, S, T and Z groups.

The BSE Index, SENSEX, is India's first stock market index that enjoys an iconic stature, and is tracked worldwide. It is an index of 30 stocks representing 12 major sectors. The SENSEX is constructed on a 'free-float' methodology, and is sensitive to market sentiments and market realities. Apart from the SENSEX, BSE offers 21 indices, including 12 sectoral indices. BSE has entered into an index cooperation agreement with Deutsche Brse. This agreement has made SENSEX and other BSE indices available to investors in Europe and America. Moreover, Barclays Global Investors (BGI), the global leader in ETFs through its shares brand, has created the 'iShares BSE SENSEX India Tracker' which tracks the SENSEX. The ETF enables investors in Hong Kong to take an exposure to the Indian equity market.

The first Exchange Traded Fund (ETF) on SENSEX, called "SPIcE" is listed on BSE. It brings to the investors a trading tool that can be easily used for the purposes of investment, trading, hedging and arbitrage. SPIcE allows small investors to take a long-term view of the market.

BSE provides an efficient and transparent market for trading in equity, debt instruments and derivatives. It has a nation-wide reach with a presence in more than 359 cities and towns of India. BSE has always been at par with the international standards. The systems and processes are designed to safeguard market integrity and enhance transparency in operations. BSE is the first exchange in India and the second in the world to obtain an ISO 9001:2000 certification. It is also the first exchange in the country and second in the world to receive Information Security Management System Standard BS 7799-2-2002 certification for its BSE On-line Trading System (BOLT).

BSE continues to innovate. In recent times, it has become the first national level stock exchange to launch its website in Gujarati and Hindi to reach out to a larger number of investors. It has successfully launched a reporting platform for corporate bonds in India christened the ICDM or Indian Corporate Debt Market and a unique ticker-cum-screen aptly named 'BSE Broadcast' which enables information dissemination to the common man on the street.

In 2006, BSE launched the Directors Database and ICERS (Indian Corporate Electronic Reporting System) to facilitate information flow and increase transparency in the Indian capital market. While the Directors Database provides a single-point access to information on the boards of directors of listed companies, the ICERS facilitates the corporates in sharing with BSE their corporate announcements.

BSE also has a wide range of services to empower investors and facilitate smooth transactions:Investor Services: The Department of Investor Services redresses grievances of investors. BSE was the first exchange in the country to provide an amount of Rs.1 million towards the investor protection fund; it is an amount higher than that of any exchange in the country. BSE launched a nationwide investor awareness programme- 'Safe Investing in the Stock Market' under which 264 programmes were held in more than 200 cities.

The BSE On-line Trading (BOLT): BSE On-line Trading (BOLT) facilitates on-line screen based trading in securities. BOLT is currently operating in 25,000 Trader Workstations located across over359 cities in India.

BSEWEBX.com: In February 2001, BSE introduced the world's first centralized exchange-based Internet trading system, BSEWEBX.com. This initiative enables investors anywhere in the world to trade on the BSE platform.

Surveillance: BSE's On-Line Surveillance System (BOSS) monitors on a real-time basis the price movements, volume positions and members' positions and real-time measurement of default risk, market reconstruction and generation of cross market alerts.

BSE Training Institute: BTI imparts capital market training and certification, in collaboration with reputed management institutes and universities. It offers over 40 courses on various aspects of the capital market and financial sector. More than 20,000 people have attended the BTI programmes

AwardsThe World Council of Corporate Governance has awarded the Golden Peacock Global CSR Award for BSE's initiatives in Corporate Social Responsibility (CSR). The Annual Reports and Accounts of BSE for the year ended March 31, 2006 and March 31 2007 have been awarded the ICAI awards for excellence in financial reporting. The Human Resource Management at BSE has won the Asia - Pacific HRM awards for its efforts in employer branding through talent management at work, health management at work and excellence in HR through technology

Drawing from its rich past and its equally robust performance in the recent times, BSE will continue to remain an icon in the Indian capital market.HistoryFor the premier stock exchange that pioneered the securities transaction business in India, over a century of experience is a proud achievement. A lot has changed since 1875 when 318 persons by paying a then princely amount of Re. 1, became members of what today is called Bombay Stock Exchange Limited (BSE).

Over the decades, the stock market in the country has passed through good and bad periods. The journey in the 20th century has not been an easy one. Till the decade of eighties, there was no measure or scale that could precisely measure the various ups and downs in the Indian stock market. BSE, in 1986, came out with a Stock Index-SENSEX- that subsequently became the barometer of the Indian stock market.

The launch of SENSEX in 1986 was later followed up in January 1989 by introduction of BSE National Index (Base: 1983-84 = 100). It comprised 100 stocks listed at five major stock exchanges in India - Mumbai, Calcutta, Delhi, Ahmedabad and Madras. The BSE National Index was renamed BSE-100 Index from October 14, 1996 and since then, it is being calculated taking into consideration only the prices of stocks listed at BSE. BSE launched the dollar-linked version of BSE-100 index on May 22, 2006.

With a view to provide a better representation of the increasing number of listed companies, larger market capitalization and the new industry sectors, BSE launched on 27th May, 1994 two new index series viz., the 'BSE-200' and the 'DOLLEX-200'. Since then, BSE has come a long way in attuning itself to the varied needs of investors and market participants. In order to fulfill the need for still broader, segment-specific and sector-specific indices, BSE has continuously been increasing the range of its indices. BSE-500 Index and 5 sectoral indices were launched in 1999. In 2001, BSE launched BSE-PSU Index, DOLLEX-30 and the country's first free-float based index - the BSE TECk Index. Over the years, BSE shifted all its indices to the free-float methodology Several Firsts At par with the international standards, BSE has in fact been a pioneer in several areas. It has several firsts to its credit even in an intensely competitive environment.First in India to introduce Equity Derivatives First in India to launch a Free Float Index First in India to launch US$ version of BSE SENSEX First in India to launch Exchange Enabled Internet Trading Platform First in India to obtain ISO certification for a stock exchange 'BSE On-Line Trading System (BOLT) has been awarded the globallyrecognised the Information Security Management System standardBS7799-2:2002. First to have an exclusive facility for financial training First in India in the financial services sector to launch its website in Hindi and Gujarati Shifted from Open Outcry to Electronic Trading within just 50 days First bell-ringing ceremony in the history of the Indian capital markets (listing ceremony of Bharti Televentures Ltd.on February 18,2002).

