A

PROJECT REPORT
ON
A GENERAL STUDY OF INDIAN SHARE MARKET
A REPORT SUBMITTED TO RASHTRASANT TUKADOJI MAHARAJ NAGPUR
UNIVERSITY NAGPUR IN PARTIAL FULFILLMENT OF THE REQUIREMENTS OF
BACHELOR OF BUSINESS ADMINISTRATION (BBA )COURSE, SPECIALSATION IN
FININCIAL MANAGEMENT FOR
THE ACADEMIC SESSION 2009-2010

PREPARED BY :-
SHEKHAR Y. MAHALE

GUIDED BY :-
PROF. SANDESH TITRE



KAMLA NEHRU MAHAVIDYALAYA
Sakkardara Chowk, Nagpur.
CERTIFICATE

This is to certify that SHEKHAR Y. MAHALE Bonafied Student of the
Bachelor of Business Administration (BBA) course, Specialization in FINANCIAL
MANAGEMENT, session 2009-2010, of the KAMALA NEHRU
MAHAVIDYALAYA, NAGPUR.
The candidate has worked under the supervision of PROF. SANDESH
TITRE and has satisfactory conducted project work for not less than one
academic session. The project submitted by him is his own work and is
complete so as to warrant its presentation for examination. This project work
entitled
A GENERAL STUDY OF INDIAN SHARE MARKET
Which is in partial fulfillment requirement for the above course, is being
forwarded to



SANDESH TITRE DR.A. K. SHENDE
(PROJECT GUIDE ) ( PRINCIPAL)



DECLARATION

I SHEKHAR Y. MAHALE here by declare that with the exception of
the suggestion and guidance received from my supervisor a this project titled
A GENERAL STUDY OF INDIA SHARE MARKET is my original work. This
dissertation as one, which is substantially the same as this has not been
submitted by me for any other examination of this university or any other
university.




Nagpur BBA III
Date: - (2009-2010)








ACKNOWLEDGEMENT
This project is the outcome of the help and encouragement provided by
all faculty members, who were a continuous source of inspiration and who
guided me in all my endeavors.
I take this opportunity to thank all those who were a great support behind
this project and without their unconditional support this project on this paper
would not have been completed.
First of all I would like to thank my parents for giving me back-up and full
support in completing this project.
My heart felt gratitude to Prof Head of Department, KAMLA NEHRU
MAHAVIDYALAYA Nagpur for making available all the resources.
I am indebted to PROF. SANDESH G.TITRE my chief guide without whose
support and timely suggestion this report would not have been completed. I
express my sincere thanks to other staff members of my institute who directly
or indirectly helped me in preparation of my project.
Last but not least I would like to thank all those who are not mentioned,
but whose contribution has been instrumental towards completion on of this
project.
SHEKHAR Y. MAHALE
(BBA Final year)


INDEX
Serial
no.

Chapters
Page
No.
1
Introduction

2
Research Methodology

3
Hypothesis

4
Data collection

5
Data Analysis

6
Conclusion




Bibliography




















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i in nt tr ro od du uc ct ti io on n

INTRODUCTION TO INDIAN MARKETS

Of all the modern service institutions, stock exchanges are
perhaps the industrial revolution, as the size of business enterprises
grew, it was no longer possible for proprietors or partnerships to raise
colossal amount of money required for undertaking large entrepreneurial
ventures. Such huge requirement of capital could only be met by the
participation of a very large number of investors; their numbers running
into hundreds, thousands and even millions, depending on the size of
business venture.
In general, small time proprietors, or partners of a
proprietary or partnership firm, are likely to find it rather difficult to get
out of their business should they for some reason wish to do so. This is so
because it is not always possible to find buyers for an entire business or a
part of business, just when one wishes to sell it. Similarly, it is not easy for
someone with savings, especially with a small amount of savings, to
readily find an appropriate business opportunity, or a part thereof, for
investment. These problems will be even more magnified in large
proprietorships and partnerships. Nobody would like to invest in such
partnerships in the first place, since once invested, their savings would be
very difficult to convert into cash. And most people have lots of reasons,
such as better investment opportunity, marriage, education, death,
health and so on for wanting to convert their savings into cash. Clearly
then, big enterprises will be able to raise capital from the public at large
only if there were some mechanism by which the investors could
purchase or sell their share of business as and they wished to do so. This
implies that ownership in business has to be broken up into a larger
number of small units, such that each unit may be independently & easily
bought and sold without hampering the business activity as such. Also,
such breaking of business ownership would help mobilize small savings in
the economy into entrepreneurial ventures. This end is achieved in a
modern business through the mechanism of shares.

What is a share?
A share represents the smallest recognized fraction of ownership
in a publicly held business. Each such fraction of ownership is represented
in the form of a certificate known as a share certificate. The breaking up
of total ownership of a business into small fragments, each fragment
represented by a share certificate, enables them to be easily bought and
sold.

What is a stock exchange?
The institution where this buying and selling of shares
essentially takes place is the Stock Exchange. In the absence of stock
exchanges, i.e. Institutions where small chunks of businesses could be
traded, there would be no modern business in the form of publicly held
companies. Today, owing to the stock exchanges, one can be part owners
of one company today and another company tomorrow; one can be part
owners in several companies at the same time; one can be part owner in
a company hundreds or thousands of miles away; one can be all of these
things. Thus by enabling the convertibility of ownership in the product
market into financial assets, namely shares, stock exchanges bring
together buyers and sellers (or their representatives) of fractional

ownerships of companies. And for that very reason, activities relating to
stock exchanges are also appropriately enough, known as stock market or
security market. Also a stock exchange is distinguished by a specific
locality and characteristics of its own; mostly a stock exchange is also
distinguished by a physical location and characteristics of its own. In fact,
according to H.T.Parekh, the earliest location of the Bombay Stock
Exchange, which for a long period was known as the native share and
stock brokers association, was probably under a tree around 1870!
The stock exchanges are the exclusive centers for the trading of
securities. The regulatory framework encourages this by virtually banning
trading of securities outside exchanges. Until recently, the area of
operation/ jurisdiction of exchange were specified at the time of its
recognition, which in effect precluded competition among the exchanges.
These are called regional exchanges. In order to provide an opportunity
to investors to invest/ trade in the securities of local companies, it is
mandatory foe the companies, wishing to list their securities, to list on
the regional stock exchange nearest to their registered office

THERE ARE TWO TYPES OF MARKETS IN INDIA

A) MONEY MARKET

Money market is a market for debt securities that pay off in the short
term usually less than one year, for example the market for 90-days
treasury bills. This market encompasses the trading and issuance of short
term non equity debt instruments including treasury bills, commercial
papers, bankers acceptance, certificates of deposits, etc other word we
can also say that the Money Market is basically concerned with the issue
and trading of securities with short term maturities or quasi-money
instruments. The Instruments traded in the money-market are Treasury
Bills, Certificates of Deposits (CDs), Commercial Paper (CPs), Bills of
Exchange and other such instruments of short-term maturities (i.e. not
exceeding 1 year with regard to the original maturity)

B) CAPITAL MARKET

Capital market is a market for long-term debt and equity shares. In this
market, the capital funds comprising of both equity and debt are issued
and traded. This also includes private placement sources of debt and
equity as well as organized markets like stock exchanges.


