TRUBA COLLEGE OF ENGINEERING & TECHNOLOGY, INDORE

DEPARTMENT OF MANAGEMENT STUDIES

(DEVI AHILYA VISHWAVIDYALAYA INDORE)

A MAJOR RESEARCH PROJECT ON:

A ANALYTICAL STUDY OF STOCK MARKET & THEIR SEGMENTS

(For the partial fulfillment of the requirement for award of the degree of Masters of Business Administration [Full Time] 2years Programme 2009-11

GUIDED BY: VIKAS JAIN Senior lecturer (Finance) & Head Academic Truba College of Engg. & Tech.

PREPARED BY: PRASHANT GOLE MBA (FT) 4Th Semester Roll No. - 09170010

DECLARATION

I, the undersigned Mr. PRASHANT GOLE declare that this Research Project A Analytical Study of Stock Market and Their Segments Is based on my original work and my indebtness to other work, publications has been duly acknowledged at relevant places.

SUBMITTED BY: PRASHANT GOLE MBA 4th Sem Roll No.09170010

GUIDED BY: VIKAS JAIN Senior lecturer (Finance) & Head Academic Department of Management Studies

TRUBA College of Engineering & Technology, Indore

CERTIFICATE
This is to certify that Mr. PRASHANT GOLE a student of MBA (FT) 2 years semester 4 from Truba College of Engineering and Technology, Indore (M.P.) has completed his Research Project on the topic A Analytical Study Stock Market and Their Segment under my guidance and supervision and his work is original and genuine.

Prof: VIKAS JAIN Senior lecturer (finance) Head Academic TRUBA College of Engineering & Technology Indore [MP]

ACKNOWLEDGEMENT
The duration of the project report was the one etched in my memory for the long time to come. I do have certain people to thank for it being a memorable experience. Dr. Ritu Joshi (Head of the Department) has been a source of inspiration and I would like to thank her in all my humbleness. Mr. Vikas Jain my guide during the project period has been the ever present pillar of support and guidance throughout. I am indeed indebted to him for the experience and information he shared with me. His suggestions and comments have made the report more valuable. I would like to thank my family members, my friends and entire staff of Truba College of Engineering and Technology for making the atmosphere amicable and makes me feel at ease at the time of stress. At last I am thankful to all those persons who help me directly and indirectly to cover the wide aspect of Research Project. With Sincere Thanks

Prashant Gole

CHAPTER-1 Introduction of Study

INTRODUCTION
Stock exchanges to some extent play an important role as indicators, reflecting the

Performance of the country's economic state of health. Stock market is a place where securities are bought and sold. It is exposed to a high degree of volatility; prices fluctuate within minutes and are determined by the demand and supply of stocks at a given time. Stockbrokers are the ones who buy and sell securities on behalf of individuals and institutions for some commission.

THERE ARE TWO TYPES OF MARKETS IN INDIA

Money market Capital Market

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. In 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)

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 divided in two segment primary market Secondary Market

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 were drawn 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.

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 incentivebased management contracts,And aggregating information (via price discovery)
that guides management decisions. A bit about history of stock exchange they say

it was under a tree that it all started in 1875.Bombay Stock Exchange (BSE) was the major exchange in India till 1994.National Stock Exchange (NSE) started operations in 1994.

LITERATURE REVIEW

Stock market is volatile market it depend on past data and fundamental research. The research here is a type of descriptive research hence the literature used by me will be qualitative which would deal with certain studies the literature would be collected from the journals, newspaper, magazines and websites which would Help in enhancing the accuracy & reliability of my research all the data sources used here would be secondary in last year study the topic is comparative analysis of national stock exchange with new York stock exchange it is basic of the topic is compare the national stock exchange and what is the the different thing in Indian market and new York market new York stock exchange it is the different of my study I am study for A analytical study of stock market and their segment it is basically depend on technically and fundamental research of the company share which is listed in stock market

THE OBJECTIVE OF THIS PROJECT

My objectives for this project are: 1) To study volatility in Indian stock market while taking SENSEX of Bombaystock exchange as a source of secondary data which broadly representIndian stock market along with NIFTY of National stock exchange. 2) To study the factors which are making Indian stock market volatile. 3) To furnish institutional material relevant for understanding the environment in which stock market fluctuation are occurring. 4) TO Get information from the research to learn more about the stock market; 5) TO Investigate the effects of the trading stratagem through the process of the trading simulation; 6)Establishing a nationwide trading facility for all types of securities; 7) Ensuring equal access to investors all over the country through an appropriate communication network

RESEARCH METHODOLGY

To conduct the market research first of all its necessary to create research design. Research design is basically a blue print of how a research is to be conducted. There are three types of approaches used during the any research1) Exploratory 2) Descriptive 3) Experimental During this research descriptive and exploratory approach is taken into consideration because of the availability of relevant information to describe the relationship between the marketing problem and the available information.