National Stock Exchange of IndiaNational Stock Exchange Limited

TypeStock ExchangeLocationMumbai, IndiaCoordinates19337N 725135E/19.06028N 72.85972E/19.06028; 72.85972OwnerNational Stock Exchange of India LimitedKeypeopleMr. Ravi Narain Managing DirectorCurrencyINRNo.oflistings1587Market CapUS$ 1.46 trillion (2006)IndexesS&P CNX NiftyCNX Nifty JuniorS&P CNX 500Websitehttp://www.nse-india.com/The National Stock Exchange of India Limited (NSE), is a Mumbai-based stock exchange. It is the largest stock exchange in India in terms of daily turnover and number of trades, for both equities and derivative trading.[1]. Though a number of other exchanges exist, NSE and the Bombay Stock Exchange are the two most significant stock exchanges in India, and between them are responsible for the vast majority of share transactions. The NSE's key index is the S&P CNX Nifty, known as the Nifty, an index of fifty major stocks weighted by market capitalization.NSE is mutually-owned by a set of leading financial institutions, banks, insurance companies and other financial intermediaries in India but its ownership and management operate as separate entities. There are at least 2 foreign investors NYSE Euronext and Goldman Sachs who have taken a stake in the NSE. As of 2006[update], the NSE VSAT terminals, 2799 in total, cover more than 1500 cities across India . 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. NSE is 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%.

Origins

NSE building at BKCThe National Stock Exchange of India was promoted by leading Financial institutions at the behest of the Government of India, and was incorporated in November 1992 as a tax-paying company. In April 1993, it was recognized as a stock exchange under the Securities Contracts (Regulation) Act, 1956. NSE commenced operations in the Wholesale Debt Market (WDM) segment in June 1994. The Capital Market (Equities) segment of the NSE commenced operations in November 1994, while operations in the Derivatives segment commenced in June 2000.InnovationsNSE has remained in the forefront of modernization of India's capital and financial markets, and its pioneering efforts include:Being the first national, anonymous, electronic limit order book (LOB) exchange to trade securities in India. Since the success of the NSE, existent market and new market structures have followed the "NSE" model. Setting up the first clearing corporation "National Securities Clearing Corporation Ltd." in India. NSCCL was a landmark in providing innovation on all spot equity market (and later, derivatives market) trades in India. Co-promoting and setting up of National Securities Depository Limited, first depository in India[2]. Setting up of S&P CNX Nifty. NSE pioneered commencement of Internet Trading in February 2000, which led to the wide popularization of the NSE in the broker community. Being the first exchange that, in 1996, proposed exchange traded derivatives, particularly on an equity index, in India. After four years of policy and regulatory debate and formulation, the NSE was permitted to start trading equity derivatives 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, a

it is the one of the most important stock exchange in the world

S&P CNX Nifty S&P CNX Nifty is a well diversified 50 stock index accounting for 21 sectors of the economy. It is used for a variety of purposes such as benchmarking fund portfolios, index based derivatives and index funds.

S&P CNX Nifty is owned and managed by India Index Services and Products Ltd. (IISL), which is a joint venture between NSE and CRISIL. IISL is India's first specialised company focused upon the index as a core product. IISL has a Marketing and licensing agreement with Standard & Poor's (S&P), who are world leaders in index services. The total traded value for the last six months of all Nifty stocks is approximately 65.68% of the traded value of all stocks on the NSE Nifty stocks represent about 65.34% of the total market capitalization as on Mar 31, 2009. Impact cost of the S&P CNX Nifty for a portfolio size of Rs.2 crore is 0.16% S&P CNX Nifty is professionally maintained and is ideal for derivatives trading

Sensex & the NiftyThe Sensex is an "index". What is an index? An index is basically an indicator. 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 the NSE.

If the Sensex goes up, it means that the prices of the stocks of most of the major companies on the BSE have gone up. If the Sensex goes down, this tells you that the stock price of most of the major stocks on the BSE have gone down.

Just like the Sensex represents the top stocks of the BSE, the Nifty represents the top stocks of the NSE.

Just in case you are confused, the BSE, is the Bombay Stock Exchange and the NSE is the National Stock Exchange. The BSE is situated at Bombay and the NSE is situated at Delhi. These are the major stock exchanges in the country. There are other stock exchanges like the Calcutta Stock Exchange etc. but they are not as popular as the BSE and the NSE.Most of the stock trading in the country is done though the BSE & the NSE.

Major Factors That Affect Stock Price in stock market globally When you wish to invest in the stock market, then you should always make a good survey of the whole market. As you know that you cannot predict the stock market, so in that case you need to know the functioning of the market. There are some major factors that affect stock price. So let us discuss about the different factors affecting the stock price in this article. Demand AND SUPPLYOne of the major factors affecting stock price is demand and supply. The trend of the stock market trading directly affects the price. When people are buying more stocks, then the price of that particular stock increases. On the other hand if people are selling more stocks, then the price of that stock falls. So, you should be very careful when you decide to invest in the Indian stock market. Market CapNever try to guess the worth of a company simply by comparing the price of the stock. You should always keep in mind that it is not the stock but the market capitalization of the company that determines the worth of the company. So market cap is another factor that affects stock price.What is "market capitalization"?You probably think that you have never heard of the term market capitalization before. You have! When you are talking about mid-cap, small-cap and large-cap stocks, you are talking about market capitalization!

Market cap or market capitalization is simply the worth of a company in terms of its shares! To put it in a simple way, if you were to buy all the shares of a particular company, what is the amount you would have to pay? That amount is called the market capitalization!

To calculate the market cap of a particular company, simply multiply the current share price by the number of shares issued by the company! Just to give you an idea, ONGC, has a market cap of Rs.170,705.21 Cr (when this article was written)

Depending on the value of the market cap, the company will either be a mid-cap or large-cap or small-cap company! Now the question is, how do YOU calculate the market cap of a particular company? You dont! Just go to a website like MoneyControl.com and look up the company whose market cap you are interested in finding out! The figure in front of Mkt. Cap will be the market cap value.

