Indian Stock Market (Structure )
The Indian stock market is made up of 22 stock exchanges. The most prominent among these are the Bombay Stock Exchange, National Stock Exchange, and Over the Counter Stock Exchange of India. According to the Securities and Exchange Board of India (SEBI), the regulatory authority, there were 1,680 registered foreign institutional investors (FIIs) in India as of August 13, 2009. Total investments by FIIs for this period amounted to $65.5 billion.
The Bombay Stock Exchange
Bombay Stock Exchange Limited is the oldest stock exchange in Asia. Popularly known as BSE it was established as "The Native Share & Stock Brokers Association" in 1875. It is the first stock exchange in India to obtain permanent recognition in 1956 from the Government of India under the Securities Contracts (Regulation) Act, 1956.
Bombay Stock Exchange played a pivotal role in the development of the Indian capital market and its index, SENSEX, is tracked worldwide. The Exchange has a nation-wide reach with a presence in 359 cities and towns of India. Since its inception BSE has played a vital role the growth of the Indian corporate sector by providing it with an efficient access to resources. The exchange provides an efficient and transparent market for trading in equity, debt instruments and derivatives. To reach out to a large number of investors BSE has launched its website in Hindi and Gujarati.
Bombay Stock Exchange has several achievements to its credit. It is the world's premier exchange in terms of the number of listed companies and the world's 5th in transaction numbers. BSE is the first exchange in India and the second in the world to obtain an ISO 9001:2000 certification. BSE has also received Information Security Management System Standard BS 7799-2-2002 certification for its BSE On-line Trading System (BOLT). It is only the second exchange in the world to receive such a certification. In February 2001, BSE introduced the world's first centralized exchange-based Internet trading system, BSEWEBX.com. It enables investors anywhere in the world to trade on the BSE platform.
BSE has won several awards for its efficient and responsible working. The World Council of Corporate Governance awarded the BSE with Golden Peacock Global CSR Award for BSE's initiatives in Corporate Social Responsibility (CSR). BSE has also won the Asia-Pacific HRM award for its excellent human resource practices.
BSE 100 Index
As BSE Sensex has only 30 scrips, a need was felt for a more broad-based index, which could also reflect the movement of stock prices on a national scale. In 1989, Bombay Stock Exchange Limited, started compilation and publication of an index series called "BSE National Index". The BSE National Index is now known as BSE 100 and since April 5, 2004 it is calculated on the basis of free-float market capitalization methodology.
BSE 200 Index
BSE 200 Index was constructed and launched on 27th May 1994. The number of companies listed on the Bombay Stock Exchange registered a phenomenal increase from 992 in the year 1980 to about 3,200 companies by the end of March 1994.
BSE 500 Index
On August 9, 1999, Bombay Stock Exchange constructed a new index, namely, BSE-500, consisting of 500 scrips in its basket. BSE-500 index represents nearly 93% of the total market capitalisation on Bombay Stock Exchange Limited.
Banking sector reforms such as fall in interest rates, and enactment of Securitization Bill have given a major fillip to Indian banking industry.
BSE PSU Index
BSE - Public Sector Undertaking (PSU) Index is a stock index that tracks the performance of the listed PSU stocks on the Exchange.
BSE TECk Index
The BSE-TECk is a stock index constituted of companies in the Information Technology, Media and Telecom sectors.
Sensex is the value-weighted index of the companies listed on the stock exchange. Bombay Stock Exchange (BSE) in 1986 came out with a stock index that subsequently became the barometer of the Indian stock marketThe National Stock Exchange (NSE) is India's leading stock exchange having national reach. It covers various cities and towns across the country. The exchange was founded by leading institutions with the objective of providing a modern, fully automated screen-based trading system with countrywide presence. NSE has ushered in transparency, efficiency, safety, market integrity and has played a key role in reforming the Indian securities market in terms of microstructure, market practices and trading volumes.
The National Stock Exchange of India Limited was created on the basis of the report of the High Powered Study Group on Establishment of New Stock Exchanges, which recommended promotion of a National Stock Exchange by financial institutions to provide access to investors from all across the country on an equal footing.
In 1992, NSE was incorporated as a tax-paying company unlike other stock exchanges in the country. In April 1993, NSE was recognized as a stock exchange under the Securities Contracts (Regulation) Act, 1956 and it commenced operations in the Wholesale Debt Market (WDM) segment in June 1994. The Capital Market (Equities) segment commenced operations in November 1994 and In October 1995, National Stock Exchange became the largest stock exchange in the country. NSE launched S&P CNX Nifty in April 1996. In June 2000, NSE started operations in Derivatives segment.
