The Stock Market is an invisible market that trades in stocks of various companies belonging to both the public and private sectors. The Indian Stock Market is often referred to as the Share Market since it deals primarily with shares of various companies.
A Stock Exchange is a place where the stocks are listed and traded. Such exchanges may be a corporation or mutual organization which specialize in the business of introducing the sellers with the buyers of stocks and securities.
The Indian Stock Market in Mumbai comprises of two stock exchanges :
- Bombay Stock Exchange (BSE)
- National Stock Exchange (NSE)
The Bombay Stock Exchange (BSE) was established in 1875.The BSE India Stock Exchange serves as the most important for companies to raise money. The chief function of the Stock Market of India is to help raise money as capital for the growth and expansion of various private and public sector enterprises. Besides, the Stock Market of India provides able assistance to the individual investors through daily updates on current position of the stocks of the respective companies that are enlisted in the Stock Index in which the movement of prices in a section of the market are captured in price indices. The popular acronym for Stock Index is SENSitive indEX or Sensex. Moreover, the liquidity provided by the exchange enables the investors to sell securities owned by them easily and quickly. Hence a person who is subjected to sudden dearth of funds, can immediately sell his shares for cash in India Stock
Market.
At present, there are around 3500 companies listed with it and has a significant trading volume. On October 2006, the market capitalization of BSE was around US $ 730 billion. The BSE Sensex, also known as “ BSE 30” is a widely used market index not only in India but across Asia. In terms of volume of transactions, it is ranked among the top five stock exchanges in the world since 2006. As far as market capitalization is concerned, in April 2007, BSE had 2630 companies whose stocks were being actively traded. The cumulative market capitalization on 17 th April, 2007 was INR 3,588,734 crore with Reliance Industries Limited topping the charts with INR 205,688 crore.
