India Stock Market

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Shares, stocks, money, savings, investments - all these already become dreaded nightmares for investors to some extent. Will the investors be able to dream again? How long does one have to undergo the confidence crisis in the India stock market? Who is the worst sufferer? A country? A stock exchange? Or just the layman shareholder? Or the entire globe? The global economy has been hit by several factors, which have each fed on and exacerbated each other creating a perfect storm of disaster.

Performance of Global stock market

World equity markets registered their worst month in history as investors lost a probable $5.79 trillion during October 2008. Measured in dollar change to investor held equity accounts, Standard & Poor's data shows that the October loss of the 52 global equity markets was 45% above that of September when markets lost a then record $4.0 trillion. Standard & Poor's estimates that investors have lost $16.22 trillion year-to-date through October 2008. The Bombay Stock Exchange too has been massively hit by the crisis with being predominantly dependant on FII flows.

Scope of India stock market

Times are really quite exciting; an ever increasing plethora of events followed the global financial crisis. With globalization and innovation in the financial markets at its peak - it is very essential to study the market risks and requirements. Over the years, the India stock market has undergone major changes to remain at par with the global peers. With global trade and finance getting more dynamic day by day, the India stock market is not far behind to experience these developments. This has helped the financial structure of India get more innovative.

Main players in India Stock market

The India stock market is steered on by the two exchanges viz, Bombay Stock Exchanges (BSE) and National Stock Exchange (NSE). The trade and business of the entire country is dependant on the performance of these two main stock exchanges. Any minor developments in the economy might push the indexes on these exchanges down or vice versa.

10 major Global Stock Exchanges (market capitalization as on August 2009)

Rank Economy Stock Exchange Market Capitalization
(USD Billions)
Trade Value
(USD Billions)
1 United States NYSE Euronext 15,970 19,813
2 United States NASDAQ OMX 4,931 13,439
3 Japan Tokyo Stock Exchange 3,827 3,787
4 United Kingdom London Stock Exchange 3,613 2,741
5 China Shanghai Stock Exchange 2,717 4,496
6 Hong Kong Hong Kong Stock Exchange 2,711 1,496
7 Canada Toronto Stock Exchange 2,170 1,368
8 India Bombay Stock Exchange 1,631 258
9 India National Stock Exchange of India 1,596 801
10 Brazil BM&F Bovespa 1,545 868
11 Australia Australian Securities Exchange 1,454 1,062
12 Germany Deutsche Börse 1,429 1,628
13 China Shenzhen Stock Exchange 1,311 3,572
14 Switzerland SIX Swiss Exchange 1,229 788
15 Spain BME Spanish Exchanges 1,171 1,360
16 South Korea Korea Exchange 1,091 1,607
17 Russia MICEX 949 408
18 South Africa JSE Limited 925 340

Key strengths of India stock market

The India stock market boasts of a fully automated trading system on all stock exchanges, provides a wide range of products. It is an integrated platform to trade in both cash and derivatives and has a host of around 4,000 corporate brokers all across India. The stock market of India has made considerable progress following its international peers and the modern market mechanisms have helped them create a niche for themselves.

The market regular, Securities and Exchange Board of India (SEBI) plays an important role in the management of the stock exchanges in India. The regulatory methods are sound - in terms of intermediaries, trading mechanism, settlement cycles, risk management, derivative trading. The usage of Information technology is to a large extent responsible for the outstanding performance of the stock markets in India.

The two main players of the India stock market - NSE and BSE have outshone all the other exchanges and majority of the stocks are listed on these two exchanges. The market participants are ever increasing, the volume of securities has been growing, transaction costs are getting reduced, and there is significant improvement in efficiency, transparency and safety. The international standards are well complied with to maintain global standard of performance.

Important elements of India stock market -
  • Investors
  • Issuers
  • Intermediaries
  • Regulators

If all these four elements are taken good care of from the onset, a stock market can easily exhibit sound growth and perform exponentially.

Last Updated on 07/07/2011

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