Capital market can be divided into Primary and Secondary Markets.

A) PRIMARY MARKET
B) SECONDARY MARKET

A) PRIMARY MARKET

In the primary market, securities are offered to public for
subscription for the purpose of raising capital or fund. Secondary market
is an equity trading avenue in which already existing/pre- issued
securities are traded amongst investors. Secondary market could be
either auction or dealer market. While stock exchange is the part of an
auction market, Over-the-Counter (OTC) is a part of the dealer market. In
addition to the traditional sources of capital from family and friends,
startup firms are created and nurtured by Venture Capital Funds and
Private Equity Funds. According to the Indian Venture Capital Association
Yearbook (2003), investments of $881million were injected into 80
companies in 2002, and investments of

$470 million were injected into 56 companies in 2003. The firms which
received these investments wiredrawn from a wide range of industries,
including finance, consumer goods and health. The growth of the venture
capital and private equity mechanisms in India is critically linked to their
track record for successful exits. Investments by these funds only
commenced in recent years, and we are seeing a rapid buildup in a full
range of channels for exit, with a mix of profitable and unprofitable
outcomes. This success with Exit suggests that investors will allocate
increased resources to venture funds and private equity funds operating
in India, who will (in turn) be able to fund the creation of new firms.

B) SECONDARY MARKET
Secondary Market refers to a market where securities are traded after
being initially offered to the public in the primary market and/or listed on
the Stock Exchange. Majority of the trading is done in the secondary
market. Secondary market comprises of equity markets and the debt
markets. For the general investor, the secondary market provides an
efficient platform for trading of his securities. For the management of the
company, Secondary equity markets serve as a monitoring and control
conduitby facilitating value-enhancing control activities, enabling
implementation of incentive-based management contracts, and
aggregating information (via price discovery) that guides management
decisions.








OBJECTIVE OF STUDY


To learn about Indian Stock Market

To learn about Its various aspects

To learn about benefits of investing in Indian Stock Market

To learn how to invest in Indian Stock Market

To measure market movements


Proper understanding and analysis of share market firm






































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R RE ES SE EA AR RC CH H M ME ET TH HO OD DO OL LO OG GY Y
Research is the application of scientific method to add to the
personal pool of knowledge. Financial research is a systematic design
collection & analysis of data & finding relevance to specific financial
aspect of the company.
Data are fact figures & other relevant materials for the study and
analysis
DATA IS PRIMARILY OF TWO KINDS:-
a) Primary data
b) Secondary Data
a) Primary data:
Primary collection Methods can also be classified as.
a) Observation,
b) Experimentation
c) Simulation
d) Projective technique.
Secondary Data
Secondary data may be defined as data that has been collected earlier for
some purpose other than the purpose of the present study. Any data that
is available prior to the commencement of the research project is
secondary data & therefore secondary data is also called as historical
data. Secondary data collection saves valuable time efforts & Money.

MEANING OF RESEARCH:-
Research as a scientific and systematic search for pertinent
information on a specific topic. In fact, research is an art of scientific
investigation. It is an academic activity as such the term should be used in
a technical sense. Research is, thus an original contribution to the existing
stock of knowledge making for its advancement .it is a per-suite of truth
with the help of study, observation, comparison and experiment. In short,
the search for knowledge through objective & systematic method of
finding solution to a problem is Research.

DEFINATION:-
1) According to Advanced Learners Dictionary, A research is a careful
investigation or inquiry especially through search for new facts in any
branch of knowledge.
2) According to Clifford Woody, Research comprises defining and
redefining problems, formulating hypothesis or suggested solutions;
collecting and evaluating data; making deduction and reaching
conclusions; and at last carefully testing the conclusions to determine
whether they fit the formulating hypothesis.

TYPES OF RESEARCH:-
1) Descriptive vs. Analytical
2) Applied vs. Fundamental
3) Quantitative vs. qualitative
4) Conceptual vs. Empirical
5) Some other types of research.

1) Descriptive vs. Analytical:-
Descriptive research includes surveys and fact-finding enquiries of
different kinds. The main feature of this method is that the research has
no control over the variables; he can only report what has happened or
what happening.
For Eg: - Survey method of all kinds, including comparative and co
relational methods.

2) Applied vs. Fundamental:-
Research can either be applied (or action) research or fundamental (to
basis or pure) research. Applied research aims at finding a solution for an
immediate problem facing a society or an industrial/business
organization.
For Eg: - Research studies, concerning human behavior carried on with a
view to make generalizations about human behavior.

3) Quantitative vs. Qualitative:-
Quantitative research is based on the measurement of quantity or
amount. It is applicable to phenomena that can be expressed in terms of
quantity. Qualitative research, on the other hand, is concerned with
qualitative phenomenon.

4) Conceptual vs. Empirical:-
Conceptual research is that related to some abstract idea(s) or theory. It
is generally used by philosophers and thinkers to develop new concepts.
On the other hand, empirical research relies on experience or observation
alone. It is data-based research.

5) Some other types of research:-
i. One time research or long term research
ii. Field setting research or laboratory research
iii. Clinical or diagnostic research
iv. Historical research
v. Conclusion oriented research

RESEARCH PROCESS:-
Following are the steps which are guideline regarding the research
process:-
a) Formulating the research problem:-
There are two types of research problem:-
For e.g.: - Those which relate to state of nature and those which relate to
relationships between variables.
The formulation of a general topic into a specific research problem, thus
constitutes the first step in a scientific enquiry, essentially two steps are
involved in formulating the research problem-
1) Understanding the research problem thoroughly.
2) Rephrasing the same into meaningful terms from an
analytical point of view.

b) Extensive literature survey:-
Once the problem is formulated, a brief summary of it should be written
down. It is compulsory for a research worker writing a thesis for a Ph.D.
degree to write a synopsis of the topic & submit it to the Research Board
for approval. For this purpose, the abstracting and indexing journals,
conference proceedings, government reports, books etc. must be tapped
depending on the nature of the problem. A good library will be a great
help to the researcher at this stage.

c) Development of working hypotheses:-
Working hypothesis is tentative assumption made in order to draw out
and test its logical or empirical consequences. As such manner in which
research hypotheses are developed is particularly important since they
provide the focal point for research. Hypothesis should be very specific
and limited to the piece of research in hand because it has to be tested. It
sharpens his thinking and focuses attention on the more important facets
of the problem. It also indicates the type of data required and the type of
methods of data analysis to be used.

d) Preparing the research design:-
The research problem having been formulated in clear cut terms, the
researcher will be required to prepare a research design, i.e. he will have
to state the conceptual structure within which research would be
conducted. The preparation of such a design facilitates research to be as
efficient as possible yielding maximal information. In other words, the
function of research design is to provide for the collection of relevant
evidence with minimal expenditure of efforts, time and money.

e) Determining sample design:-
The researcher must decide the way of selecting a sample or what is
popularly known as the sample design. In other words, a sample is a
definite plan determined before any data are actually collected for
obtaining a sample from a given population. Probability samples are
those based on simple random sampling, systematic sampling, stratified
sampling, cluster/areas sampling whereas non-probability samples are
those based on convenience sampling, judgment sampling and quota
sampling techniques.