NSE is one of the largest interactive VSAT based stock exchanges in the world. Presently, it supports more than 3000 VSATs. The NSE- network is the largest private wide area network in India and the first extended C- Band VSAT network in the world. NSE.
S&P CNX Nifty
S&P CNX Nifty is a well-diversified 50 stock index accounting for 25 sectors of the economy. It is used for a variety of purposes such as benchmarking fund portfolios, index based derivatives and index funds. The base date selected for calculation of Nifty is November 3, 1995. The base value of the index is 1000 and it has a base capital of Rs.2.06 trillion.
The National Stock Exchange
Over the Counter Exchange
Established in 1990, Over the Counter Exchange of India (OTCEI) is the only exchange in the country that permits small and mid-sized companies, operational for less than three years, to raise funds in the capital market. It was the first exchange in India to permit market making---a two-way buy/sell order for securities.
The BSE Sensex consists of 30 large-cap companies in a smattering of industries including cement, telecommunications, real estate, banking, IT, construction, automobile, oil, pharmaceuticals, energy and steel. Major companies in the Sensex are Infosys Technologies (also listed in NASDAQ), Reliance, Tata Steel, Tata Power, and Tata Motors, which owns the Jaguar, Land Rover and Range Rover brands.
NSE 50 Components
The S&P CNX Nifty consists of 50 companies in 21 industries such as cement, telecommunications, pharmaceuticals, banking, automobile, construction, aluminium, oil exploration, gas and finance. Prominent companies are Bharat Heavy Electricals,Bharti Airtel, Cairn India, GAIL (India), Hero Honda Motors, Hindustan Unilever, Housing Development Finance Corporation and Infosys Technologies
Indian Stock Market (Investment )
The volatility of stocks creates risk as well as opportunities for profit.Investing in the stock market was once the sole province of the wealthy. However, financial education has improved and the widespread use of computers has made financial markets more accessible. While some people invest in stocks for the long term, others see more active trading as a means of income
Publicly traded companies issue common stock. The stock represents a distributed form of ownership and control. As such, stock is referred to as an equity instrument. This is to distinguish it from a debt instrument, like a bond. Stock usually pays dividends, distributions of the company's profits to the shareholders. Some investors purchase stock in the hopes that its price will rise and they will be able to realize a profit when they sell it. One of the attractive features of stock is that it allows ownership of the company to be mobile. A shareholder who wishes to give up ownership of his shares can simply sell them to someone who wants to obtain them.
The transfer of ownership of stock can take place on an individual basis, but it more typically occurs in stock markets. Within the context of a stock market, a buyer or seller for a given security can almost always be found in a short period of time. Virtually all modern markets are integrated with computer systems and networks, which often allow transactions to take place within seconds.
Stock markets have traditionally been accessed via stockbrokers. These professionals ensure that transactions are made according to applicable rules and laws and that the parties involved possess the needed securities and cash. With the improvement in telecommunications technology, many people now participate in the market directly via the Internet and online brokerages. Individuals vary in their levels of trading activity. Some are referred to as stock "investors" and others are called "traders." Investors typically purchase securities and hold them for years, selling only when they need the funds after retirement or using the stock to generate dividend income. Others participate in day trading, making hundreds or even thousands of trades per day, and often end the trading day in a wholly cash position.
To participate intelligently, which is to say profitably, you must educate yourself. Understanding corporate structure and financial principles and keeping abreast of the news is essential. A subject of special concern is "risk." Failing to fully understand the nature of risk and to quantify it with regard to your investment strategy and goals can be a costly experience. Fortunately, the material on all these subjects is widely available in books, on the Internet and via consultation with financial professionals
Indian Stock Market ( Basics )
India is one of the fastest growing nations in the world. A trend that is likely to continue into the future. Fast growing nations (economically speaking) have fast rising stock markets. How can you invest in India's stock market? Here is a way to do it.
1 In case you do not know, this is money.
This may be obvious to you, but since I am not assuming previous knowledge you should know that investing in financial markets requires money which you can earn, borrow, find, ask for, etc... For this way of buying shares/stocks in India's stockmarkets you need a MINIMUM of $10,000.
Once you have the money you should open a brokerage account that will allow you to buy all stocks sold in India's stock markets. The only online broker I know of that will allow you to do this is Interactive Brokers. A minimum of $10,000 will be required to open your account. Documentation you might need includes a government issued ID and a social security number.
