Presented By :

Aditya Bhujbal M-3005

Sushant Gawali M-3010
Pritam Jadhav M-3013
Nikhil Kurle M-3025
Kaustubh Patil M-3038
LOGO

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Stock Market
Indices

A, B, C,… of Stock
Market
Aditya

Pritam Jadhav
M-3013
 Agenda
The Stock Market is a very Introduction to stock
broad term which involves About Stock Market
trading of variety of
entities. History of stock market indices
This presentation provides Introduction of stock market indices
basics of some of the terms
& understanding of stock Why do we need stock market indices?
market indices at macro Stock index calculation
level. Types stock market indices
In this we will focus on
BSE, NSE, NIFTY, SENSEX.
 Introduction to Stock

A stock is a small share that represents a partial ownership of a

company.

Stocks are issued by companies in order to raise capital.

Stock is also referred to as equity, & it is limited to particular

number of shares.
 About Stock Market

“Stock market” is a term used to describe the physical location

where the buying and selling of stocks take place.
The correct term to be used in pertaining to the physical location
for trading stocks is “stock exchange.”
The Stock market in India consists of about approx. twenty two
stock exchanges.
The stock exchanges constitute a market where securities issued by
the Central & State Govt., Public bodies & Joint Stock companies
are traded.
 The early history of stock market
indices

Stock market indices are vital to



macroeconomists as well as to actors in the

financial world, indices consistently build on
the long term are essential to assess those
regularities that help understanding the actual
behavior of financial actors, the evolution of
the economy and its position in international
comparisons.
 Stock market indices : INTRODUCTION

 A stock market index tracks the movement of a

market as a whole. Other indices track the
performance of sectors, regions and different
class of security.
 The basic data used to calculate an index are
securities prices, but the calculation of an index
means weighting price changes appropriately
to reflect company size and the availability of
securities to investors.
 Why do we need Stock market
indices?

1. They provide a historical comparison of returns

on money invested in the stock market against
other forms of investments such as gold or
debt.
2. They can be used as a standard against which to
compare the performance of an equity fund.
3. It is a lead indicator of the performance of the
performance of the overall economy or a
sector of the economy.



 Stock index calculation

 Index level = Σ(P1 * Q1) / Σ(P0 * Q0)*

Base
index value.


 P1 = Current value securities

 Q1 = No.of currently outstanding shares

P0 = Base period price of securities

Q0 = Base period quantity of securities
 Types of stock market indices

 Free float capitalization weighted

indices


 Price weighted indices



 Fundamentally based stock indices

KP

Kaustubh Patil
M-3038
 NATIONAL STOCK EXCHANGE (NSE)
 BOMBAY STOCK EXCHANGE (BSE)
 STOCK MARKET INDICES- NIFTY
 DOW
JONES
 FTSE
INDEX
•
•
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 INTRODUCTION

 MUMBAI BASED STOCK EXCHANGE

 LARGEST STOCK EXCHANGE
 MARKET CAPITALIZATION- 47,01,923
CRORE
 MOST SIGNIFICANT

 FEATURES

 OWNED BY SET OF FINANCIAL

INSTITUDE, BANKS, INSURANCE
COMPANY
 FOREIGN INVESTMENT
 WIDE RANGE
 2ND LARGEST STOCK MARKET IN
SOUTH ASIA
 3RD LARGEST IN WORLD
 2ND FASTEST GROWING IN WORLD
 INNOVATINS

 Setting up the first clearing corporation "National

Securities Clearing Corporation Ltd." in India.
 Co-promoting and setting up of National
Securities Depository Limited, first depository
in India
 Setting up of .
 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 .
 NSE.IT Limited, setup in 1999 , is a 100%
subsidiary of the National Stock Exchange
of India
 MARKETS

Currently, NSE has the following major



segments of the capital market:

 Equity
 Futures and Options
 Retail Debt Market
 Wholesale Debt Market
 Currency futures

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BOMBAY STOCK
EXCHANGE (BSE)
 INTRODUCTION

 OLDEST STOCK MARKET IN ASIA

 ESTABLISHED AS “NATIVE SHARE &
STOCK BROKER ASSOCIATION”
 PERMANENT RECOGNISATION
 MAJORE ROLE

 FEATURES

 GROWTH OF INDIAN CORPORATE

SECTOR
 LINKED WITH MAJORE CORPORATE
 NUMBER 1 EXCHANGE IN TERMS OF
LISTED COMPANY
 WORLDS 5TH IN HANDLING
TRANSACTION THROUGH
ELECTRONIC TRADING SYSTEM
 MARKET CAPITALIZATION- $1.6
TRILLION
 INNOVATION