NewsWhen you get positive news about a company then it can increase the buying interest in the market. On the other hand, when there is a negative press release, it can ruin the prospect of a stock. In this case you should remember that news should not matter much but the overall performance of the company matters more. So, news is another factor affecting stock price.Earning/Price RatioAnother important factor affecting stock price is the earning/price ratio. This gives you a fair idea of a companys share price when it is compared to its earnings. The stock becomes undervalued if the price of the share is much lower than the earnings of a company. But if this is the case, then it has the potential to rise in the near future. The stock becomes overvalued if the price is much higher than the actual earning. So, these are the major factors that affect stock price. Trading StylesThere are several different styles of day trading, suited to different day trader personalities. The styles range from short term trading such as scalping where positions are only held for a few seconds or minutes, to longer term swing and position trading where a position may be held throughout the trading day. Most day trading systems have a lot of flexibility, and can have open positions for anywhere from a few minutes to a few hours, depending upon how the trade is doing (whether it is in profit). Some day traders will trade multiple styles, but most traders will choose a single style and only take that type of trade.

KEY STATISTICSYEAR-2009

I.BUSINESS TRANSACTED AT BSE

Turnover, Average Daily Turnover, Turnover for the month, V-SAT Turnover, No. of Shares Traded, No. of Script Traded, Deliveries, Market Capitalisation, No. of Trading Days, Derivatives.II.LISTING AND CAPITAL RAISED

No. of Companies Listed, No. of Scrips Listed, Newly Listed securities of existing companies, Capital Listed during the month, Amount offered/raised through IPO & Rights, Capital raised through FCCB/Euro Issue.III.INDEX AND RATIOS

BSE Sensitive Index, BSE TECK Index, BSE 100 Index, BSE 200 Index, Dollex-200, BSE 500 Index, P/E Ratio, Price to Book Value, Dividend Yield %.IV.BUSINESS TRANSACTED BY FIIs

No. of Registered FIIs, FIIs transactions in BSE, FIIs transactions (Equity & Debt) all India.V.MEMBERSHIP AND TWS

No. of Members, No. of Trader Work Station (TWS), No. of Cities.VI.DOLLAR EXCHANGE RATE

Rupee Dollar Rate.Conversion Table

1 Billion = 100 Crore, 1 Crore = 10 Million, 1 million = 10 Lakh, 1Lakh = 100 Thousand.

BSE PRODUCTS

Data Products BSE provides 3 basic types of data products a) Market data Equity, Derivatives and debt. b) Indices 17. c) Corporate Data Results (Quarterly, Half-yearly, Annual),Announcements, Shareholding Pattern.

These Data Products are provided at two levels viz. Level 1 and Level 2. 1 ) Level 1 Data contains the following informationi. Scrip codeii. Open, High, low and last traded priceiii. Best Bid / offer with volumeiv. Traded Volumev. Close and last traded quantity (Only for live feed)2 ) Level 2 Data contains the following information in additionto the level 1 data.i. Weighted average priceii. Upper Circuit limit and lower circuit limitiii. Turnover value, number of trades, trendv. Total Buy quantity and Total sell quantity

CAPITAL INFLOWSDuring the April-January period of 2008-09, India attracted total foreign investments of US $ 15,545 million. The foreign direct investment (FDI) stood at US $ 27,426 million, while the portfolio investment stood at US $ -11,881 million.

Monthly trends in foreign investments($ million)

Months Foreign direct investments

Portfolio investments

Total foreign investments

2007-08(P) 2008-09(P) 2007-08(P) 2008-09(P) 2007-08(P) 2008-09(P)

April16433749 1974 -880 3617 2869

May2120 3932 1852 -288 3972 3644

June123823923664 -30104902 -618

July7052247 6713-492 74181755

August831 2328 -2875 593 -2044 2921

September71325627081 -14037794 1159

October20271497 9564 -5243 11591 -3746

November1864 1083 -107-574 1757 509

December155813625294 30 6852 1392

January176727336739 -614 8506 2119

February5670- -8904 - -3234 -

March4438 - -1600 - 2838 -

April-January- 27426- -11881- 15545

Stock Market Trends

Year /MonthBSE Sensitive Index(Base : 1978 - 79 = 100)

BSE - 100 (Base : 1983 - 84 = 100)

S & P CNX Nifty *(Base : November 3, 1995 = 1000)

AverageHighLowAverageHighLowAver-ageHighLow

12 3 4 5 6 7 8 9 10

2005-06 8280.08 11307.04 6134.86 4393.54 5904.17 3310.14 2513.44 3418.95 1902.50

2006-07 12277.33 14652.09 8929.44 6242.73 7413.22 4535.00 3572.44 4224.25 2632.80

2007-0816568.89 20873.33 12455.378691.4711509.966287.694896.606287.853633.60

May-0714156.47 14544.46 13765.46 7244.49 7468.70 7015.37 4184.39 4295.80 4066.80

Jun-0714334.30 14650.51 14003.03 7392.34 7605.37 7188.38 4222.17 4318.30 4113.05

Jul-0715253.42 15794.92 14664.26 7897.30 8155.29 7625.71 4474.18 4620.75 4313.75

Aug-0714779.05 15318.60 13989.11 7594.81 7897.92 7179.39 4301.36 4464.00 4074.90

Sep-0716046.0217291.1015422.058292.698967.417924.294659.925021.354474.75

Oct-0718500.3119977.6717328.629587.5010391.198998.605456.625905.905068.95

Nov-0719259.55 19976.23 18526.32 10211.50 10531.67 9868.75 5748.58 5937.90 5519.35

Dec-0719827.28 20375.87 19079.64 10795.30 11154.28 10422.15 5963.57 6159.30 5742.30

Jan-0819325.65 20873.33 16729.94 10526.54 11509.96 8895.64 5756.35 6287.85 4899.30