Now you can use the list of Indian securities offered by Interactive Brokers, research them, and then just place your orders. Notice the symbol assigned to the stock and be sure to use that specific symbol
Indian Stock Market (Trading )
Both the BSE and NSE are located in India.Trading stock on the National Stock Exchange of India is an alternative to an at times unruly domestic market; however, both the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE) have intricacies of which you should be aware before investing any money at all. Each exchange's website provides tips to keep you---and your cash---safe while trading on foreign stock exchanges.
Employ a Reputable Broker
The Bombay Stock Exchange advises western investors to use a reputable stock broker who is registered with the exchange when trading in the BSE. This holds true for the NSE as well. Both of these exchanges take place beyond domestic borders, so the potential for fraud is exponentially higher due to the distance and lack of safeguards against such crimes. According to their website, all brokers whom the BSE trusts will have proof of registration with the exchange. The BSE also advises you to arrange legal contracts with your broker, as well as give him clear and unambiguous directions concerning how you want your money invested.
Know How You Want to Invest
Though it may sound elementary, you should know all of your options concerning the NSE and BSE before you start investing. According to the website Options Trading Advice, for instance, the NSE has streaming quotes for cash exchanges as well as stocks, futures and options trades. The NSE's website also lists several different schedules you could follow while investing, such as buying stock on margin. The BSE also advises investors to develop a trading strategy commensurate with their ability to handle risk and absorb potential losses. Indian exchanges are as volatile as any other, so it pays to do your research and, most importantly, stick with established companies and trades that you know are safe.
Avoid Cheap Stock
Cheap stocks are cheap for a reason. According to the BSE, you should be especially cautious about investing in cheaper stock that shows a sudden spike in trading activity or price. These financial products are often unstable or have incomplete records with the BSE, which could mean people who control the company are manipulating the financial product's statistics in order to trade it at a higher price.
Avoid Day Trading
Day trading is an investment strategy involving stock trades aimed at earning a profit in the extreme short-term. Day traders usually go for cheaper stocks and execute many daily trades to create a profit. This strategy is popular in the United States due to the potential of immense short-term profits; however, the strategy will not work as expediently on Indian markets because of the time difference. Having to employ brokers and ensure a company's reputation consumes a lot of time and might end up costing more money than it saves. The business website Rediff accounts two cheap Indian stocks whose prices were inflated after being re-listed on the BSE. The exchange had found them to be unstable and to have incomplete records, then subsequently revoked their ability to trade, which should signal red flags to any investor. When cheap stocks are dangerous and trading rapidly is hard to do, day trading is not a viable investment strategy.
Indian Stock Market ( FutureTrading )
With India's emerging economy in full swing, one could find success by investing in futures trading. But this is fairly new in India, so the steps listed below could prove vital when investing in India's commodities market.
Find a brokerage house with a solid background for providing top service.
Complete a demat account opening form with a brokerage house.
Pick the plan of brokerage that best meets your needs for return on costs.
Make sure you're clear of the service deliverables from your broker.
Ask for reports regularly and special training opportunities.
When you decide to invest, make sure to only focus on a few commodities. Gather necessary knowledge and pay up the initial amount for margin money, charges from opening the account and yearly maintenance charges.
Real Estate in India(Trading )
Non-resident Indians (NRIs), Persons of Indian Origin (PIOs), foreign nationals who are residents of India and foreign companies that have established a business or branch office in India are permitted by the Indian government to purchase real estate. According to the Reserve Bank of India, a foreign national of non-Indian origin residing outside India cannot purchase immovable property in India. However, high-net-worth, non-resident foreign nationals of non-Indian origin can invest in Indian property through India-focused real estate venture capital funds. Individuals can also invest in real estate mutual funds.
NRE / FCNR (B) / NRO bank account in India or NRI rupee account
Permanent Account Number (PAN) card
Stamped transfer deed of Power of Attorney
Valuation certificate of the property
Locate a Seller
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Pick the right builder
Locate a reliable builder through research and referrals. Use social networking tools such as LinkedIn and Facebook to gain information. Attend real estate expos by Indian developers held periodically for NRIs and PIOs in large U.S. cities; ethnic publications run ads and often provide sponsorships for such events. Several properties are specifically built for NRIs returning to India. These houses and apartments have Western-style designs such as an open kitchen or community clubhouse.
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Research property prices/valuation
Research price, location, and inventory. "Indian Realty News," a free online publication, lists current property values by state and location. You can also purchase in-depth market research reports from Colliers International, Cushman Wakefield, or Jones Lang LaSalle. Request friends and relatives to drive by the builder's past constructions.