g) Execution of the project:-
Execution of the project is very important steps in the research process. If
the execution of the project proceeds on correct lines, the data to be
collected would be adequate and depenable7. The researcher should see
that the project is executed in a systematic manner and time. If the
survey is to be conducted by a means of structured questionnaires, data
can be readily machine-processed. If some of the respondents do not
cooperate, some suitable methods should be designed to tackle this
problem.

h) Analysis of data:-
After the data have been collected, the researcher turns to the task of
analyzing them. The analysis of data requires a number of closely related
operations such as establishment of categories, the application of these
categories to raw data through coding, tabulation and them drawing
statistical inferences. Thus, researcher should classify the raw data into
some purposeful and usable categories. Editing is the procedure that
improves the quality of the data for coding. With coding the stage is
ready for tabulation. Tabulation is a part of technical procedure where in
the classified data are put in the form of tables.



i) Hypothesis testing:-
After analyzing the data as stated above, the researcher is in a position to
test hypotheses. Various tests, such as Chi square test, t-test, have been
developed by the statisticians for the purpose. The hypothesis may be
tested through the use of one or more of such test, depending upon the
nature and object of the research inquiry. Hypothesis-testing will result in
either accepting the hypothesis or in rejecting it.

j) Generalization and interpretation:-
If a hypothesis is tested and upheld several time, it may be possible for
the researcher to arrive at a generalization, i.e. to build a theory. If the
researcher had no hypothesis to start with, he might seek to explain his
findings on the basis of some theory. It is known as interpretation.

K) Preparation of the
1) Descriptive vs. Analytical:-
2) Applied vs. Fundamental:-
3) Quantitative vs. Qualitative:-
4) Conceptual vs. Empirical:-
5) Some other types of research:-

RESEARCH PROCESS:-
a) Formulating the research problem:-
b) Extensive literature survey:-

c) Development of working hypotheses:-
d) Preparing the research design:-
e) Determining sample design:-
g) Execution of the project:-
h) Analysis of data:-
i) Hypothesis testing:-
j) Generalization and interpretation:-
K) Preparation of the report or the thesis:-

1. The Preliminary Pages:-
Finally, the researcher has to prepare the report of what has been done
by him. Writing of report must be done with great care keeping in view
the following-
1. The Preliminary Pages.
2. The Main Text.
3. The End Matter.

1. The Preliminary Pages:-
In this case the report should carry title and depth followed by
acknowledgement and foreword. Then there should be a table of content
followed by a list of tables and list of graphs and charts, if any, give in the
report.

2. The main Text:-
The main text of the report should have the following parts-
a) Introduction It should contain a clear statement of the objective of
the research and an explanation of the methodology adopted in
accomplishing the research.
b) Summary of findings After introduction there would appear a
statement of findings and recommendation in non-technical language.
c) Main ReportThe main body of the report should be presented in
logical sequence.
d) Conclusion Towards the end of the main text, researcher should
again put down the results of his research clearly and precisely. In fact, it
is final summing up.

















































































































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T To op pi ic cs s c co ov ve er re ed d

Bombay stock exchange
National stock exchange
Nse family
Listings of securities
Membership administration
Dematerialization
Investment
Broker and sub-broker
Auction





























BOMBAY STOCK EXCHANGE OF INDIA LIMITED

Bombay Stock Exchange Limited is the oldest stock exchange in
Asia with a rich heritage. Popularly known as "BSE", it was established as
"The Native Share & Stock Brokers Association" in 1875. It is the first
stock exchange in the country to obtain permanent recognition in 1956
from the Government of India under the Securities Contracts (Regulation)
Act, 1956.
The Exchange's pivotal and pre-eminent role in the development of the
Indian capital market is widely recognized and its index, SENSEX, is
tracked worldwide. Earlier an Association of Persons (AOP), the Exchange
is now a demutualised and corporative entity incorporated under the
provisions of the Companies Act, 1956, pursuant to the BSE
(Corporatization and Demutualization) Scheme, 2005 notified by the
Securities and Exchange Board of India (SEBI). With demutualization, the
trading rights and ownership rights have been de-linked effectively
addressing concerns regarding perceived and real conflicts of interest.
The Exchange is professionally managed under the overall direction of the
Board of Directors. The Board comprises eminent professionals,
representatives of Trading Members and the Managing Director of the
Exchange. The Board is inclusive and is designed to benefit from the
participation of market intermediaries. In terms of organization structure,
the Board formulates larger policy issues and exercises over-all control.
The committees constituted by the Board are broad-based. The day-to-
day operations of the Exchange are managed by the Managing Director
and a management team of professionals. The Exchange has a nation-

wide reach with a presence in 417 cities and towns of India. The systems
and processes of the Exchange are designed to safeguard market integrity
and enhance transparency in operations. During the year 2004-2005, the
trading volumes on the Exchange showed robust growth. The Exchange
provides an efficient and transparent market for trading in equity, debt
instruments and derivatives. The BSE's On Line Trading System (BOLT) is
a proprietary system of the Exchange and is BS 7799-2-2002 certified. The
surveillance and clearing & settlement functions of the Exchange are ISO
9001:2000 certified.
Bombay Stock Exchange Limited (BSE) which was founded in 1875
with six brokers has now grown into a giant institution with over 874
registered Broker-Members spread over 380 cities across the country.
Today, BSE's Wide Area Network (WAN) connecting over 8000 BSE Online
Trading (BOLT) System Trader Work Stations (TWS) is one of the largest of
its kind in the country. With a view to provide efficient and integrated
services to the investing public through the members and their associates
in the operations pertaining to the Exchange, Bombay Stock Exchange
Limited (BSE) has set up a unique Member Services and Development to
attend to the problems of the Broker-Members. Member Services and
Development Department is the single point interface for interacting with
the Exchange Administration to address to Members' issues. The
Department takes care of various problems and constraints faced by the
Members in various products such as Cash, Derivatives, Internet Trading,
and Processes such as Trading, Technology, Clearing and Settlement,
Surveillance and Inspection, Membership, Training, Corporate
Information, etc

VISION OF BSE

Emerge as the premier Indian stock exchange by
Establishing global benchmarks"



OBJECTIVES OF BSE
The BSE SENSEX is the benchmark index with wide
acceptance among individual investors, institutional investors, foreign
investors, foreign investors and fund managers. The objectives of the
index are:
To measure market movements
Given its long history and its wide acceptance, no other index matches
the BSE SENESX in the reflecting market movements and sentiments.
SENSEX is widely used to describe the mood in the Indian stock markets.
Benchmark for funds performance
The inclusion of blue chip companies and the wide and balanced
industry Representation in the SENSEX makes it the ideal benchmark
for fund managers to compare the performance of their funds.
For index based derivatives products
Institutional investors, money managers and small investors, all refer
to the BSE SENSEX for their specific purposes. The BSE SENSEX is in effect
the proxy for the Indian stock markets. Since SENSEX comprises of the
leading companies in all the significant sectors in the economy, we
believe that it will be the most liquid contract in the Indian market and
will garner a predominant market share.




