An Introduction To The Indian Stock Market


Mark Twain had once divided the whole world’s population into two kinds of individuals: those who’ve visited the renowned Indian monument, Taj Mahal, and the ones who haven’t. A similar thing could be said about the investors. One can find two groups of investors – individuals who are aware of the investment options in India and others who don’t. Though India might look like a tiny dot to a professional investor in the United States, but upon a closer inspection, you’ll notice the things you’d typically observe in any promising market. Below we’re going to provide an introduction to the Indian stock market as well as how interested investors could gain exposure to this arena.

Indian Stock Market Overview

The majority of the trading happening in the Indian stock market is taking place on its 2 stock exchanges – the NSE (National Stock Exchange) and BSE (Bombay Stock Exchange). Interestingly, the BSE has been around since 1875. While the NSE, however, was founded in the year 1992 and began trading two years later, in 1994. Having said that, the two exchanges adopt the exact same trading mechanism and procedure, trading hours and duration, settlement process, and so on. At the previous count, there were over 4700 listed firms in the BSE, while the NSE had around 1200. Of the many listed firms trading on the BSE, just about 500 firms amount to greater than 9/10th of its market capitalization, and the remaining bunch includes highly illiquid shares.

When you find yourself comfortable enough to begin independent trading, you should open up a Demat account with any bank or stock trading firm (or stock broker). Even though you are confident enough to trade, it’s highly recommended that you trade in small amounts and under the guidance of someone who has got working experience of investing in the Indian stock market.

For beginner level, it is suggested that you get started with a “virtual” Demat account in order to get acquainted with the trading routines and activities along with their pattern. Plus it will make you recognize the area in which your trading interest actually lies. There are numerous virtual trading accounts offered by the large firms, some even for free, while the others with a low start-up fee to help you learn the strategies of trading in the Indian stock market.

Indian stock market

It’s a well recognized fact that there is substantial participation from institutional investors the Indian stock market. This is great news, however on the other hand, it makes the Indian stock markets more susceptible to global financial shocks. The Flls often move the investments and the swings produce intense price fluctuations leading to increased volatility. And when episodes just like the one from the year 2008 re-occur, the flight of the capital will certainly have a worse impact not merely on the actual financial markets, but additionally on the real economy and the economic climate. The anticipated slowdown in the Eurozone as well as the US may result into an outflow of large amount of foreign money from the Indian market.

Bothered about the present condition of the market? Well, ebb and flow is usually a part-and-parcel of not just the Indian stock markets, but all the global markets. So, the way you swim along is totally dependent on the kind of trading decisions you generally take.

Written by H. Abbas

My name is H. Abbas. I blog, therefore I am – And I am a real web enthusiast that loves to write on several topics and niches. If you like (or dislike) my posts then please comment and I will be sure to read and comment back!

H. Abbas

My name is H. Abbas. I blog, therefore I am - And I am a real web enthusiast that loves to write on several topics and niches. If you like (or dislike) my posts then please comment and I will be sure to read and comment back!

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About H. Abbas

My name is H. Abbas. I blog, therefore I am - And I am a real web enthusiast that loves to write on several topics and niches. If you like (or dislike) my posts then please comment and I will be sure to read and comment back!

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