WHAT IS STOCK MARKET?
Different business in India are having their expansion plans, all together they can’t manage to have such big amount to use, so they are calling people to participate in their companies and get profit out of that in form of dividend, stock split, bonus share etc. Most stocks are traded on exchanges, which are places where buyers and sellers meet and decide on a price. Some exchanges are physical locations where transactions are carried out on a trading floor. The purpose of a stock market is to facilitate the exchange of securities between buyers and sellers, reducing the risks of investing.
WHY COMPANIES ISSUE STOCK?
- When a company would like to grow, it issues stocks to raise funds and pay for ongoing business activities.
- It is popular because:
I. The company does not have to repay the money
II. Paying dividends is optional
a) Dividends are distributions of earnings paid to stockholders
STOCK MARKET BASICS
- A stock is a tradable security that a firm issues to certify that the stockholder owns a share of the firm.
· A share represents an investor's ownership in a "share" of the profits, losses, and assets of a company. It is created when a business carves itself into pieces and sells them to investors in exchange for cash.
- In order to buy / sell a share, you need to first become a client of one of the stock market members who are commonly known as stock brokers.
STOCK EXCHANGE IN INDIA
- The Bombay Stock Exchange (BSE)
- National Stock Exchange of India Ltd (NSE)
FACTORS AFFECTING STOCK MARKET
1. Inflation
2. GDP
3. Global Markets
4. Govt policies
5. Market trends
6. Financial statements
7. News
FACTORS AFFECTING STOCK PRICE
- Financial statement
- Order book
- Management
- Land bank
- Future plans
- Growth
- Commodity prices
