What is the stock market? Everything you need to know.

2024-10-30 12:12:02

By : JSB Market Research

In : BLOG

A stock market is a place where buyers and sellers come together to buy and sell shares, also known as stocks, representing an ownership claim in the businesses.

What are stocks?

The first thing you should know is, What are stocks? Stocks, also known as equities, when purchased, give you partial ownership of a publicly listed company. In short, when you buy a stock of the company, you own a part of that company.

The unit of stock is called a share; the more shares you purchase, the more stock you own in a firm. Companies issue stocks to raise capital to expand their operations.

Understanding Stock Market

The stock market is the buying and selling of the stock of a publicly listed company. The stock market can be easily thought of as a network of stock exchanges where investors and traders purchase and sell shares of publicly traded corporations.

Securities include government securities, rights or interest in securities, shares, bonds, debentures, stocks, and other marketable securities of established businesses or similar entities.

The two main stock markets in India, the National Stock Exchange of India (NSE) and the Bombay Stock Exchange (BSE), are referred to as the "share market" in India. Likewise, there are 22 regional stock exchanges.

What is the history of the Indian stock market?

The history of the stock market dates back to the 1500s in Antwerp and London. With the establishment of the Amsterdam Stock Exchange in 1668, the modern stock market was formed. It was the first exchange to introduce features of contemporary stock markets, such as the first public offerings, which included the sale of shares of the Dutch East India Company.

Before the official opening of the New York Stock Exchange in 1817 with trading stocks of insurance, banking, and coal companies located at the East Coast corridor, early trading activity consisted of government bonds and bank stocks. Stock markets first appeared in other European cities in the late 1700s, and they were first introduced into the newly formed United States in 1792 on Wall Street in New York City.

The establishment of the Bombay Stock Exchange (BSE) in the 19th century and the National Stock Exchange (NSE) in 1992 brought significant change. NSE began computerized trading and promoted transparency; the late 20th century saw some revolutionary changes. The primary indices like the Nifty 50 and BSE Sensex quickly became crucial benchmarks to track the market performance.

The Indian stock exchange has faced several challenges and concerns. Scandals like the Ketan Parekh and Harshad Mehta scams in the 90s emphasized the necessity of improving regulations. The global financial crisis of 2008 had a big effect as well.

How does the stock market work?

Stock market investing in India is popular among traders, investors, and businesses. It takes several factors for the stock market to work:

Participants: The stock exchange offers a venue for financial product trading. Before trading begins, brokers, traders, investors, and firms (listing their shares) must register with SEBI and the exchange (BSE, NSE, or regional markets).
SEBI: It is SEBIs primary duty to regulate the smooth and transparent operation of the Indian stock market so that investors can invest without any concern. The exchanges, businesses, brokerages, and other players should follow the rules set by SEBI.
Stockbrokers: The members of the exchange are known as stockbrokers. They are the middlemen who, in return for fees, carry out investors' purchases and sells orders. Investors must transact through broking companies or brokers in the Indian system, who serve as intermediaries.
Traders and investors: There are two market participants: investors and traders. Investors buy company shares to hold them for a long time and earn money from them. In contrast to investors, traders engage in the buying and selling of stocks.

FAQs

What time does the stock market open?

The stock market opens at 9:15 am every day, except for Saturday and Sunday.

What time does the stock market close?

The closing time of the stock market is 3:45 pm; the closing session is from 3:15 to 4:00 pm.

Who regulates the Indian stock market?

Securities and Exchange Board of India (SEBI) regulates the Indian stock market.