The Indian Share Market, or the stock market, is a vast and complex system. It is influenced by a plethora of economic, social, and political factors. It offers investors an opportunity to invest in the shares of publicly listed companies and participate in the growth of the Indian economy. However, there are specific things you must know about it.
Such knowledge will help you make informed decisions and prosper in your investing journey. So, here is a list of such things about the Share Market today:
- Types of markets
The Indian Share Market comprises two main types of markets: primary and secondary. The primary market is where companies raise capital by issuing new shares through an Initial Public Offering. The secondary market is where investors trade these shares among themselves. The secondary market is further divided into two categories: the National Stock Exchange and the Bombay Stock Exchange.
- Market indices
Market indices are a measure of the overall performance of the stock market. In India, the two most popular market indices are the NSE Nifty 50 and the BSE Sensex. The Nifty 50 tracks the performance of the top 50 companies listed on the NSE, while the Sensex tracks the performance of the top 30 companies listed on the BSE.
These indices provide investors with a snapshot of the market's movement. Moreover, they help investors make informed decisions and dodge market risks.
- Market capitalisation
Market capitalisation is a measure of a company's size and value. It is calculated by multiplying the company's share price by the number of outstanding shares. It impacts the company’s share price and the overall movement of the market. For example, HDFC Bank is one of the largest companies listed on the Indian stock market. However, it is best to check the HDFC Bank Share price before investing.
- Stock prices
Stock prices are determined by the forces of supply and demand. If there is high demand for a particular stock, its price will rise, and vice versa. For example, the TCS Share price has seen an upward trend, from February 2016 to 2022. This way, stock prices are influenced by various factors. These include the company’s performance, economic indicators, and investor sentiment.
- Dividends
Dividends are a portion of a company's profits that are distributed to its shareholders. Companies may choose to distribute dividends as cash or in the form of additional shares. They can be an attractive source of income for investors and can impact the share price of a company. Hence, investors must consider them to maximise their returns.
- Regulatory Framework
The Indian stock market is regulated by the Securities and Exchange Board of India. It is responsible for ensuring transparency and fairness in the market and protecting the interests of investors. It lays down rules and regulations for listed companies, brokers, and investors to ensure a level playing field for investors.