Feb-0817727.54 18663.16 16608.01 9435.60 9969.59 8785.88 5201.56 5483.90 4838.25

Mar-0815838.38 16677.88 14809.49 8363.58 8907.23 7828.01 4769.50 4953.00 4503.10

Apr-0816290.99 17378.46 15343.12 8627.59 9240.57 8095.02 4901.91 5195.50 4647.00

May-0816945.65 17600.12 16275.59 8982.20 9348.64 8621.84 5028.66 5228.20 4835.30

June-0814997.2816063.1813461.607909.288488.627029.744463.794739.604040.55

July-0813716.1814942.2812575.807143.717760.326580.674124.604476.803816.70

Aug-0814722.1315503.9214048.347704.758101.487362.494417.124620.404214.00

Sept-0813942.8115049.8612595.757276.357860.876564.064206.694504.003850.05

Oct-0810549.6513055.678509.565432.926776.874343.213210.223950.752524.20

Nov-089453.9610631.128451.014823.365396.094332.172834.793148.252553.15

Dec-089513.5810099.918739.244864.555181.944443.502895.803077.502656.45

Jan-099350.4210335.938674.354802.015328.954441.842854.363121.452678.55

DerivativesCommodities whose value is derived from the price of some underlying asset like securities, commodities, bullion, currency, interest level, stock market index or anything else are known as Derivatives.

In more simpler form, derivatives are financial security such as an option or future whose value is derived in part from the value and characteristics of another security, the underlying asset.

It is a generic term for a variety of financial instruments. Essentially, this means you buy a promise to convey ownership of the asset, rather than the asset itself. The legal terms of a contract are much more varied and flexible than the terms of property ownership. In fact, its this flexibility that appeals to investors.

When a person invests in derivative, the underlying asset is usually a commodity, bond, stock, or currency. He bet that the value derived from the underlying asset will increase or decrease by a certain amount within a certain fixed period of time.

Futures and options are two commodity traded types of derivatives. An options contract gives the owner the right to buy or sell an asset at a set price on or before a given date. On the other hand, the owner of a futures contract is obligated to buy or sell the asset.

The other examples of derivatives are warrants and convertible bonds (similar to shares in that they are assets). But derivatives are usually contracts. Beyond this, the derivatives range is only limited by the imagination of investment banks. It is likely that any person who has funds invested, an insurance policy or a pension fund, that they are investing in, and exposed to, derivatives wittingly or unwittingly.

Shares or bonds are financial assets where one can claim on another person or corporation; they will be usually be fairly standardized and governed by the property of securities laws in an appropriate country.

On the other hand, a contract is merely an agreement between two parties, where the contract details may not be standardized.

Derivatives securities or derivatives products are in real terms contracts rather than solid as it fairly sounds.

India Commodity Market

The vast geographical extent of India and her huge population is aptly complemented by the size of her market. The broadest classification of the Indian Market can be made in terms of the commodity market and the bond market. Here, we shall deal with the former in a little detail.

The commodity market in India comprises of all palpable markets that we come across in our daily lives. Such markets are social institutions that facilitate exchange of goods for money. The cost of goods is estimated in terms of domestic currency . India Commodity Market can be subdivided into the following two categories: Wholesale Market Retail Market

Let us now take a look at what the present scenario of each of the above markets is like. The traditional wholesale market in India dealt with whole sellers who bought goods from the farmers and manufacturers and then sold them to the retailers after making a profit in the process. It was the retailers who finally sold the goods to the consumers. With the passage of time the importance of whole sellers began to fade out for the following reasons: The whole sellers in most situations, acted as mere parasites who did not add any value to the product but raised its price which was eventually faced by the consumers. The improvement in transport facilities made the retailers directly interact with the producers and hence the need for whole sellers was not felt.

In recent years, the extent of the retail market (both organized and unorganized) has evolved in leaps and bounds. In fact, the success stories of the commodity market of India in recent years has mainly centered around the growth generated by the Retail Sector. Almost every commodity under the sun both agricultural and industrial are now being provided at well distributed retail outlets throughout the country. Moreover, the retail outlets belong to both the organized as well as the unorganized sector. The unorganized retail outlets of the yesteryears consist of small shop owners who are price takers where consumers face a highly competitive price structure. The organized sector on the other hand are owned by various business houses like Pantaloons, Reliance, Tata and others. Such markets are usually sell a wide range of articles both agricultural and manufactured, edible and inedible, perishable and durable. Modern marketing strategies and other techniques of sales promotion enable such markets to draw customers from every section of the society. However the growth of such markets has still centered around the urban areas primarily due to infrastructural limitations. Considering the present growth rate, the total valuation of the Indian Retail Market is estimated to cross Rs. 10,000 billion by the year 2010. Demand for commodities is likely to become four times by 2010 than what it presently is. Money Market

When the stock prices show a downward trend , then it becomes risky to keep savings there. Although the stock market is associated with high risks and high returns , many are risk averse and prefer to invest in the more secure money market . The money market deals with very short term debt securities that mature in less than a year. Since the money market is extremely safe, it yields very low returns unlike the bond market. The money market securities that are issued by the government or financial institutions or large corporations are very liquid. Since the money market securities trade at very high denominations it becomes very difficult for the individual investors to have access to it. The money market is a type of a dealer market where firms purchase securities in their own account by assuming the risks themselves. Unlike the stock exchanges the money market securities do not operate in exchanges or through brokers. Transactions take place over phone or the electronic system. One may browse through the following links to have a more detailed information about money market.Money Market DefinitionMoney Market Definition is simply meant as the short-term debt market. Treasury Bills and certificate of deposits are regarded as the instruments in the money market. World Money MarketWorld Money Market has been providing origination, trading and the distribution of short-term debt instruments across different regions over the world. Find detailed on the world money market. Money Market Index Money Market Index is a true indicator of the prevailing money market, which renders a clear-cut idea on making investment.Money Market RatesMoney Market Rates can be simply defined as the market rates including the broker call loan rate, federal funds rate, rates on bankers' acceptance etc. Get the method of finding the money market rates.

Market Segments OverviewThe United States Government formally defines Information Security as:"Protecting information and information systems from unauthorized access, use, disclosure, disruption, modification, or destruction in order to provide -integrity, which means guarding against improper information modification or destruction, and includes ensuring information non-repudiation and authenticity;

confidentiality, which means preserving authorized restrictions on access and disclosure, including means for protecting personal privacy and proprietary information; and

availability, which means ensuring timely and reliable access to and use of information."