Sources of data
Data used in this study is of secondary in nature. Sensex and Nifty is taken as asource of information which widely describes Indian stock market. Here monthly prices of both indexes are taken for the study purpose. Types of data

Primary data- The primary sources of data refer to the company groth rate
&company share in the market it first data to collect by company history

Secondary data- collect by books News paper and magazines, Internet.

SCOPE

This study can be used by investors, traders and other professionals as a supplement to their own research. The market that deals in shares and stocks can be depicted as a fluid that supports the probability factors of density and viscosity at any possible time slot. So trading with such unexpected scenario can be tough and sketchy if an individual is not at all updated with these abrupt changes of the share market. In online share trading interface of the user with the market at maximum availability can yield an effective result to his trading. Such a facet demands high speed connection of the Internet for market notification so that the platform of trading can be captured with snapshots that will keep track of every second change of the same

LIMITATION

Generally speaking, when people think of the money that can be made from the stock market, most think of the buying and selling of stocks. This is a very limited view that conflates the entire of the stock market investment field down to mere stock value. However, it is in trading options where real money can be made from the stock market. Trading options is far more interesting simply because an option is a much more interesting investment mechanism. An option is a derivative investment instrument, meaning its value is derived from another investment, namely stock. What this means is that an options value is somewhat related to the value of stock. The reason why trading options are so lucrative is because they allow a trader to reserve the right to purchase or sell the underlying stock within a specific time frame, but without obligating him or her to do so. For example, when you have a call option for a certain companys stock it means that you reserve the right to purchase the stock just before it goes up in value. However, there is a deliberate time limit on an option, which means they are not all-powerful and do not allow you to reserve the stock forever.

CHAPTER-2 An overview of stock market

INDIAN STOCK MARKET OVERVIEW

Indian Stock Markets are one of the oldest in Asia. Its history dates back to nearly 200 years ago. The earliest records of security dealings in India are meager and obscure. The East India Company was the dominant institution in those days and business in its loan securities used to be transacted towards the close of the eighteenth century.Thus, at present, there are totally twenty-one recognized stock exchanges in India excluding the Over The Counter Exchange of India Limited (OTCEI) and the National Stock Exchange of India Limited (NSEIL).

ORIGIN OF INDIAN STOCK MARKET

The origin of the stock market in India goes back to the end of the eighteenth century when long-term negotiable securities were first issued. However, for all practical purposes, the real beginning occurred in the middle of the nineteenth century after the enactment of the companies Act in 1850, which introduced the features of limited liability and generated investor interest in corporate securities. An important early event in the development of the stock market in India was the formation of the native share and stock brokers 'Association at Bombay in 1875, the precursor of the present day Bombay Stock Exchange. This was followed by the formation of associations/exchanges in Ahmedabad (1894), Calcutta (1908), and Madras (1937). In addition, a large number of ephemeral exchanges emerged mainly in buoyant periods to recede into oblivion during depressing times subsequently. Stock exchanges are intricacy inter-woven in the fabric of a nation's economic life. Without a stock exchange, the saving of the community- the sinews of economic progress and productive efficiency- would remain underutilized. The task of mobilization and allocation of savings could be attempted in the old days by a much less specialized institution than the stock exchanges. But as business and industry expanded and the economy assumed more complex nature, the need for 'permanent finance' arose. Entrepreneurs needed money for long term whereas investors demanded liquidity the facility to convert their investment into cash at any given time. The answer was a ready market for investments and this was how the stock exchange came into being. Stock exchange means any body of individuals, whether incorporated or not, constituted for the purpose of regulating or controlling the business of buying, selling or dealing in securities. These securities include: (i) Shares, scrip, stocks, bonds, debentures stock or other marketable securities of a like nature in or of any incorporated company or other body corporate; (ii) Government securities; and

(iii) Rights or interest in securities.