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Loan application process
If required, apply for a home loan from any commercial bank in India. All major banks have branches globally. Shop around for best rates and deals. Loans made to NRIs should be repaid via India-based channels such as a Non-resident External account (NRE), Non-resident Rupee account (NRO), and Foreign Currency Non-resident account (FCNR). Funds can also be transfered from abroad in the form of inward remittances. Unlike loans offered to residents of India, NRI loans are for a shorter time period and do not cover the full cost of the property. Extensive documentation including visa, passport, bank statements, employment verification, tax returns, and guarantee by a third party (in some cases) are required. Banks require a property valuation certificate prepared by either a real estate agent or official appraiser.
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To minimize risk, hire a local property law firm to verify the authenticity of the title deed and identify possible loopholes in the agreement of the sale contract. Alternately, verify directly with the sub-registrar's office. Preferably, get your property listed as "Freehold" and obtain a written record acknowledging your ownership from the office of the sub-registrar. Obtain a completion certificate from the seller; you may have to ask for it. The buyer must file an IPI 7 form showing proof of purchase with the Reserve Bank of India within 90 days of purchasing the property. Register the sale of agreement under the 1908 Registration Act.
If you choose to rent out your property, you must have a Permanent Account Number (PAN) card. Taxes on rental income or from sale of property can be calculated and filed online at the Government of India's Income Tax Department website
Indian Stock Market(Currency )
With the growth of world stock exchanges, it is becoming relatively easy for investors to find investment alternatives throughout the world. Pure currency or equity and currency plays are a growing investor favorite. These investments should be made with the long view, especially for investments in equities and emerging market growth.
Trade currencies through one of three methods. Buy the stock of companies domiciled around the world where the stock is traded in currency other than the U.S. dollar. You assume stock and currency risk. Buy mutual funds that only represent overseas holdings and assume the risk of portfolio performance and currency fluctuation. Buy an exchange-traded fund that only invests in short-term instruments of different currency. You assume only currency risk.
Determine the risk you can tolerate and trade accordingly. The stock market can be used as a currency play on an intermediate or long-term basis. Transaction costs for currency plays are not as efficient the futures market, so day trading may not be efficient.
Study an ETF resource such as etf.stock-encyclopedia.com (see resources) for a list of all exchange-traded fund currency issues. It is best to use currencies that are widely established and tend to trend in broad-based moves, such as the U.S. dollar, the Swiss franc, the Euro, the British pound and the Brazilian real. You could also make a long-term play in a basket purchase of emerging-country currency.
Consider buying mutual funds and stocks of emerging countries. If the rate of growth of business and the increase of credit balances continue, the investor receives a double boost of good news--capital appreciation of stocks held in a relatively strong currency. This happened with Japan from 1945 to 1988.
Equities are the best way to play currency movements for the investor not prepared to make substantial commitments to the futures market. The ability to invest in straight currency plays or invest in the double-barrel effect of stock and currency markets is readily available through different instruments. A middle ground is to invest in a world bond fund where the portfolio is populated with intermediate-term bonds from around the world. This is not usually a good choice, however, as the yield is lower than other comparable alternatives, and all the different currencies tend to neutralize each other
Indian Forex Market (Basics )
Let's face it, its not easy understanding the the basics in currency trading nor the currency forex market. The currency market is volatile. Many argue, however that the stock market is way more volatile than the forex market and harder to leverage. Additionally the forex market never sleeps, its a 24 hour industry. But its deeply complex and relies on knowledge of macroeconomics and geopolitical events.
In essence you are trading one currency against another. And to really understand the currency trading and the currency forex market, you must dip your toe into the currency water.
Study major world currencies closely. With the currency forex market you are trading one currency against another. This is why understanding the basics in currency trading is so important, literally in an instant a geopolitical event could spur a drastic swing in one currency's strength against another.
Consult an excellent broker. To really understand if you are in the financial position to stomach the varied risks in the the currency forex market, you need to speak to a professional.
Sign up for a really good forex currency trading account. This account should pictorally represent the currency trading market in various ways from box trade diagrams to a world globe, people have different preferences for learning and operating-find a software application and company that offers a varied level of forex trading and pictoral representation.
Once you've decided on the currency trading account, download software.
Begin doing currency forex market trading with a TEST account.
Continue to study the hows and whys of a currency responding to other outside variables including rate hikes and political pressures and events.
Continue to make play trades until the majority of your trades are successful with minimized risk.
Start trading in small increments with your own money.