While the business drivers (Risks, Objectives) and challenges (non-homogeneity, organizational size) may differ considerably across different market sectors, the basic requirements of Information Security remain the same. Pivot Point Security has worked extensively across market segments and with many of the worlds largest:Financial Institutions

State and City HYPERLINK "http://www.pivotpointsecurity.com/government-services/"HYPERLINK "/government-services/"Governments

Pharmaceutical Companies

Tele Communications Companies

Advertising / Media Organizations

Health Care Organizations

HYPERLINK "http://www.pivotpointsecurity.com/non-profit-organizations/"HYPERLINK "/non-profit-organizations/"Non-Profit Organizations

We have broken out a small handful of these market segments into specific sections on our website to make it easier for someone reviewing our site to determine our understanding of those market sectors that have some level of uniqueness relating to specific drivers and challenges.

Please do not look for client names or precise detail as to the work that we do. As Security Practitioners we understand the value of seemingly insignificant pieces of information as a basis for malicious action, and accordingly have a strict policy of non-disclosure of any client data, including names.

The next time you note a Security firm name-dropping in an attempt to gain your trust / business, ask yourself whose best interest they are really looking out for.

The role of stock exchangesStock exchanges have multiple roles in the economy, this may include the following:[1]

Raising capital for businessesThe Stock Exchange provide companies with the facility to raise capital for expansion through selling shares to the investing public.[2]

Mobilizing savings for investmentWhen people draw their savings and invest in shares, it leads to a more rational allocation of resources because funds, which could have been consumed, or kept in idle deposits with banks, are mobilized and redirected to promote business activity with benefits for several

economic sectors such as agriculture, commerce and industry, resulting in stronger economic growth and higher productivity levels and firms. Facilitating company growthCompanies view acquisitions as an opportunity to expand product lines, increase distribution channels, hedge against volatility, increase its market share, or acquire other necessary business assets. A takeover bid or a merger agreement through the stock market is one of the simplest and most common ways for a company to grow by acquisition or fusion.

Redistribution of wealthStock exchanges do not exist to redistribute wealth. However, both casual and professional stock investors, through dividends and stock price increases that may result in capital gains, will share in the wealth of profitable businesses.

Corporate governanceBy having a wide and varied scope of owners, companies generally tend to improve on their management standards and efficiency in order to satisfy the demands of these shareholders and the more stringent rules for public corporations imposed by public stock exchanges and the government. Consequently, it is alleged that public companies (companies that are owned by shareholders who are members of the general public and trade shares on public exchanges) tend to have better management records than privately-held companies (those companies where shares are not publicly traded, often owned by the company founders and/or their families and heirs, or otherwise by a small group of investors). However, some well-documented cases are known where it is alleged that there has been considerable slippage in corporate governance on the part of some public companies. The dot-com bubble in the early 2000s, and the subprime mortgage crisis in 2007-08, are classical examples of corporate mismanagement. Companies like Pets.com (2000), Enron Corporation (2001), One.Tel (2001), Sunbeam (2001), Webvan (2001), Adelphia (2002), MCI WorldCom (2002), Parmalat (2003), American International Group (2008), Lehman Brothers (2008), and Satyam Computer Services (2009) were among the most widely scrutinized by the media.

Creating investment opportunities for small investorsAs opposed to other businesses that require huge capital outlay, investing in shares is open to both the large and small stock investors because a person buys the number of shares they can afford. Therefore the Stock Exchange provides the opportunity for small investors to own shares of the same companies as large investors.

Government capital-raising for development projectsGovernments at various levels may decide to borrow money in order to finance infrastructure projects such as sewage and water treatment works or housing estates by selling another category of securities known as bonds. These bonds can be raised through the Stock Exchange whereby members of the public buy them, thus loaning money to the government. The issuance of such bonds can obviate the need to directly tax the citizens in order to finance development, although by securing such bonds with the full faith and credit of the government instead of with collateral, the result is that the government must tax the citizens or otherwise raise additional funds to make any regular coupon payments and refund the principal when the bonds mature.

Barometer of the economyAt the stock exchange, share prices rise and fall depending, largely, on market forces. Share prices tend to rise or remain stable when companies and the economy in general show signs of stability and growth. An economic recession, depression, or financial crisis could eventually lead to a stock market crash. Therefore the movement of share prices and in general of the stock indexes can be an indicator of the general trend in the economy.

Major stock exchangesTwenty Major Stock Exchanges In The World: Market Capitalization & Year-to-date Turnover at the end of January 2009RegionStock ExchangeMarket Value(millions USD)Total Share Turnover(millions USD)AfricaJohannesburg Securities Exchange432,422.117,999.7AmericasNASDAQ2,203,759.62,325,238.3AmericasSo Paulo Stock Exchange611,695.030,748.5AmericasToronto Stock Exchange997,997.484,323.0AmericasNew York Stock Exchange9,363,074.01,517,615.7Asia-PacificAustralian Securities Exchange587,602.737,400.1Asia-PacificBombay Stock Exchange613,187.614,425.0Asia-PacificHong Kong Stock Exchange1,237,999.580,696.8Asia-PacificKorea Exchange470,417.381,755.0Asia-PacificNational Stock Exchange of India572,566.839,057.1Asia-PacificShanghai Stock Exchange1,557,161.3142,144.2Asia-PacificShenzhen Stock Exchange389,248.375,365.5Asia-PacificTokyo Stock Exchange2,922,616.3301,781.5EuropeEuronext1,862,930.9146,173.3EuropeFrankfurt Stock Exchange (Deutsche Brse)937,452.9264,970.3EuropeLondon Stock Exchange1,758,157.7241,151.1EuropeMadrid Stock Exchange (Bolsas y Mercados Espaoles)871,061.4114,994.0EuropeMilan Stock Exchange (Borsa Italiana)456,206.748,094.8EuropeNordic Stock Exchange Group OMXHYPERLINK "http://en.wikipedia.org/wiki/Stock_exchange" \l "fn_1"1503,725.855,299.9EuropeSwiss Exchange761,896.163,435.6