COMMODITY EXCHANGES

The three exchanges are:

National Commodity & Derivatives Exchange Limited (NCDEX)

1. Multi Commodity Exchange of India Limited (MCX)

3. National Multi-Commodity Exchange of India Limited
(NMCEIL)

All the exchanges have been set up under overall control of Forward
Market Commission (FMC) of Government of India.

National Commodity & Derivatives Exchange Limited (NCDEX)
National Commodity & Derivatives Exchange Limited (NCDEX) located in
Mumbai is a public limited company incorporated on April 23, 2003 under
the Companies Act, 1956 and had commenced its operations on
December 15, 2003.This is the only commodity exchange in the country
promoted by national level institutions. It is promoted by ICICI Bank
Limited, Life Insurance Corporation of India (LIC), National Bank for
Agriculture and Rural Development (NABARD) and National Stock
Exchange of India Limited (NSE).
It is a professionally managed online multi commodity exchange. NCDEX
is regulated by Forward Market Commission and is subjected to various
laws of the land like the Companies Act, Stamp Act, Contracts Act,
Forward Commission (Regulation) Act and various other legislations.

Multi Commodity Exchange of India Limited (MCX)
Headquartered in Mumbai Multi Commodity Exchange of India Limited
(MCX), is an independent and de-metalized exchange with a permanent
recognition from Government of India. Key shareholders of MCX are
Financial Technologies (India) Ltd., State Bank of India, Union Bank of
India, Corporation Bank, Bank of India and Canada Bank. MCX facilitates
online trading, clearing and settlement operations for commodity futures
markets across the country. MCX started offering trade in November
2003 and has built strategic alliances with Bombay Bullion Association,
Bombay Metal Exchange, Solvent Extractors Association of India, Pulses
Importers Association and Shetkari Sanghatana.

National Multi-Commodity Exchange of India Limited (NMCEIL)
National Multi Commodity Exchange of India Limited (NMCEIL) is the first
demutualized, Electronic Multi-Commodity Exchange in India. On 25th
July, 2001, it was granted approval by the Government to organize
trading in the edible oil complex. It has operationalised from November
26, 2002. It is being supported by Central Warehousing Corporation Ltd.,
Gujarat State Agricultural Marketing Board and Neptune Overseas
Limited. It got its recognition in October 2000. Commodity exchange in
India plays a Important role where the prices of any commodity are not
fixed, in an organized way. Earlier only the buyer of produce and its seller
in the market judged upon the prices. Others never had a say. Today,
commodity exchanges are purely speculative in nature. Before
discovering the Price, they reach to the producers, end-users, and even
the retail investors, at a grassroots level. It brings a price transparency
and risk management in the vital market. A big difference between a
typical auction, where a single auctioneer announces the bids and the
Exchange is that people are not only competing to buy but also to sell. By
Exchange rules and by law, no one can bid under a higher bid, and no one
can offer to sell higher than someone elses lower offer. That keeps the
market a efficient as possible, and keeps the traders on their toes to
make sure no one gets the purchase or sale before they do.











NSE NATIONAL STOCK EXCHANGE OF INDIA


Capital market reforms in India have outstripped the process of
liberalization in most other sectors of the economy. However, the
creation of an independent capital market regulator was the initiation of
this reform process. After the formation of the Securities Market
regulator, the Securities and Exchange Board of India (SEBI), attention
were drawn towards the inefficiencies of the bourses and the need was
felt for better regulation, discipline and accountability. A Committee
recommended the creation of a 2nd stock exchange in Mumbai called the
"National Stock Exchange". The Committee suggested the formation of an
exchange which would provide investors across the country a single,
screen based trading platform, operated through a VSAT network. It was
on this recommendation that setting up of NSE as a technology driven
exchange was conceptualized. NSE has set up its trading system as a
nation-wide, fully automated screen based trading system. It has written
for itself the mandate to create a world-class exchange and use it as an
instrument of change for the industry as a whole through competitive
pressure. NSE was incorporated in 1992 and was given recognition as a
stock exchange in April 1993. It started operations in June 1994, with
trading on the Wholesale Debt Market Segment. Subsequently it
launched the Capital Market Segment in November 1994 as a trading
platform for equities and the Futures and Options Segment in June 2000
for various derivative instruments.

OBJECTIVES OF NSE

Establishing a nationwide trading facility for all types of securities;

Ensuring equal access to investors all over the country through an
appropriate communication network;

Providing a fair, efficient and transparent securities market using
electronic trading system;

Enabling shorter settlement cycles and book entry settlements; and

Meeting international benchmarks and standards. NSE has been able to
take the stock market to the doorsteps of the investors.
The technology has been harnessed to deliver the services to the
investors across the country at the cheapest possible cost. It provides a
nation-wide, screen-based, automated trading system, with a high degree
of transparency and equal access to investors irrespective of geographical
location. The high level of information dissemination through on-line
system has helped in integrating retail investors on a nation-wide basis.
The standards set by the exchange in terms of market practices, products,
technology and service standards have become industry benchmarks and
are being replicated by other market participants. Within a very short
span of time, NSE has been able to achieve all the objectives for which it
was set up. It has been playing a leading role as a change agent in
transforming the Indian Capital Markets to its present form.


The Exchange provides trading in 3 different segments viz.

Wholesale debt market (WDM)

Capital market (CM) segment and

The futures & options (F&O) segment.


1) WHOLESALE DEBT MARKET

The Wholesale Debt Market segment provides the trading platform
for trading of a wide range of debt securities which includes State and
Central Government securities, T-Bills, PSU Bonds, Corporate Debentures,
CPs, and CDs etc. However, along with these financial instruments, NSE
has also launched various products (e.g. FIMMDA-NSE MIBID/MIBOR)
owing to the market need. A reference rate is said to be an accurate
measure of the market price. In the fixed income market, it is the interest
rate that the market respects and closely matches. In response to this,
NSE started computing and disseminating the NSE Mumbai Inter-bank Bid
Rate (MIBID) and NSE Mumbai Inter- Bank Offer Rate (MIBOR). Owing to
the robust methodology of computation of these rates and its extensive
use, this product has become very popular among the market
participants. Keeping in mind the requirements of the banking industry,
FIs, MFs, insurance companies, who have substantial investments in
sovereign papers, NSE also started the dissemination of its yet another
product, the Zero Coupon Yield Curve. This helps in valuation of
sovereign securities across all maturities irrespective of its liquidity in the
market. The increased activity in the government securities market in
India and simultaneous emergence of MFs (Gilt MFs) had given rise to the
need for a well Defined bond index to measure the returns in the bond
market. NSE constructed such an index the, NSE Government Securities
Index. This index provides a benchmark for portfolio management by
various investment managers and gilt funds.


2) CAPITAL MARKET SEGMENT

The Capital Market segment offers a fully automated screen
based trading system, known as the National Exchange for Automated
Trading (NEAT) system. This operates on a price/time priority basis and
enables members from across the country to trade with enormous ease
and efficiency. Various types of securities e.g. equity shares, warrants,
debentures etc. are traded on this system. The average daily turnover in
the CM Segment of the Exchange during 2008-09 was nearly Rs. 4,506 crs.
NSE started trading in the equities segment (Capital Market segment) on
November 3, 1994 and within a short span of 1 year became the largest
exchange in India in terms of volumes transacted. The Equities section
provides you with an insight into the equities segment of NSE and also
provides real-time quotes and statistics of the equities market. In-depth
information regarding listing of securities, trading systems & processes,
clearing and settlement, risk management, trading statistics etc are
available here.


