An equity share, more frequently referred to as an ordinary share signifies the form of a part ownership in which a shareholder carries out the commercial risks linked with a business enterprise as a fractional owner.
The Indian Equity Market, also known as the Indian share market, ranks third in size in Asia close on the heels ofChina and Hong Kong with a market capitalization of nearly $600 billion.
1. The History:
The first stock exchange of India flourished in the Dalal Street in 1854. That place is now known as the Bombay Stock Exchange (BSE) which was established in 1875 and was the first stock exchange in Asia. Even after so many years, BSE Sensex is one of the chief parameters to measure the strength of the economy in India.
The National Stock Exchange or NSE came into the picture in 1993. In a matter of few years, trading on both the exchanges changed to an automated trading environment.
2. NSE and BSE:
The two major stock exchanges of India are NSE and BSE. Almost all the trading of the equities in this country occurs on these two exchanges.
The BSE has listed about 4700 companies whereas NSE has listed 1200. NSE controls in spot trading and has a monopoly in terms of derivative trading.
3. Trading system:
The trading system is highly order driven, where the trading happens over an open electronic limit order book, and order matching is done with the help of a trading computer.
Since all buy and sell orders are exhibited in the trading system, this constitutes a more transparent system.
4. Trading Hours:
The trading hours of stock exchanges are from 9:15 am to 3:30 pm, Monday to Friday.
5. Market Indexes:
The two foremost market indexes in India are Nifty and Sensex. Sensex is the oldest and provides data on BSE, whereas Nifty provides on NSE.
6. Types of funds:
The Indian equity market carries out business with two kinds of funds, namely private equity fund and venture capital fund.
It also includes the debt market which is restricted by the primary dealers, wholesale dealers, and banks.
7. Factors that affect the Indian Market:
Global funding into equity
Performance of the corporate houses
8. Supervision of the Indian Market:
The functions of India’s Equity Market are managed by SEBI (Securities Exchange Board of India).
SEBI lays down market rules to enforce best market practices. It can entail penalties on any market participant, if there is any form ofviolation.
9. Investment in India:
Foreign investments are of two kinds: foreign direct investment (FDI) and foreign portfolio investment (FPI).
To make portfolio investment in India, one should be listed as a foreign institutional investor (FII). This is a status which is approved by the market regulator, SEBI.
10. Ways to make Investment:
In order to get into the world of online trading, it requires a trading account or a demat account at any of the leading banks.
These will be linked to your regular accounts to assist the transfer of funds.
The Indian Equity Market has been on a rise for a very long time.