Analysis Technical analysis is a method of predicting price movements and future market trends by studying charts of past market action. Technical analysis is concerned with what has actually happened in the market, rather than what should happen and takes into account the price of instruments and the volume of trading, and creates charts from that data to use as the primary tool. One major advantage of technical analysis is that experienced analysts can follow many markets and market instruments simultaneously. Technical analysis is built on three essential principles: 1. Market action discounts everything! This means that the actual price is a reflection of everything that is known to the market that could affect it, for example, supply and demand, political factors and market sentiment. However, the pure technical analyst is only concerned with price movements, not with the reasons for any changes. 2. Prices move in trends Technical analysis is used to identify patterns of market behavior that have long been recognized as significant. For many given patterns there is a high probability that they will produce the expected results. Also, there are recognized patterns that repeat themselves on a consistent basis. 3. History repeats itself Sensex patterns have been recognized and categorized for over 100 years and the manner in which many patterns are repeated leads to the conclusion that human psychology changes little over time. Some major technical analysis tools are described below: Relative Strength Index (RSI): The RSI measures the ratio of up-moves to down-moves and normalizes the calculation so that the index is expressed in a range of 0-100. If the RSI is 70 or greater, then the instrument is assumed to be overbought (a situation in which prices have risen more than market expectations). An RSI of 30 or less is taken as a signal that the instrument may be oversold (a situation in which prices have fallen more than the market expectations). Stochastic oscillator: This is used to indicate overbought/oversold conditions on a scale of 0-100%. The indicator is based on the observation that in a strong up trend, period closing prices tend to concentrate in the higher part of the period's range. Conversely, as prices fall in a strong down trend, closing prices tend to be near to the extreme low of the period range. Stochastic calculations produce two lines, %K and %D that are used to indicate overbought/oversold areas of a chart. Divergence between the stochastic lines and the price action of the underlying instrument gives a powerful trading signal. Moving Average Convergence Divergence (MACD): This indicator involves plotting two momentum lines. The MACD line is the difference between two exponential moving averages and the signal or trigger line, which is an exponential moving average of the difference. If the MACD and trigger lines cross, then this is taken as a signal that a change in the trend is likely. Number theory: Fibonacci numbers: The Fibonacci number sequence (1,1,2,3,5,8,13,21,34...) is constructed by adding the first two numbers to arrive at the third. The ratio of any number to the next larger number is 62%, which is a popular Fibonacci retracement number. The inverse of 62%, which is 38%, is also used as a Fibonacci retracement number. Gann numbers: W.D. Gann was a stock and a commodity trader working in the '50s who reputedly made over million in the markets. He made his fortune using methods that he developed for trading instruments based on relationships between price movement and time, known as time/price equivalents. There is no easy explanation for Gann's methods, but in essence he used angles in charts to determine support and resistance areas and predict the times of future trend changes. He also used lines in charts to predict support and resistance areas. Waves Elliott wave theory: The Elliott wave theory is an approach to market analysis that is based on repetitive wave patterns and the Fibonacci number sequence. An ideal Elliott wave patterns shows a five-wave advance followed by a three-wave decline. Gaps Gaps are spaces left on the bar chart where no trading has taken place. An up gap is formed when the lowest price on a trading day is higher than the highest high of the previous day. A down gap is formed when the highest price of the day is lower than the lowest price of the prior day. An up gap is usually a sign of market strength, while a down gap is a sign of market weakness. A breakaway gap is a price gap that forms on the completion of an important price pattern. It usually signals the beginning of an important price move. A runaway gap is a price gap that usually occurs around the mid-point of an important market trend. For that reason, it is also called a measuring gap. An exhaustion gap is a price gap that occurs at the end of an important trend and signals that the trend is ending. Trends A trend refers to the direction of prices. Rising peaks and troughs constitute an uptrend; falling peaks and troughs constitute a downtrend that determines the steepness of the current trend. The breaking of a trend line usually signals a trend reversal. Horizontal peaks and troughs characterize a trading range. Moving averages are used to smooth price information in order to confirm trends and support and resistance levels. They are also useful in deciding on a trading strategy, particularly in futures trading or a market with a strong up or down trend. The most common technical tools: Coppock Curve is an investment tool used in technical analysis for predicting bear market lows. DMI (Directional Movement Indicator) is a popular technical indicator used to determine whether or not a currency pair is trending. Unlike the fundamental analyst, the technical analyst is not much concerned with any of the "bigger picture" factors affecting the market, but concentrates on the activity of that instrument's market.

Fundamental analysis Fundamental analysis is a method of forecasting the future price movements of a financial instrument based on economic, political, environmental and other relevant factors and statistics that will affect the basic supply and demand of whatever underlies the financial instrument. In practice, many market players use technical analysis in conjunction with fundamental analysis to determine their trading strategy. Fundamental analysis focuses on what ought to happen in a market. Factors involved in price analysis: Supply and demand, seasonal cycles, weather and government policy. Fundamental analysis is a macro or strategic assessment of where a currency should be trading based on any criteria but the movement of the currency's price itself. These criteria often include the economic condition of the country that the currency represents, monetary policy, and other "fundamental" elements. Many profitable trades are made moments prior to or shortly after major economic announcements.