 1ST NATIONAL LEVEL STOCK

EXCHANGE TO LAUNCH WEBSITE IN
VARIOUS LANGUAGE
 SUCCESSFULLY LAUNCHED A
REPORTING PLATFORM FOR
CORPORATE BOND
 IN 2006 LAUNCHED DIRECTORS
DATABASE AND ICERS TO
FACILITATE INFORMATION AND
INCREASE TRANSPARENCY
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NIFTY
 INTRODUCTION

 The S&P CNX Nifty, or simply Nifty, is

the leading index for large
companies on the National Stock
Exchange of India. It consists of 50
companies representing 24 sectors
of the economy, and representing
approximately 47% of the traded
value of all stocks on the National
Stock Exchange of India. "
 FEATURES

 The average total traded value for the last

six months of all Nifty stocks is
approximately 77% of the traded value of
all stocks on the NSE
 
 Nifty stocks represent about 61% of the
total market capitalisation as on August
31, 2004.
 
 Impact cost of the S&P CNX Nifty for a
portfolio size of Rs.5 million is 0.10%
 
 S&P CNX Nifty is professionally maintained
and is ideal for derivatives trading.
 
 DOW JONES INDEX

 World's most popular stock market

indices.
 It tracks the performances of 30
important ant stocks in America.
 Most famous international American
companies included are Bank of
America, Dupont,
Cococola,Microsoft, Pfizer etc
 There are companies from every
important sectors like Information
technology, Computers, Banking,
 FTSE Index
 FTSE index is managed by FTSE
Group,
 There are various indices in FTSE like
FTSE100, FTSE 30etc.
 These indices primarily reflect the
performance of London Stock
Exchange
 FTSE 100 is an index which tracks
the performance of top 100
companies.
 It reflect 80 percent market
Aditya

Nikhil Kurle
M-
3025
LOGO

LOGO
 SENSEX-The Barometer of Indian
Capital Market

ØLaunched in the year

1986 .

ØBSE Sensex is a value -

weighted
index composed of 30
stocks .
ØSENSEX is a basket of 30
constituent stocks .
 Cont……

Ø The base period of SENSEX

 is 1978 - 79 and the base
 value is 100 index points .


Ø SENSEX is calculated every

 15 seconds .
Ø
Ø SENSEX is calculated using the
 " Free - float Market
 Capitalization" methodology .
•
 SENSEX Milestone

Ø 25th July 1990



Ø 15th Jan 1992

Ø
Ø 29th Feb 1992
Ø
Ø 11th Feb 2000
Ø
Ø 7th Feb 2006
Ø
Ø 30th Oct 2006
 Cont….

Ø 6th July 2007

Ø
Ø 9th Oct 2007
Ø
Ø 15th Oct 2007
Ø
Ø 29th Oct 2007
Ø
Ø 21th Jan 2008
Ø
Ø 02th March 2010
Ø
 BSE INDEX FAMILY
BSE 100 BSE 200 BSE 500 BSE Mid cap BSE PSU
and BSE small cap

Base Year 1983-84 1989-90 Feb. 1, 1999 2002-2003 February 1,

1999
Base Index 100 100 100 1000 1000
Value
Date of Jan. 3, May 27, Aug. 9, 1999 April 11, 2005 June 4, 2001
Launch 1989 1994
Number of 100 200 500 Variable to The BSE is
scrips represent 15% a
and 5% market sub set of
capitalisation 500
index. BSE-
500
Index Real Real Time Real Time Real Time Real
indexTime
calculation Time
frequency
Aditya

Aditya Bhujbal
M-
3005
 NSE INDEX FAMILY

 S & P CNX Nifty

 CNX Nifty Junior
 CNX 100
 S & P CNX 500
 CNX Midcap
 Nifty Midcap 50
 S & P CNX Defty
 What is Stock?
A stock is a small share that
represents a partial ownership of a
company .

•
Stocks are issued by companies in
order to raise capital .