Indian Forex Market ( Managing )
Forex is an abbreviation for the foreign exchange market, which allows banks and other similar institutions to easily buy and sell currencies. Its basic purpose is to help in international trade and investment. It also helps businesses to convert one currency to another. Forex currencies are traded in much smaller divisions than cash; the smallest division is called pip (short for price interest point). It's important to understand the basic math behind forex trading. Learning how to report forex profits and losses also assures you of your broker's honesty.
Note these two formulas for calculating profit and loss from a forex transaction on a blank sheet of paper. When U.S. dollars are the quote currency (the second currency in a pair), the formula is Profit = Price Change in Pips X Units Traded. When USD is the base currency (the first currency in a pair), the formula is Profit = Price Change in Pips X Units Traded / Exit Price
Find out whether USD is the quote currency or the base currency. Note the complete transaction on the page to begin calculations.
Calculate the price change in pips by subtracting the price at which the other currency was bought from the price it was sold. Consider profits if the prices increased. Report losses if sold at decreased price. For example, if EUR/USD was trading at 1.2518/9, $100,000 units were bought at 1.2519 and sold when price rose to 1.2532. Since price increased, profit = 13 pips or 0.0013 (1.2532 -- 1.2519).
Calculate the profit with the calculator using the first formula noted on top of the sheet. For above example, Profit = 0.0013 x 100,000 = $130.00.
Use the second formula for profit/loss if USD is the base currency. For example, 100,000 units are bought of USD/JPY at 117.22. The price falls, and units are sold at 117.12. Calculate the pips in loss since the selling price is low. For given example, Pips = 10 (117.22 -- 117.12)
Calculate the net loss by using the second formula in the calculator. Loss = Price Change in Pips X Units Traded / Exit Price. For the above example, Loss = .10 x 100,000/117.12 = $85.38. Report the final and net profits and losses on each transaction on a new blank sheet of paper.
Indian Forex Market (Calculation)
Thousands of aspiring Forex traders come to the market each year to make their fortune, but many gloss over the fact that Forex trading is a business and, as in any business, you need to learn how to calculate profit and loss. Fortunately, it's not that hard if you understand a few simple formulas which will help you keep track of how you're winning at the trading game.
Write out this simple formula on a paper pad: Profit = Price Change in Pips x Units Traded. For example, if your Forex broker requires a 1% margin for you to trade any currency pair, then you can control up to $100,000 with $1,000. So, in this example, if you buy 10 lots of a given currency pair to go long, then you control over $1,000,000 in this currency. Mark down the number of lots you have traded for the "Units Trading" component of the equation.
Use the same example as if you were buying a currency pair at price of 1.25 to go long and then make note of your entry price.
As the trade progresses, you then sell it at 1.40. Then you will have made 15 percentage in points, or pips. A pip is the smallest change of price for any foreign currency listed on the Forex. On a standard Forex lot, a pip is equal to $10 when the USD is the quote currency, so you will have earned $150 (15 pips X $10 per pip) per standard Forex lot in this example.
Using the Profit = Price Change in Pips x Units Traded formula to calculate Profit/Loss, your calculation would break down as $1,500 = 15 Pips gained x 10 Standard Forex Lots
National Association of Securities Dealers Automated Quotations, more popularly known as The NASDAQ, is the name of the American stock exchange. Credited for being the largest electronic screen-based equity securities trading market in the United States today, it was founded in the year 1971, by National Association of Securities Dealers (NASD). It began trading on 8th February 1971 and at the time it was the first electronic stock market in the world. The dealers (under NASD) divested themselves of the shares of The NASDAQ, through a series of sales that were carried out in 2002 and 2001.
After the divestment by National Association of Securities Dealers, The NASDAQ came to be owned as well as operated by the NASDAQ Group. It was, and presently is, monitored by the Securities and Exchange Commission (SEC). In February 2008, NASDAQ Group took over Nordic-based operated exchange OMX, creating a trans-atlantic powerhouse, to be known as NASDAQ OMX Group. Apart from The NASDAQ, NASDAQ OMX Group operates eight stock exchanges in Europe and holds one-third of the Dubai Stock Exchange. NASDAQ is the second largest exchange in the United States.
At present, The NASDAQ boasts of a listing of as many as 3,300 companies. This has made its per-hour trading volume much more than that of any other stock exchange in the world. It also serves as the primary market for trading NASDAQ-listed stocks. Approximately 54% of NASDAQ-listed shares traded are reported to NASDAQ systems. The electronic stock exchange allows multiple market participants to trade through its electronic communications networks (ECNs) structure, thereby increasing competition.
The NASDAQ Stock Market
One Liberty Plaza
New York, NY 10006