Positive Stock market news:1. Government stability is big positive reason for sensex.2. Global Telecom Companies are planning to buy 20-25% stake in Reliance Communications. R-Com stock lost 70% of value in 2008. Anil Ambani family holds 67% stake in the company. This deal is beneficial for investors as only 12% of shares are available for trading after this purchase in the secondary market. Promoter will not reduce his holding.3. Manpower survey: India is the second most optimistic employment market in the world but there will freezing in hiring in the next 3 months. IT and Hospitality sectors are the worst affected while Telecom is the most optimistic one.FCCB shocks: Foreign currency convertible bonds (FCCBs?) of many companies will be due for repayment in the next 3 years. As stock markets are unlikely to recover in the next 12-15 months, it is interesting to see how promoters will clear their dues. We may hear some shocking news on this front in the next 2 years.NPA shocks:Many people are underestimating the impact of Non Performing Assets (NPAs). NPAs will affect in 2 ways. NPAs will not only propel the negative sentiment but increase the banks reluctance to give loans which will once again destroy the positive aspects of the bailout packages. Only positive aspect is many PSU banks reported fall in NPAs in 2008 over 2007 except SBI and IOB.NPA statistics:NPAs of ICICI Bank in 2007: Rs 5,930 crore.NPAs of ICICI Bank in 2008: Rs 9,500 crore..Interesting statistics about Asian and World economies:1. World Bank estimates:A. November, 2008: World economy will grow by 2.2% in 2009.B. December, 2008: World economy will grow by 0.9% in 2009.2. ADB estimates about Asian economy in 2009:A. September, 2008: Asian economy will grow by 7.2% in 2009.B. December, 2008: Asian economy will grow by 5.8% in 2009.3. ADB estimates about Asian economy in 2008:A. September, 2008: Asian economy will grow by 7.5% in 2008.B. December, 2008: Asian economy will grow by 6.9% in 2008.4. Current P/E of Sensex: 10.P/E of Sensex in 2008 economic slowdown: 9.5This is a much severe crisis than 2001 slowdown.

RecessionA recession is a decline in a country's gross domestic product (GDP) growth for two or more consecutive quarters of a year. A recession is also preceded by several quarters of slowing down.

Causes of recession An economy which grows over a period of time tends to slow down the growth as a part of the normal economic cycle. An economy typically expands for 6-10 years and tends to go into a recession for about six months to 2 years. A recession normally takes place when consumers lose confidence in the growth of the economy and spend less. This leads to a decreased demand for goods and services, which in turn leads to a decrease in production, lay-offs and a sharp rise in unemployment. Investors spend less as they fear stocks values will fall and thus stock markets fall on negative sentiment.

Stock markets & recession The economy and the stock market are closely related. The stock markets reflect the buoyancy of the economy. In the US, a recession is yet to be declared by the Bureau of Economic Analysis, but investors are a worried lot. The Indian stock markets also crashed due to a slowdown in the US economy. The Sensex crashed by nearly 13 per cent in just two trading sessions in January. The markets bounced back after the US Fed cut interest rates. However, stock prices are now at a low ebb in India with little cheer coming to investors. When the global economy has been cooling down, and the financial sector in particular has been heading from one cold shower to the next, it was inevitable that stock markets around the world would start catching the chill. The way in which Asian stock prices responded last week to the fall of the Dow Jones and Nasdaq indices by 4 per cent, hitting a 10-month low, has also punctured a hole in the decoupling argument (which said Asia would not be hit by an America-based problem) that had become fashionable in recent weeks. Investors around the world have taken note of the fact that the broad-based S&P 500 index is at a 16-month low, along with European stocks. And investors seem to have little faith in the Bush rescue plan's ability to ward off a recession in the US. The Fed will almost certainly respond with sharp cuts in interest rates towards the end of the month, but the market has already discounted for that. Indian markets worst hit It is interesting that Indian markets were hit the most, among all Asian markets. This may have been because the correction in the overheated Chinese stock market began some weeks ago. Investors will also have noticed that the third-quarter corporate numbers show significant deceleration in both sales and profit growth, when compared to the same quarter a year earlier. When coupled with the data showing that the export target for the year will be missed by a wide margin, and that the industrial sector has suffered a sharp slowdown, it was inevitable that stock prices would have to come off their dizzy highs. What began with profit-booking and unwinding of long positions cascaded on Friday into a 3.5 per cent decline in the Sensex. Foreign institutional investors had moved to the sidelines in the secondary markets even earlier, and FIIs have been net sellers to the tune of Rs 2,200 crore (Rs 22 billion) in January. Also relevant was the Reliance Power IPO, which pulled in a record amount of application money (Rs 1,15,000 crore (Rs 1,150 billion)). Even if a third or a fourth of that was being garnered by sale of stocks, it is a large enough sum for the market to go into correction mode. There is no doubt that valuations had become expensive. Even after the 10 per cent correction from the market's peak, the Sensex trades at a trailing P/E multiple of 24.5, which is not cheap in anyone's book. Yet, buying may soon begin A global liquidity surplus had certainly contributed to momentum buying. The question is whether the correction that has occurred so far is enough for fresh buying to emerge, or whether a further fall is required before value-based buying starts. On a forward basis, the Sensex trades at an FY09 estimated P/E of 18. The floor therefore would probably be a Sensex level of 17,000-odd -- which would mean wiping out the gains of the past three months, no more. Provided the general economic and corporate news does not get worse than has already been anticipated, fresh buyingcannot be very far away.

Impact of a US recession on IndiaA slowdown in the US economy is bad news for India. Indian companies have major outsourcing deals from the US. India's exports to the US have also grown substantially over the years. The India economy is likely to lose between 1 to 2 percentage points in GDP growth in the next fiscal year. Indian companies with big tickets deals in the US would see their profit margins shrinking. The worries for exporters will grow as rupee strengthens further against the dollar. But experts note that the long-term prospects for India are stable. A weak dollar could bring more foreign money to Indian markets. Oil may get cheaper brining down inflation. A recession could bring down oil prices to $70. Between January 2001 and December 2002, the Dow Jones Industrial Average went down by 22.7 per cent, while the Sensex fell by 14.6 per cent. If the fall from the record highs reached is taken, the DJIA was down 30 per cent in December 2002 from the highs it hit in January 2000. In contrast, the Sensex was down 45 per cent. The whole of Asia would be hit by a recession as it depends on the US economy. Asia is yet to totally decouple itself (or be independent) from the rest of the world, say experts.Black Monday saw bloodbath on Dalal Street as the Indian stock markets crashed by over 1430 points in afternoon trade (the market has since then recovered somewhat), reminding investors that there is no one-way bet on the stock market.