TRADING PATTERN OF THE INDIAN STOCK MARKET

Trading in Indian stock exchanges is limited to listed securities of public limited companies. They are broadly divided into two categories, namely, specified securities (forward list) and non-specified securities (cash list). Equity shares of dividend paying, growth-oriented companies with a paid-up capital of at least Rs.50 million and a market capitalization of at least Rs.100 million and having more than 20,000 shareholders are, normally, put in the specified group and the balance in no specified group. Two types of transactions can be carried out on the Indian stock exchanges: (a) spot delivery transactions "for delivery and payment within the time or on the date stipulated when entering into the contract which shall not be more than 14 days following the date of the contract: and (b) forward transactions "delivery and payment can be extended by further period of 14 days each so that the overall period does not exceed 90 days from the date of the contract". The latter is permitted only in the case of specified shares. The brokers who carry over the outstanding pay carry over charges (can tango or backwardation), which are usually determined by the rates of interest prevailing. A member broker in an Indian stock exchange can act as an agent, buy and sell securities for his clients on a commission basis and also can act as a trader or dealer as a principal, buy and sell securities on his own account and risk, in contrast with the practice prevailing on New York and London Stock Exchanges, where a member

can act as a jobber or a broker only.The nature of trading on Indian Stock Exchanges are that of age old conventional style of face-to-face trading with bids and offers being made by open outcry. However, there is a great amount of effort to modernize the
Indian stock exchanges in the very recent times.

MAIN FINANCIAL PRODUCTS IN THE SECONDARY MARKET

Equity: The ownership interest in a company of holders of its common and

preferred stock. The various kinds of equity shares are as follows

Equity Shares: An equity share, commonly referred to as ordinary share also

represents the form of fractional ownership in which a shareholder, as a fractional owner, undertakes the maximum entrepreneurial risk associated with a business venture. The holders of such shares are members of the company and have voting rights. A company may issue such shares with differential rights as to voting, payment of dividend, etc.

Rights Issue/ Rights Shares: The issue of new securities to existing shareholders
at a ratio to those already held.

.Bonus Shares: Shares issued by the companies to their shareholders free of

cost by capitalization of accumulated reserves from the profits earned in the earlier years.

Preferred Stock/ Preference shares: Owners of these kind of shares are

entitled to a fixed dividend or dividend calculated at a fixed rate to be paid regularly before dividend can be paid in respect of equity share. They also enjoy priority over the equity shareholders in payment of surplus. But in the event of liquidation, their claims rank below the claims of the companys creditors, bondholders / debenture holders. Cumulative Preference Shares: A type of preference shares on which dividend accumulates if remains unpaid. All arrears of preference dividend have to be paid out before paying dividend on equity shares. Cumulative Convertible Preference Shares: A type of preference shares where the dividend payable on the same accumulates, if not paid. After a specified date, these shares will be converted into equity capital of the company.

Participating Preference Share: The right of certain preference shareholders to

participate in profits after a specified fixed dividend contracted for is paid. Participation right is linked with the quantum of dividend paid on the equity shares over and above a particular specified level.

Security Receipts: Security receipt means a receipt or other security, issued by

a securitisation company or reconstruction company to any qualified institutional buyer pursuant to a scheme, evidencing the purchase or acquisition by the holder thereof, of an undivided right, title or interest in the financial asset involved

in securitisation.

Government securities (G-Secs): These are sovereign (credit risk-free) coupon

bearing instruments which are issued by the Reserve Bank of India on behalf of Government of India, in lieu of the Central Government's market borrowing programme. These securities have a fixed coupon that is paid on specific dates on half-yearly basis. These securities are available in wide range of maturity dates, from short dated (less than one year) to long dated (upto twenty years).

Debentures: Bonds issued by a company bearing a fixed rate of interest usually

payable half yearly on specific dates and principal amount repayable on particular date on redemption of the debentures. Debentures are normally secured/ charged against the asset of the company in favour of debenture holder.

Bond: A negotiable certificate evidencing indebtedness. It is normally unsecured.

A debt security is generally issued by a company, municipality or government agency. A bond investor lends money to the issuer and in exchange, the issuerpromises to repay the loan amount on a specified maturity date. The issuer usually pays the bond holder periodic interest payments over the life of the loan. The various types of Bonds are as follows-

Zero Coupon Bond: Bond issued at a discount and repaid at a face value. No
periodic interest is paid. The difference between the issue price and redemption price represents the return to the holder. The buyer of these bonds receives only one payment, at the maturity of the bond. Convertible Bond: A bond giving the investor the option to convert the bond into equity at a fixed conversion price.

