Basics of Share Market– is where buying and selling of share happens. A share represents the unit of ownership of the company from where you have bought it. Like you bought 10 shares of Rs 50/- each of XYZ company then you will become a shareholder of XYZ company. This allows you to sell XYZ shares anytime whenever you want. By buying a share you are investing money in a company and when the company grows, the price of the share will also increase. You can get a profit by selling those shares in a market.
A company sells it’s shared because it requires capital for expansion and development due to this reason company raises money from the public.
Bull Market is one where the price of the stocks keeps on increasing or rising while the Bear market is where the price of stock keeps on declining.
There are two major stock exchanges regulated by SEBI in India are NSE (National Stock Exchange) & BSE (Bombay Stock Exchange). Brokers act as an intermediary between the stock exchange and investor. If a person wants to invest so it must have to open a Demat and Trading account.
Share market plays a vital role in assisting the company to raise its capital for growth and development. You can be a trader or investor in the share market. A trader holds the stock for a short period of time while the Investor holds the stock for a longer period of time.
From three ways many grows
- Capital Growth
Dividends– This is the profit earned by the company and it is distributed to shareholders according to the number of shares owned by him in the company.
Capital Growth– The investment in equities and shares leads to capital appreciation. The returns are dependent on the duration of investment but the risk is also associated with it.
Buyback– The buyback it’s shared from their investors by paying a higher value than the market value when to consolidate the ownership of that investor.
Share Market is of two types:
- Primary Market
- Secondary Market
A company enters in the primary market to raise funds. In this, a company gets registered to issue its shares to the public and raise the capital from them while in secondary market investors trade is already listed securities by buying and selling them. It offers the investor a chance to sell all of its shares and can exit from the market.
Also Read– The Effects of Fiscal Deficit on Economy
Sensex– It is a benchmark index of BSE, it comprises of 30 largest and most actively traded stocks on BSE. It is the oldest stock index in India and the analysts use this to observe the growth and development of industries as well as the Indian Economy.
Few companies listed in Sensex
- Tata Consultancy Services
- Hindustan Unilever Ltd
- Infosys Ltd
- Larsen & Toubro Ltd
- Nestle India Ltd
- State Bank of India
Nifty– It is the index of 50 most actively traded stocks from all the sectors and it represents the stocks of NSE. It is calculated by using the market capitalization sighted method and sights are assigned according to the size of the company.
Few companies listed in Nifty
- Coca Cola Company
- Pepsi Co
- General Electric
- Phillip Morris
- Procter & Gamble
- Black & Decker
- The Walt Disney
Safety is in the defensive part now so there are opportunities in pharmaceuticals. Insurance firms including ICICI securities and HDFC Life look interesting for the long term because health care and lifestyle are going to see the major changes after the COVID-19. Havells can become a larger competitor in the next 3-5 years. If the government removes the lockdown then recovery will come first in two-wheeler vehicles there will be numerous new launches & innovations so it will increase the domestic market share.