3) FUTURE & OPTION SEGMENT

Futures & Options segment of NSE provides trading in
derivatives instruments like Index Futures, Index Options, Stock Options,
Stock Futures and Futures on interstates. Though only four years into its
operations, the futures and options segment of NSE has made a mark for
itself globally. In the Futures and Options segment, trading in Nifty and
CNX IT index and 53 single stocks are available. futures and options would
be available on 118 single stocks.


















NSE FAMILY


NSCCL

National Securities Clearing Corporation Ltd. (NSCCL), a wholly-owned
subsidiary of NSE, was incorporated in August 1995 and commenced
clearing operations in April 1996. It was the first clearing corporation in
the country to provide notation/settlement guarantee that revolutionized
the entire concept of settlement system in India. It was set up to bring
and 9 sustain confidence in clearing and settlement of securities; to
promote and maintain short and consistent settlement cycles; to provide
counter-party Risk guarantee, and to operate a tight risk containment
system. It carries out the clearing and settlement of the trades executed
in the equities and derivatives segments of the NSE. It operates a well-
defined settlement cycle and there are no deviations or deferments from
this cycle. It aggregates trades over a trading period T, nets the positions
to determine the liabilities of members and ensures movement of funds
and securities to meet respective liabilities. It also operates a Subsidiary
General Ledger (SGL) for settling trades in government securities for its
constituents. It has been managing clearing and settlement functions
since its inception without a Single failure or clubbing of settlements. It
assumes the counter-party risk of each member and guarantees financial
settlement. It has tied up with 10 Clearing Banks viz., Canara Bank, HDFC
Bank, IndusInd Bank, ICICI Bank, UTI Bank, Bank of India, IDBI Bank and
Standard Chartered Bank for funds settlement while it has direct
connectivity with depositories for settlement of securities. It has also
initiated a working capital facility in association with the clearing banks
that helps clearing members to meet their working capital requirements.
Any clearing bank interested in utilizing this facility has to enter into an


agreement with NSCCL and with the clearing member. NSCCL has also
introduced the facility of direct payout to clients account on both the
depositories. It ascertains from each clearing member, the beneficiary
account details of their respective clients who are due to receive pay out
of securities. It has provided its members with a front-end for creating
the file through which the information is provided to NSCCL. Based on the
information received from members, it sends payout instructions to the
depositories, so that the client receives the pay out of securities directly
to their accounts on the pay-out day. NSCCL currently settles trades
under T+2 rolling settlement. It has the credit of continuously upgrading
the clearing and settlement procedures and has also brought Indian
financial markets in line with international markets. It has put in place
online real-time monitoring and surveillance system to keep track of the
trading and clearing members outstanding positions and each member is
allowed to trade/operate within the pre-set limits fixed according to the
funds available with the Exchange on behalf of the member. The online
surveillance mechanism also generates various alerts/reports on any
price/volume movements of securities not in line with the normal
trends/patterns.



IISL

India Index Services and Products Limited (IISL), a joint venture of
NSE and Credit Rating Information Services of India Limited (CRISIL), was
set up in May 1998 to provide indices and index services. It has a
consulting and licensing agreement with Standard and Poor's (S&P), the
world's leading provider of invest able equity indices, for co-branding
equity indices. IISL pools the index development efforts of NSE and CRISIL
into a coordinated whole. It is India's first specialized company which


focuses upon the index as a core product. It provides a broad range of
products and professional index services. It maintains over 70 equity
indices comprising broad based benchmark indices, sectoral indices and
customized indices. Many investment and risk management products
based on IISL indices have been developed in the recent past. These
include index based derivatives on NSE, a number of index funds and
India's first exchange traded fund.


NSDL
Prior to trading in a dematerialized environment,
settlement of trades required moving the securities physically from the
seller to the ultimate buyer, through the seller's broker and buyer's
broker, which involved lot of time and the risk of delay somewhere along
the chain. Further, the system of transfer of ownership was grossly
inefficient as every transfer involved physical movement of paper to the
issuer for registration, with the change of ownership being evidenced by
an endorsement on the security certificate. In many cases, the process of
transfer took much longer than stipulated in the then regulations. Theft,
forgery, mutilation of certificates and other irregularities were rampant.
All these added to the costs and delays in settlement and restricted
liquidity. To obviate these problems and to promote dematerialization of
securities, NSE joined hands with UTI and IDBI to set up the first
depository in India called the "National Securities Depository Limited"
(NSDL). The depository system gained quick acceptance and in a very
short span of time it was able to achieve the objective of eradicating
paper from the trading and settlement of securities, and was also able to
get rid of the risks associated with fake/forged/stolen/bad paper.
Dematerialized delivery today constitutes almost 100% of the total
delivery based settlement.





NSE.IT

NSE.IT Limited, a 100% technology subsidiary of NSE, was incorporated in
October 1999 to provide thrust to NSEs technology edge, concomitant
with its overall goal of harnessing latest technology for optimum business
use.
It provides the securities industry with technology that ensures
transparency and efficiency in the trading, clearing and risk management
systems. Additionally, NSE.IT provides consultancy services in the areas of
data warehousing, internet and business continuity plans. Amongst
various products launched by NSE.IT are NEAT XS, a Computer-To-
Computer Link (CTCL) order routing system, NEAT iXS, an internet trading
system and Promos, professional brokers back office system. NSE.IT also
offers an e learning oral, invarsitywww.finvarsity.com) dedicated to the
finance sector. The site is powered by Enlister - a learning management
system developed by NSE.IT jointly with an e-learning partner. New
initiatives include payment gateways, products for derivatives segments
and Enterprise Management Services (EMSs).

NCDEX

NSE joined hand with other financial institutions in India viz., ICICI Bank,
NABARD, LIC, PNB, CRISIL, Canara Bank and IFFCO to promote the NCDEX
which provide a platform for market participants to trade in wide
spectrum of commodity derivatives. Currently NCDEX facilitates trading of
37 agro based commodities, 1 base metal and 2 precious metal.





LISTING OF SECURITIES


The stocks, bonds and other securities issued by issuers require listing for
providing liquidity to investors. Listing means formal admission of a
security to the trading platform of the Exchange. It provides liquidity to
investors without compromising the need of the issuer for capital and
ensures effective monitoring of conduct of the issuer and trading of the
securities in the interest of investors. The issuer wishing to have trading
privileges for its securities satisfies listing requirements prescribed in the
relevant statutes and in the listing regulations of the Exchange. It also
agrees to pay the listing fees and comply with listing requirements on a
continuous basis. All the issuers who list their securities have to satisfy
the corporate governance requirement framed by regulators.