factors. One, there is a change in the global investment climate. One of the primary triggers is the huge fear of the United States' economy going into a recession with foreign institutional investors trying to reallocate their funds from risky emerging markets to stable developed markets. Analysts are now expecting a cut in US interest rates. Hedge funds and FIIs could have been the biggest sellers in the Indian markets, booking profits and making the most of the unprecedented bull run that has dominated the Indian stock market for a long time now. The current volatility is also linked to global bourses. There is a big correlation among global markets. The presence of hedge funds across asset classes, along with increased global movement of capital, has increased event-related volatility. Volatility in commodities markets has also significantly affected equity markets. A combination of global and local factors is affecting this market, said Mihir Vora of HSBC Mutual Fund, on NDTV Profit. On the global front, other emerging markets were down nearly 20% so India is playing catch-up, he said. On the local front there has been a huge build-up in derivatives positions and volatility led to margin calls. Also many IPOs have sucked out liquidity from the primary market into the secondary market, said Vora. At current levels it would be a buy call and we would not advise investors to wait to catch the bottom, he added. Analysts expect the markets to continue to be choppy for a while till global liquidity and commodity prices settle in. With the markets falling, a technical correction in the derivatives segment has perpetrated a larger fall. The Sensex can fall another 10-15%, said Adrian Mowat of JP Morgan, on NDTV Profit. SWOT analysis:Strength:High returnLarge investmentAcquire capital for expanding the businessSecure the future losses

Weakness:High riskBased on the fluctuation. It becomes high loss when market goes down.Cant predict future Based on rumors

Opportunity:Lot of people wants to invest but dont invest due to insufficient knowledge.Market is providing new opportunities and new options to invest.

Threat :RecessionNew governmentBubble burstFluctuates dollar prices

MatrixSTRENGTHHigh returnLarge investmentAcquire capital for expanding the businessSecure the future losses

Weakness:High riskBased on the fluctuation. It becomes high loss when market goes down.Cant predict future Based on rumors

OpportunityLot of people wants to invest but dont invest due to insufficient knowledge.Market is providing new opportunities and new options to invest.

Threat RecessionNew governmentBubble burstFluctuates dollar prices

Conclusion:

Through this research we can conclude that:Stock market fluctuates by the external environment.Stock market is all about future prediction.Stock market is very sensitive market.It is based onhigh risk and high return.Comparatively stock market is less risky than the other market and generates more money for the economyOne who have good knowledge in stock market, may survive in the market and generates profits or good return whether the market is downInvestors should not invest on the basis of rumors they must observe the market condition or trends Indian economy and than invest If they wanna generate good return. Investors should invest for a long term purpose. It should not be on the basis of short term purpose.As a private investor, you can sometimes get on allocation of newly issued shares but the issue will be confined to institutional invertors .A scrip issue is designed to improve marketability of ordinary shares , and does not diluteyour ownership.

Investor should invest on the basis of result of company. That how the company is performing.Investor should not invest in C, D,group company . Investor should invest in A group company. Investor should not invest in small cap company.When the market is rising very fastly . make sure that it is going on the basis of fundamental . if it is not do not invest in stock market.Investor should not invest on the basis of report.Stock market are run by the big investor like FIIS , DIIS , MUTUAL FUNDS.When the market is all time high , do not invest in stock market.When you are going to invest in stock market get a full information about the company in which you want to invest .Stock market always affect by overseas market.

Bibliography Text books

The Stock Market-The Stock Market - Rik W.Hafer, Scott E. Hein, R. W.Hafer work package no. 6,7 & 8 Investment Analysis and portfolio management-M Raghunathan, Madhumati page no. 23,24,26,28,200,209

Journals and magazines Capital market 23rd feb to 08 march page no. 16-19Business world, 11 may 2009 page no. 34-39Barometer-January 2008 By Alvino-Mario Fantini and Hugo RestallJARN, Published Feb2009Business today Business standard

Websites: http://www.openarticlesubmission.com/article.php?id=national-stock-exchangewww.bseindia.comhttp://www.nseindia.com/content/equities/eq_listing.htmhttp://www.nseindia.com/content/nsccl/nsccl_introduction.htmhttp://tecun.cimex.com.cu/tecun/software/Soporte%20Tecnico%20de%20Redes/Cisco/Routers/7200-7500-7600/nse1_ds.pdfhttp://www.slideshare.net/dblacksmith/financial-mkthttp://moneymantrastock.com/basicofstockmarket/index.php/tag/what-is-the-difference-between-the-primary-market-and-the-secondary-market/http://finance.indiamart.com/markets/nse/www.swing-trade-stocks.comwww.wickypedia.com http://www.citehr.com/78851-format-details-required-indian-pay-slip.htmlhttp://www.dynemic.com/investor_relations.htmhttp://www.traderji.com/beginners-guide/25200-broker-subbroker.htmlwww.answers.comhttp://www.allbusiness.com/north-america/united-states-illinois-metro-areas-chicago/1067227-1.html

SOME OTHER WEB SITESwww.answers.comhttp://business.gov.in/business_financing/capital_market.php#www.angeltrade.comhttp://www.nseindia.com/marketinfo/companyinfo/online/boardmeetlist.http://www.sebi.gov.in/Index.jsp?contentDisp=Department&dep_idwww.shriraminsight.com

QUESTIONNAIRE NAME:ADDRESS:CONTACT NO:E-MAIL:

Q1. What is your occupation?a) Business b) Private Servicec) Govt. serviced) Housewife e) Studentf) Other________________

Q2. What is your annual income (Rs.)? a) Less than 200000 b) 200000 300000 c) 300000 500000 d) More than 500000

Q3. What is your annual saving (in Rs)? a) Less than 50000 b) 50000 100000 c) More than 100000

Q4. Where do you invest?a) Bankb) Mutual fundc) Share marketd) Post officee) Other_____________

Q5. What factors affect your investment?a) Return on Investment b) Riskc) Liquidity d) Safety

Q6. Do you invest in share market?a) Yesb) No (If yes then go to 07 otherwise go to 08)

Q7. Through which tool do you invest?a) Shareb) IPOc) Derivativesd) other_____________

Q8. Are you ready to invest in share market if you get higher return?a) Yesb) No

Q9. Which mediums do you prefer to invest your saving?a) Individual Advisorb) Bank Advisorc) Broker or Agencyd) Other_____________

Q10. Are you satisfied with your medium of investment?a) Yesb) No

_______________________________________________________ Thank you.