Indian stock market
Indian stock exchanges host the most number of listed companies after United States. About 2500 companies are listed in the Bombay stock Exchange and the National Stock Exchange. Apart from foreign institutional investors, Indian stock market has some 30 million domestic investors.
The working of stock markets has started in India as early as 1875, when 318 persons coming together to Native Share and Stock Brokers Association, with Re.1 for membership fee.
Today the same place has Association has grown into BSE and compiles the benchmark index for 21 other exchanges spread throughout the country. BSE-Sensex is the benchmark index of Indian stock exchanges. The 30 stocks that BSE has selected to determine the index are *ACC, Bajaj, Bharti, BHEL, Cipla, Dr Reddy's, GACL, Grasim, HDFC, HDFC Bank, Hero Honda, Hindalco, HLL, ICICI Bank, Infosys, ITC, L&T, Maruti, NTPC, ONGC, Ranbaxy, Reliance, Reliance Energy, Satyam, SBI, Tata Motors, Tata Power, TCS, Tisco and Wipro. The 30 companies come from 13 different industries and they are the market leaders in their industries.
Closest to BSE is National Stock Exchange, also located at Bombay. Nifty is the market index of NSE. Indian stock market has seen many ups and downs, but now is flying high, crossing every previous record and zooms to even further heights. BSE-Sensex crossed the four-figure mark of 1000 in 1990 and had a smooth bull ride till 1992, when the big-bull of Indian stock market, Harshad Mehta became a villain in the infamous Harshad Mehta scam broke out. The sensex lost 570 points in no time and some eight to 12 million investors were pushed to bankruptcy.
After that incidence, came the Securities and Exchanges Board of India. With the enforcement of several regulations and strict guidelines, the confidence of investors was somewhat regained. With the present technology and practices, it is next to impossible to commit a fraud in Indian stock market. So claims the SEBI.
Under the watchful eyes of SEBI, Indian stock markets once again gained momentum. The sensex crossed reached and crossed 6000 mark in 2000 and crossed the 7000 and 8000 marks in 2005. Foreign Institutional Investors are pumping in money into the market. The FIIs are confident of a sustainable momentum. The momentum in the stock market can be associated with the growth in the fields of export, IT, ITES, telecommunication, education, energy sector, agriculture etc. The reformist policies being pursued by the government is also a factor for this growth.
Due to large scale outsourcing by American and European countries, a large number of jobs also went to India, resulting in more affluent youth who are only happy to spend out their money. This helped in the growth of telecommunication, FMCG and manufacturing sectors. The steady growth of GDP at around 6% is also a critical factor in the upward movement of Indian stock market. If the predictions of experts come true, sensex will go past 14000 by 2010.
Apart from FIIs, the non-resident Indians also invest hugely in the stock market. Diminishing returns from bank deposits and the facilities of online trading made them turn to stock markets and with the current bull-run many have made a good fortune from stock markets. The stockbrokers also chip in on and open offices in foreign countries, aimed at the NRIs there.
The initial public offers by Tata Consultancy Services, Maruti Udyog Limited, ONGC etc were big events in Indian stock market. Not only did they put a great show, but also took the stock market to newer heights. TCS is a big weight in the stock market from the day it was listed. Traditional heavy weights are Reliance, Tata, Bharati etc. Now new entrants like Biocon are also play significant roles in the market.
Growth directed at sky is visible everywhere. The biggest growth opportunity lies in the stock market itself. The population of India is well above one billion. The number of investors is just above 40 million. That is just 4% of the total population. The measures for a 10% growth are sought.
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