Listing Criteria
The Exchange has laid down criteria for listing of new issues by
companies, companies listed on other exchanges, and companies formed
by amalgamation/restructuring, etc. in conformity with the Securities
Contracts (Regulation) Rules, 1957 and directions of the Central
Government and the Securities and Exchange Board of India (SEBI). The
criteria include minimum paid-up capital and market capitalization,
project appraisal, company/promoter's track record, etc. The issuers of
securities are required to adhere to provisions of the Securities Contracts
(Regulation) Act, 1956, the Companies Act, 1956, the Securities and
Exchange Board of India Act, 1992, and the rules, circulars, notifications,
guidelines, etc. prescribed there under.

Listing Agreement
All companies seeking listing of their securities on the Exchange are
required to enter into a listing agreement with the Exchange. The
agreement specifies all the requirements to be continuously complied
with by the issuer for continued listing. The Exchange monitors such
compliance. Failure to comply with the requirements invites suspension
of trading, or withdrawal/delisting, in addition to penalty under the
Securities Contracts (Regulation) Act, 1956. The agreement is being
increasingly used as a means to improve corporate governance
Benefits of Listing on NSE

NSE provides a trading platform that extends across the length and
breadth of the country. Investors from approximately 345 centers can
avail of trading facilities on the NSE trading network. Listing on NSE thus,
enables issuers to reach and service investors across the country.

NSE being the largest stock exchange in terms of trading volumes, the
Securities trade at low impact cost and are highly liquidity. This in turn
reduces the cost of trading to the investor.

The trading system of NSE provides unparallel level of trade and post-
trade information. The best 5 buy and sell orders are displayed on the
trading system and the total number of securities available for buying and
selling is also displayed. This helps the investor to know the depth of the
market. Further, corporate announcements, results, corporate actions etc
are also available on the trading system, thus reducing scope for price
manipulation or misuse.

The facility of making initial public offers (IPOs), using NSE's network
and software, results in significant reduction in cost and time of issues.

NSE's web-site www.nseindia.com provides a link to the web-sites of
the companies that are listed on NSE, so that visitors interested in any
company can visit that company's web-site from the NSE site.

Listed companies are provided with monthly trade statistics for the
securities of the company listed on the Exchange.

The listing fee is nominal.





MEMBERSHIP ADMINISTRATION


The trading in NSE has a three tier structure-the trading platform
provided by the Exchange, the broking and intermediary services and the
investing community. The trading members have been provided exclusive
rights to trade subject to their continuously fulfilling the obligation under
the Rules, Regulations, Byelaws, Circulars, etc. of the Exchange. The
trading members are subject to its regulatory discipline. Any entity can
become a trading member by complying with the prescribed eligibility
criteria and exit by surrendering trading membership. There are no
entry/exit barriers to trading membership.

Eligibility Criteria

The Exchange stresses on factors such as corporate structure, capital
adequacy, track record, education, experience, etc. while granting trading
rights to its members. This reflects a conscious effort by the Exchange to
ensure quality broking services which enables to build and sustain
confidence in the Exchange's operations. The standards stipulated by the
Exchange for trading membership are substantially in excess of the
minimum statutory requirements as also in comparison to those
stipulated by other exchanges in India. The exposure and volume of
transactions that can be undertaken by a trading member are linked to
liquid assets in the form of cash, bank guarantees, etc. deposited by the
member with the Exchange as part of the membership requirements. The
trading members are admitted to the different segments of the Exchange
subject to the provisions of the Securities Contracts (Regulation) Act,
1956, the Securities and Exchange Board of India Act, 1992, the rules,
circulars, notifications, guidelines, etc., issued there under and the
byelaws, Rules and Regulations of the Exchange. All trading members are
registered with SEBI.



DEMATERIALISATION (DEMAT)

MEANING
Dematerialization is the process by which physical certificates of an
investor are converted to an equivalent number of securities in electronic
form and credited into the investor's account with his/her DP.


Dematerializing securities (physical holding into electronic
holding)
In order to dematerialize physical securities one has to fill in a DRF
(Demat Request Form) which is available with the DP and submit the
same along with physical certificates one wishes to dematerialize.
Separate DRF has to be filled for each ISIN Number. The complete process
of dematerialization is outlined below: Surrender certificates for
dematerialization to your depository participant. Depository participant
intimates Depository of the request through the system. Depository
participant submits the certificates to the registrar of the Issuer
Company. Registrar confirms the dematerialization request from
depository. After dematerializing the certificates, Registrar updates
accounts and informs depository of the completion of dematerialization.
Depository updates its accounts and informs the depository participant.
Depository participant updates the demat account of the investor.

Procedure for buying & selling dematerialized securities

The procedure for buying and selling dematerialized securities is similar
to the procedure for buying and selling physical securities. The difference
lies in the process of delivery (in case of sale) and receipt (in case of
purchase) of securities.

In case of purchase:-
1. The broker will receive the securities in his account on the payout day
2. The broker will give instruction to its DP to debit his account and credit
Investors account
3. Investor will give Receipt Instruction to DP for receiving credit by filling
Appropriate form. However one can give standing instruction for credit
Into ones account that will obviate the need of giving Receipt Instruction
every time.

In case of sale:-
The investor will give delivery instruction to DP to debit his account and
credit the brokers account. Such instruction should reach the DPs office
at least 24 hours before the pay-in as otherwise DP will accept the
instruction only at the investors risk.




















INVESTMENT

Investment means the use of money for the purpose of making more
money, to gain income or increase capital, or both.
1) Short Term Investment
2) Long Term Investment

Short Term Investment:It is more risky A successful short term
trading mindset instead requires iron discipline, intense focus and
steely devotion. Short term trading can be divided in 3 sections
Day Trading
Swing Trading
Position Trading

Day Trading
Day traders buy and sell stocks throughout the day in the hope that
the price of the stocks will fluctuate in value during the day, allowing
them to earn quick profits. A day trader will hold a stock anywhere
from a few seconds to few hours, but will always sell all of those
stocks close of the day. The day trader will therefore not own any
position at the close of the each day, and there is overnight risk. The
objective of day trading is to quickly get in and out of any particular
stock for profits anywhere from few cents to several points per share
on an intra-day basis. Day trading can be further sub-divided into
number of styles, including.
Scalpers: This style of day trading involves the rapid and repeated
buying and selling of a large volume of stocks within seconds or
minutes. The objective is to earn a small per share profit on each
transaction while minimizing the risk.
Momentum Traders: This style of day trading involves identifying and
trading stocks that are in a moving pattern during the day, in an attempt
to buy stocks at bottoms and sell at tops.

Swing Trading
The principal difference between day trading and swing trading is that
swing traders will normally have a slightly longer time horizon than day
traders for holding a position in a stock. As is the case with day traders,
swing traders also attempt to predict the short term fluctuation in a
stocks price. However swing traders are willing to hold the stocks for
more than one day, if necessary, to give to stock price some time to move
or to capture additional momentum in the stocks price. Swing traders
will generally hold on to their stock positions anywhere from a few hours
to several days.
Swing trading has the capability of providing higher returns than day
trading. However, unlike day traders who liquidate their positions at the
end of each day, swing traders assume overnight risk. There are some
significant risks in carrying positions overnight. For example news events
and earnings warnings announced after the closing bell can result in
large, unexpected and possibly adverse changes to a stock's price

Position Trading
Position trading is similar to swing trading, but with a longer time horizon.
Position traders hold stocks for a time period anywhere from one day to
several weeks or months. These traders seek to identify stocks where the
technical trends suggest a possible large movement in price is likely to
occur, but which may not be fully played out for several weeks or months.