Commercial Paper: A short term promise to repay a fixed amount that is placed
on the market either directly or through a specialized intermediary. It is usually issued by companies with a high credit standing in the form of a promissory note redeemable at par to the holder on maturity and therefore, doesnt require any guarantee. Commercial paper is a money market instrument issued normally for a tenure of 90 days. Treasury Bills: Short-term (up to 91 days) bearer discount security issued by the Government as a means of financing its cash requirements.

THERE ARE TWO INDEX IN STOCK MARKET

NSE(NATIONAL STOCK EXCHANGE )

BSE(BOMBAY STOCK EXCHANGE)

NSE (NATIONAL STOCK EXCHANGE)

With the liberalization of the Indian economy, it was found inevitable to lift the Indian stock market trading system on par with the international standards. On the basis of the recommendations of high-powered Pherwani Committee, Industrial Development Bank of India, Industrial Credit and Investment Corporation of India, Industrial Finance Corporation of India, all Insurance Corporations, selected commercial banks and others incorporated the National Stock Exchange in 1992.

Market Segments and Products IN NSE

NSE provides an electronic trading platform for of all types of securities for investors under one roof - Equity, Corporate Debt, Central and State Government Securities, TBills, Commercial Paper, Certificate of Deposits (CDs), Warrants, Mutual Funds units, Exchange Traded Funds, Derivatives like Index Futures, Index Options, Stock Futures, Stock Options, Futures on Interest Rates etc., which makes it one of the few exchanges in the world providing trading facility for all types of securities on a single exchange.

The NSE provides trading in 3 different segments:

Wholesale debt market (WDM)

Capital market (CM) segment and The futures & options (F&O) segment.

Wholesale debt market (WDM)

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, 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 InterBank 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.

Capital market (CM) 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 2004-05 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. Trading volumes in the equity segment have grown rapidly with average daily turnover increasing from Rs.17 crores during 1994-95 to Rs.6,253 crores during 2005-06. During the year 2005-06, NSE reported a turnover of Rs.1,569,556 crores in the equities segment. 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.

The futures & options (F&O) segment:

Futures & Options segment of NSE provides trading in derivatives instruments like Index Futures, Index Options, Stock Options, Stock Futures and Futures on interest rates. 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. W.e.f. May 27 2005, futures and options would be available on 118 single stocks. The average daily turnover in the F&O Segment of the Exchange during 2004-05 was nearly Rs. 10,067 crs.

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.

Bombay Stock Exchange Limited (BSE) which was founded in 1875 with six brokers

CHEPTER-3 Introduction of stock market

INDIAN STOCK MARKET

Stock markets refer to a market place where investors can buy and sell stocks. The price at which each buying and selling transaction takes is determined by the market forces (i.e. demand and supply for a particular stock).

Let us take an example for a better understanding of how market forces determine stock prices. ABC Co. Ltd. enjoys high investor confidence and there is an anticipation of an upward movement in its stock price. More and more people would want to buy this stock (i.e. high demand) and very few people will want to sell this stock at current market price (i.e. less supply). Therefore, buyers will have to bid a higher price for this stock to match the ask price from the seller which will increase the stock price of ABC Co. Ltd. On the contrary, if there are more sellers than buyers (i.e. high supply and low demand) for the stock of ABC Co. Ltd. in the market, its price will fall down.

In earlier times, buyers and sellers used to assemble at stock exchanges to make a transaction but now with the dawn of IT, most of the operations are done electronically and the stock markets have become almost paperless. Now investors dont have to gather at the Exchanges, and can trade freely from their home or office over the phone or through Internet. With over 20 million shareholders, India has the third largest investor base in the world after the USA and Japan. Over 9,000 companies are listed on the stock exchanges, which are serviced by approximately 7,500 stockbrokers. The Indian capital market is significant in terms of the degree of development, volume of trading and its tremendous growth potential.

Worldwide Stock Markets Source: ETIG, November 2010/ August 2007 Country 1 2 3 4 5 6 7 % of world m-cap 2010 Market cap (US$ b) 2007 17,923 4,615 3,059 3,722 2,180 1,620 2,653

USA 29.70% Japan 7.97% China 6.89% United Kingdom 6.72% Hong Kong 4.97% Canada 3.74% France 3.55%