•
Stock is also referred to as equity , &
it is limited to particular number
of shares .
•
 How Stocks are priced?
Latest         52 Weeks        
Change
  symbol net % time high low volume high low
price
BCE 31 . 15 - 0 . 5 - 1 . 5 16 : 57 31 . 75 31 . 1 3 , 643 , 000 33 27 . 2

BGM 17 . 06 - 0 . 3 - 1 . 6 15 : 54 17 . 3 17 207 , 400 26 . 9 17 . 1

IBM 79 . 82 - 0 . 3 - 0 . 4 16 : 01 80 . 68 79 . 6 4 , 999 , 200 99 . 1 71 . 9

MSFT 24 . 67 - 0 . 3 - 1 . 2 16 : 00 25 . 05 24 . 7 73 , 696 , 70 27 . 9 23 . 8
0
Stock Quote
Table
First Column indicates abbreviation of name of company .

Latest Price indicates current price or closing price of th

day ( if in newspaper )

Change ( net ) is difference between the previous day closing

price & current stock quote .
 How Stocks are priced?
Latest         52 Weeks        
Change
  symbol net % time high low volume high low
price
BCE 31 . 15 - 0 . 5 - 1 . 5 16 : 57 31 . 75 31 . 1 3 , 643 , 000 33 27 . 2

BGM 17 . 06 - 0 . 3 - 1 . 6 15 : 54 17 . 3 17 207 , 400 26 . 9 17 . 1

IBM 79 . 82 - 0 . 3 - 0 . 4 16 : 01 80 . 68 79 . 6 4 , 999 , 200 99 . 1 71 . 9

MSFT 24 . 67 - 0 . 3 - 1 . 2 16 : 00 25 . 05 24 . 7 73 , 696 , 70 27 . 9 23 . 8
0
Stock Quote
Table
High indicates the highest price while low indicates lowest
price of the stock sold .

Volume describes the no . of shares traded for that day .

The 52 - week high & low shows the highest & lowest prices in
the previous year .
How Stocks are priced?

PE – Price to Earning ratio .

Price per share divided by
earning per share .
 What is P/E Ratio?

 Definition –
 “ Price/Earnings ratio. The most
common measure of how expensive
a stock is. The P/E ratio is equal to a
stock's market capitalization divided
by its after-tax earnings over a 12-
month period.”
 P/E Ratio is calculated as:

 eg. If a company is currently

trading at $43 a share and earnings
over the last 12 months were $1.95
per share. = $ 22 . 05
$1 . 95 $43 ..



Security Name Close ( Rs .) EPS PE

20 MICRONS 40 . 55 0 . 93 43 . 42

3I INFOTECH 73 . 65 9 . 40 7 . 83

3M INDIA 2 , 041 . 20 57 . 66 35 . 40

AARTI DRUG 90 . 35 12 . 43 7 . 27

AARTI INDS 44 . 50 11 . 01 4 . 04

AARVE DENIM 56 . 65 1 . 05 53 . 85

ABAN OFFSHOR 1 , 183 . 10 59 . 69 19 . 82

Security Name Close ( Rs .) EPS PE

ABAN OFFSHOR 1 , 180 . 50 59 . 69 19 . 78

ABB 794 . 75 16 . 74 47 . 49

ACC 922 . 95 85 . 58 10 . 78

ADANI ENTER 486 . 00 6 . 60 73 . 65

ADITYA BIRLA 840 . 85 13 . 34 63 . 03

AKRUTI CITY 484 . 95 37 . 15 13 . 05

ALLAHA . BANK 132 . 65 17 . 21 7 . 71

Sushant Gawali
M-
3010
 Role of Stock Exchange in economy

1.Raising capital for businesses

2.Mobilizing savings for
investment
3.Facilitating company growth
4.Redistribution of wealth
5.Corporate governance
6.Creating investment opportunities
for small
 investors
7.Government capital-raising for
development
 projects
8.Barometer of the economy
9.Regulation of companies Growing job
opportunities
10.Employment Opportunities
 Two basic analytical methodology

 Fundamental analysis maintains that

markets may misprice a security in
the short run but that the "correct"
price will eventually be reached.
Profits can be made by trading the
mispriced security and then waiting
for the market to recognize its
"mistake" and reprice the security.
•
 Technical analysis maintains that all
information is reflected already in the
stock price, so fundamental analysis
is a waste of time. Trends 'are your
friend' and sentiment changes
predate and predict trend changes.
Investors' emotional responses to
price movements lead to recognizable
price chart patterns. Technical
analysis does not care what the
'value' of a stock is. Their price
6 Steps of Investment in Share Market

Step 6

Step 5 •Start Early

Step 4 •Passions

Step 3 •Consistency in
Investment
Step 2 •Tips and Hot stocks
are risky
•Simplicity
Step 1

•Developing the
vision
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