Long Term Investment:
A successful long term trading mindset requires, above all, patience and
perseverance. These are more difficult attributes to develop in the
average trader. Too often the average short-term trader succumbs to the
markets lure and develops a frantic, get-it-now mindset believing every
price blip represents a trading opportunity. As this attitude is fanned by
the media and brokerage industry, more and more long term traders
have become aggressive swing traders and swing traders become rabid
day traders - more often than not with disastrous consequences.
Long term trading results in less trades with fewer mistakes and lower
commission and slippage costs because overtrading is one of the biggest
sources of losses facing both new and established traders. Why is this so?
Obviously, more trades mean more commissions and more slippage. Few
short-term traders realize, however, that their total commission and
slippage costs in any year often exceed their total losses for the year. In
other words, many losing short-term traders would have actually made
money on an annual basis had they not incurred the exorbitant
commission and slippage costs of trading throughout the year. Fewer
trades mean fewer mistakes.
Long term trading unlike short term requires dramatically reduced time
for analysis and trading. If you are trading using weekly data, only one to
two hours each weekend are required to implement a sophisticated long
term trading system for 21 or more commodities. This includes the time
to completely download your quotes and update your data files, verify
which are the correct months to trade for each commodity, figure out if
you have any positions to rollover, generate your trading signals, and
write down orders to your broker. On the contrary a typical successful
day trader literally becomes a slave to their quote machines during
market hours.

BROKER & SUB-BROKER BROKER


A broker is a member of a recognized stock exchange, who is permitted
to do trades on the screen-based trading system of different stock
exchanges. He is enrolled as a member with the concerned exchange and
is registered with SEBI.

Sub broker
A sub broker is a person who is registered with SEBI as such and is
affiliated to a member of a recognized stock exchange.


Client Agreement Form
This form is an agreement entered between client and broker in the
presence of witness where the client agrees (is desirous) to trade/invest
in the securities listed on the concerned Exchange through the broker
after being satisfied of brokers capabilities to deal in securities. The
member, on the other hand agrees to be satisfied by the genuineness and
financial soundness of the client and making client aware of his (brokers)
liability for the business to be conducted.

Details of Client Registration form
The brokers have to maintain a database of their clients, for which you
have to fill client registration form. In case of individual client registration,
you have to broadly provide following information:
Your name, date of birth, photograph, address, educational
qualifications, occupation, residential status(Resident Indian/ NRI/others)
Unique Identification Number (wherever applicable)
Bank and depository account details
Income tax No. (PAN/GIR) which also serves as unique client code.
If you are registered with any other broker, then the name of broker
and concerned Stock exchange and Client Code Number.
Proof of identity submitted either as MAPIN UID Card/Pan
No./Passport/Voter ID/Driving license/Photo Identity card issued by
Employer registered under MAPIN

For proof of address (any one of the following):

1. Passport
2. Voter ID
3. Driving license
4. Bank Passbook
5. Rent Agreement
6. Ration Card
7. Flat Maintenance Bill
8. Telephone Bill
9. Electricity Bill
10. Certificate issued by employer registered under MAPIN
11. Insurance Policy
Each client has to use one registration form. In case of joint names
/family members, a separate form has to be submitted for each person.


Unique Client Code

In order to facilitate maintaining database of their clients, it is mandatory
for all brokers to use unique client code which will act as an exclusive
identification for the client. For this purpose, PAN number/passport
number/driving License/voters ID number/ ration card number coupled
with the frequently used bank account number and the depository
beneficiary account can be used for identification, in the given order,
based on availability.

Maximum brokerage that a broker/sub broker can charge
The maximum brokerage that can be charged by a broker has been
specified in the Stock Exchange Regulations and hence, it may differ from
across various exchanges. As per the BSE & NSE Bye Laws, a broker
cannot charge more than 2.5% brokerage from his clients. This maximum
brokerage is inclusive of the brokerage charged by the sub-broker.
Further, SEBI (Stock brokers and Sub brokers) Regulations, 1992 stipulates
that sub broker cannot charge from his clients, a commission which is
more than 1.5% of the value mentioned in the respective purchase or sale
note.

Charges that can be levied on the investor by a stock
broker/sub broker
The trading member can charge:
1. Brokerage charged by member broker.
2. Penalties arising on specific default on behalf of client (investor)
3. Service tax as stipulated.
4. Securities Transaction Tax (STT) as applicable.
The brokerage, service tax and STT are indicated separately in the
contract note.

STT (Securities Transaction Tax)

Securities Transaction Tax (STT) is a tax being levied on all transactions
done on the stock exchanges at rates prescribed by the Central
Government from time to time. Pursuant to the enactment of the Finance
(No.2) Act, 2004, the Government of India notified the Securities
Transaction Tax Rules, 2004 and STT came into effect from October 1,
2004.

Rolling Settlement

In a Rolling Settlement trades executed during the day are settled based
on the net obligations for the day. Presently the trades pertaining to the
rolling settlement are settled on a T+2 day basis where T stands for the
trade day. Hence, trades executed on a Monday are typically settled on
the following Wednesday (considering 2 working days from the trade
day). The funds and securities pay-in and pay-out are carried out on T+2
day.



AUCTION


WHAT IS AN AUCTION?
The Exchange purchases the requisite quantity in the Auction Market and
gives them to the buying trading member. The shortages are met through
auction process and the difference in price indicated in contract note and
price received through auction is paid by member to the Exchange, which
is then liable to be recovered from the client.

What happens if the shares are not bought in the auction?
If the shares could not be bought in the auction i.e. if shares are not
offered for sale in the auction, the transactions are closed out as per SEBI
guidelines. The guidelines stipulate that the close out Price will be the
highest price recorded in that scrip on the exchange in the settlement in
which the concerned contract was entered into and up to the date of
auction/close out OR 20% above the official closing price on the exchange
on the day on which auction offers are called for (and in the event of
there being no such closing price on that day, then the official closing
price on the immediately preceding trading day on which there was an
official closing price), whichever is higher. Since in the rolling settlement
the auction and the close out takes place during trading hours, the
reference price in the rolling settlement for close out procedures would
be taken as the previous days closing price.



























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FUNDAMENTAL ANALYSIS

The investor while buying stock has the primary purpose of gain. If he
invests for a short period of time it is speculative but when he holds it for
a fairly long period of time the anticipation is that he would receive some
return on his investment. Fundamental analysis is a method of finding out
the future price of a stock, which an investor wishes to buy. The method
for forecasting the future behavior of investments and the rate of return
on them is clearly through an analyze of the broad economic forces in
which they operate. The kind of industry to which they belong and the
analysis of the company's internal working through statements like
income statement, balance sheet and statement of changes of income.