8 India 9 Germany 10 Brazil

3.22% 2.84% 2.84%

1,090 1,976 -

The National Stock Exchange of India Limited has genesis in the report of the High Powered Study Group on Establishment of New Stock Exchanges, which recommended promotion of a National Stock Exchange by financial institutions (FIs) to provide access to investors from all across the country on an equal footing. Based on the recommendations, NSE was promoted by leading Financial Institutions at the behest of the Government of India and was incorporated in November 1992 as a tax-paying company unlike other stock exchanges in the country. On its recognition as a stock exchange under the Securities Contracts (Regulation) Act, 1956 in April 1993, NSE commenced operations in the Wholesale Debt Market (WDM) segment in June 1994. The Capital Market (Equities) segment commenced operations in November 1994 and predations in Derivatives segment commenced in June 2000 It is the largest stock exchange in India and the third largest in the world in terms of volume of transactions. NSE is mutually-owned by a set of leading financial institutions, banks, insurance companies and other financial intermediaries in India but its ownership and management operate as separate entities. As of 2006, the NSE VSAT terminals, 2799 in total, cover more than 1500 cities across India. In March 2006, the NSE had a total market capitalization of 4,380,774 crore INR making it the second-largest stock market in South Asia in terms of market-capitalization.

1.2.9 S&P CNX NIFTY

S&P CNX Nifty is a well diversified 50 stock index accounting for 22 sectors of the economy. It Is used for a variety of purposes such as benchmarking fund portfolios, index based derivatives And index funds.S&P CNX Nifty is owned and managed by India Index Services and Products Ltd. (IISL), which is a joint venture between NSE and CRISIL. IISL is India's first specialized company focused upon the index as a core product. IISL have a consulting and licensing agreement with Standard & Poor's (S&P), who are world leaders in index services. The average total traded value for the last six months of all Nifty stocks is approximately 45.24% of the traded value of all tocks on the NSE .Nifty stocks represent about 57.92% of the total market capitalization as on April 10, 2007. Impact cost of the S&P CNX Nifty for a portfolio size of Rs.5 million is 0.08% .P CNX Nifty is professionally maintained and is ideal for derivatives trading

1.2.10 TYPES OF STOCKS 1. BLUE CHIP STOCKS

the term blue chip comes from poker, where the blue chip carry the highest value .large established firms with a long record of profit growth, dividend payout and a reputation for quality management, products and service are referred to as blue chip companies. These firms are generally leaders in their industries and are considered likely candidates for long term growth .because blue chip companies are held in such high esteem, they often set the standard by which other companies in their field are measured .well known blue chip companies includes IBM, Coco-Cola, general electric and McDonald

2. PENNY STOCKS
Penny stocks are low priced speculative stock, that are very risky .companies with a short or erratic history of revenues and earnings issue them .they are the lowest of the low in price and many stock exchanges choose not trade them.

3. INCOME STOCKS

Income stocks are those stocks that pay higher than average dividend over a sustained period .these above average dividend tends to be paid by large, established companies with stable

CHPAPTER-4 THE ORGANIZATIONAL

SET UP OF STOCK MARKET

SEBI
SECURITY AND EXCHANGE BOARD OF INDIA The SEBI is the regulatory authority established under Section 3 of SEBI Act 1992 to protect the interests of the investors in securities and to promote the development of, and to regulate, the securities market and for matters connected therewith and incidental thereto. Government of India in the Department of Economic Affairs No.1 (44)SE/86, dated the 12th day of April, 1988; The Board shall consist of the following members, namely:1. A Chairman

2. Two members from amongst the officials of the Ministry of the Central Government dealing with Finance (and administration of the Companies Act, 1956;) 2 of 1934 3. One member from amongst the officials of [the Reserve Bank 4. Five other members of whom at least three shall be the whole-time members

Departments of SEBI regulating trading in the secondary market (1) Market Intermediaries Registration and Supervision department (MIRSD)
Registration, supervision, compliance monitoring and inspections of all market intermediaries in respect of all segments of the markets viz. equity, equity derivatives,debt and debt related derivatives.

(2) Market Regulation Department (MRD)

Formulating new policies and supervising the functioning and operations (except relating to derivatives) of securities exchanges, their subsidiaries, and market institutions such as Clearing and settlement organizations and Depositories (Collectively referred to as Market SROs).

(3)Derivatives and New Products Departments (DNPD)

Supervising trading at derivatives segments of stock exchanges, introducing new products to be traded, and consequent policy changes

CHAPTER-5 ANALYSIS AND INTERPRETATION

CHAPTER-6 Findings, conclusions & suggestions

Bibliography

CONTENTS

CHAPTER-1: Introduction of Study CHAPTER-2:An overview of Stock market CHAPTER-3:Introduction of New York Stock Exchange CHPAPTER-4: Analysis & Interpretation CHAPTER-5: Performance of Both Stock exchanges CHAPTER-6:Findings, conclusions & suggestions Bibliography