Basic Information on the Stock Market in India

Basic Information on the Stock Market in India

The Indian stock market is made up of 22 stock exchanges. The most prominent among these are the Bombay Stock Exchange, National Stock Exchange, and Over the Counter Stock Exchange of India. According to the Securities and Exchange Board of India (SEBI), the regulatory authority, there were 1,680 registered foreign institutional investors (FIIs) in India as of August 13, 2009. Total investments by FIIs for this period amounted to $65.5 billion.

The Bombay Stock Exchange

1.      Established in 1875, the Bombay Stock Exchange (BSE) is the oldest stock exchange in Asia. BSE ranks number one globally on the basis of the number of companies listed, which is more than 5,500. As of December 31, 2007, market capitalization was $ 1.79 trillion.
You can buy and sell stocks in the BSE via BSEWEBX.com, an internet trading platform, if you are registered with a BSE broker. The BSE index, the SENSEX, consists of 30 stocks. The exchange has a total of 22 indices,12 of which are sector-based.

The National Stock Exchange

2.      The National Stock Exchange of India (NSE) is the largest securities exchange in the country on the basis of daily turnover (value). On May 19, 2009, the daily turnover was Rs.8.33 billion. Incorporated in 1992, NSE created an advanced automated electronic trading system, accessible from 1,486 locations in India. NSE commenced operations in the wholesale debt market segment in June 1994. The equities segment was operational in November 1994 and the derivatives segment, in June 2000. The exchange is owned by 20 banks and insurance companies. As of January 8, 2008, the S&P CNX Nifty Index was Rs. 1.32 billion. NSE's subsidiaries are the National Securities Clearing Corporation, NSE Infotech Services and NSE.IT (securities technology).
NYSE Euronext, a division of the New York Stock Exchange, has a 5 percent equity stake in NSE.

Over the Counter Exchange

3.      Established in 1990, Over the Counter Exchange of India (OTCEI) is the only exchange in the country that permits small and mid-sized companies, operational for less than three years, to raise funds in the capital market. It was the first exchange in India to permit market making---a two-way buy/sell order for securities.

SENSEX Components

4.      The BSE Sensex consists of 30 large-cap companies in a smattering of industries including cement, telecommunications, real estate, banking, IT, construction, automobile, oil, pharmaceuticals, energy and steel. Major companies in the Sensex are Infosys Technologies (also listed in NASDAQ), Reliance, Tata Steel, Tata Power, and Tata Motors, which owns the Jaguar, Land Rover and Range Rover brands.

NSE 50 Components

5.      The S&P CNX Nifty consists of 50 companies in 21 industries such as cement, telecommunications, pharmaceuticals, banking, automobile, construction, aluminium, oil exploration, gas and finance. Prominent companies are Bharat Heavy Electricals,Bharti Airtel, Cairn India, GAIL (India), Hero Honda Motors, Hindustan Unilever, Housing Development Finance Corporation and Infosys Technologies.

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