ECONOMIC ANALYSIS

Investors are concerned with those forces in the economy, which affect
the performance of organizations in which they wish to participate,
through purchase of stock. A study of the economic forces would give an
idea about future corporate earnings and the payment of dividends and
interest to investors. Some of the broad forces within which the factors of
investment operate are:

1. POPULATION: -
Population gives an idea of the kind of labor force in a country. In some
countries the population growth has slowed down whereas in India and
some other third world countries there has been a population explosion.
Population explosion will give demand for more industries like hotels,
residences, service industries like health, consumer demand like
refrigerators and cars. Likewise, investors should prefer to invest in
industries, which have a large amount of labor force because in the future
such industries will bring better rates of return.

2. RESEARCH AND TECHNOLOGICAL DEVELOPMENTS: -
The economic forces relating to investments would be depending on the
amount of resources spent by the government on the particular
technological development affecting the future. Broadly the investor
should invest in those industries which are getting a large amount of
share in the funds of the development of the country. For example, in
India in the present context automobile industries and spaces technology
are receiving a greater attention. These may be areas, which the investor
may consider for investments.

3. CAPITAL FORMATION: -
Another consideration of the investor should be the kind of investment
that a company makes in capital goods and the capital it invests in
modernization and replacement of assets. A particular industry or a
particular company which an investor would like to invest can also be
viewed at with the help of the economic indicators such as the place,
value and property position of the industry, group to which it 110ngs and
the year-to-year returns through corporate profits.

4. NATURAL RESOURCES AND RAW MATERIALS: -
The natural resources are to a large extent responsible for a country's
economic development and overall improvement in the condition of
corporate growth. In India, technological discoveries recycling of
materials, nuclear and solar energy and new synthetics should give the
investor an opportunity to invest in untapped or recently tapped
resources which would also produce higher investment opportunity.


COMPANY ANALYSIS

Company analysis is a study of the variables that influence the future of a
firm both qualitatively and quantitatively. It is a method of assessing the
competitive position of a firm earning and profitability, the efficiency with
which it operates its financial position and its ful1l with respect to the
earning of its shareholders. The fundamental nature of this analysis is
that each share of a company has an intrinsic value, which is dependent
on the company's financial performance, quality of management and
record of its earnings and dividend. They believe that the market price of
share in a period of time will move towards its intrinsic value. If the
market price of a share is lower than the intrinsic value, as evaluated by
the fundamental analysis, then the share is supposed to be undervalued
and it should be purchased but if the current market price shows that it is
more than intrinsic value then according to the theory the share should
be sold. This basic approach is analyzed through the financial statements
of an organization. The basic financial statements, which are required as
tools of the fundamental analyst, are the income statement, the balance
sheet, and the statement of changes in financial position. These
statements are useful for investors, creditors as well as internal
management of a firm and on the basis these statements the future
course of action may be taken by the investors of the firm. While
evaluating a company, its statement must be carefully judged to find out
that they are:

(a) Correct,

(b) Complete,


TECHNICAL ANALYSIS

Technical analysis is simply the study of prices as reflected on price
charts. Technical analysis assumes that current prices should represent all
known information about the markets. Prices not only reflect intrinsic
facts, they also represent human emotion and the pervasive mass
psychology and mood of the moment. Prices are, in the end, a function of
supply and demand. However, on a moment to moment basis, human
emotionsfear, greed, panic, hysteria, elation, etc. also dramatically
effect prices. Markets may move based upon peoples expectations, not
necessarily facts. A market "technician" attempts to disregard the
emotional component of trading by making his decisions based upon
chart formations, assuming that prices reflect both facts and emotion.
Analysts use their technical research to decide whether the current
market is a BULL MARKET or a BEAR MARKET.
TECHNICAL ANALYSIS OF INDIAN STOCK MARKET BSE SENSEX INDEX
The BSE SENSEX is not only scientifically designed but also based on
globally accepted construction and review methodology. First compiled in
1986, SENSEX is a basket of 30 constituent stocks representing a sample
of large, liquid and representative companies. The base year of SENSEX is
1978-79 and the base value is 100. The index is widely reported in both
domestic and international markets through print as well as electronic
media. Technical Analysis of Indian stock market BSE Sensex Index The
Index was initially calculated based on the "Full Market Capitalization"
methodology but was shifted to the free-float methodology with effect
from September 1, 2003. The "Free-float Market Capitalization"
methodology of index construction is regarded as an industry best
practice globally. All major index providers like MSCI, FTSE, STOXX, S&
and Dow Jones use the Free-float methodology.
Due to is wide acceptance amongst the Indian investors; SENSEX is
regarded to be the pulse of the Indian stock market. As the oldest index
in the country, it provides the time series data over a fairly long period of
time (From 1979 onwards). Small wonder, the SENSEX has over the years
become one of the most prominent brands in the country.
Technical Analysis of Indian stock market BSE Sensex Index1 Day
Technical Analysis Chart of Indian stock market BSE Sensex Index

5 Day Technical Analysis Chart of Indian stock market BSE
Sensex Index


1 Year Technical Analysis Chart of Indian stock market BSE
Sensex Index



























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C Co on nc cl lu us si io on n

Share market is a high risk-high reward, permanent source of long
term finance for corporate enterprises and short term earning for
shareholders. The investors, who desire to share the risk, return and
control associated with ownership of companies would invest in equity
capital. Today, the Indian Equity Market is one of the most
technologically developed in the world and is on par with other
developed markets abroad. The introduction of on-line trading system,
dematerialization, and introduction of rolling settlement have facilitated
quick trading and settlements which lead to larger volumes. The setting
up of the National Stock Exchange of India Limited has revolutionized the
face of the stock market.

NSE is the only stock exchange which covers majority equity
investments every day. Also equity capital market encourages capital
formation in the country. The specific factor, which influences equity
market, is the investors sentiment towards the stock market as a whole.
So investor first has to analyze and invest and not speculate in shares. The
introduction of online trading has given a much-needed impetus to the
Indian equity markets. In this technological world things are needed to
move at a faster pace, and with the introduction of methods of marketing
securities in the stock exchange has expanded its business at a
tremendous speed.

According to economic times, the research states the major reason
behind the irregularities of market (up and down in sale and purchase,
price of share) is mainly because of forcasting mid set of equity investors.
So, the stock exchanges must disregards the emotional component of
trading by making investors decisions based upon chart formations,
assuming that prices reflect both facts and emotion. And also by creating
the awareness of fundamental analysis (Fundamental analysis is a
method of finding out the future price of a stock, which an investor
wishes to buy) among the investors to avoid the irregularities while
trading. So to increase the volume of equity investment, the stock
exchanges should strive to increase transparency, strictly enforce
corporate governance norms, provide more value-added services to
investors, and take steps to increase investor confidence. These stock
exchanges will have to plan strategic tie-ups with their foreign
counterparts to get an international platform. face international
competition every Indian stock exchange has to stress on innovation and
sustained investment in technology to remain ahead.






















BI BLI OGRAPHY


Books Referred
1. Investment Management -Preeti Singh
2. Indian Financial Market -T R Venkatesh
3. Financial Market -P K Bandgar
4. Merchant Banking & Financial Services -Anil Agashe.

Magazines
1. Business Today
2. India Today
3. Business World

Websites
1. www.nseindia.com
2. www.indiainfoline.com.
3. www.equitymaster.com
4. www.bseindia.com
5. www.sebi.gov.in
6. www.financialexpress.com