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A STUDYOF INDIAN STOCKMARKETS & THEIROPERATIONS

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Indian Stock Market

An organized market place, either corporation or mutual

organization

Members of the organization gather to trade company

stocks or other securities

Not all stock transactions take place on a stock

exchange

Companies traded on a stock exchangeListed

Companies not traded on a stock exchange -

Unlisted

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Major Stock Exchanges inIndia

Once a company's public offering is complete, it gets

listed in a stock exchange. Currently there are 25

stock exchanges in India:-

Bombay Stock Exchange (BSE)

National Stock Exchange (NSE)

23 Regional Stock Exchanges

Overall guidelines for the marketplace are established

by the Securities and Exchange Board of India (SEBI)

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Bombay Stock Exchange(BSE)

Established in 1875, earlier known as the Native Share and

Stock Brokers Association oldest stock exchange in Asia

Includes 5000 listed companies across 296 cities and towns Total market capitalization around Rs. 71 trillion

Ranked around 4th in terms of annual transactions

After compensating for inflation, the BSE has averaged a

15.8% annual return when measured by Sensex, the most

popular stock index in India, over the last 20 years.

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BSE Mechanism

Operated through a unique and proprietary computer systemknown as the "BSE On Line Trading System" (BOLT)

Index of the performance of the 30 largest & most profitable,

popular companies listed BSE Index or Sensex

Allows investors to maintain liquidity for their investment by

allowing any shareholder to sell his or her shares almost instantly

The capacity of the BOLT platform stands presently enhanced to

80 lakhs orders per day

Price Discovery Mechanism

Large Private Network

First in India to launch US$ version of BSE Sensex

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National Stock Exchange(NSE)

India's largest Stock Exchange & World's third largest Stock

Exchange in terms of transactions located in Mumbai

In April 1993, NSE was recognized as a Stock exchange

under the Securities Contracts (Regulation) Act-1956

Nation-wide, fully automated screen based trading system

Set up on a demutualised model

Establishing nationwide trading facility for all types of

securities

Enabling shorter settlement cycles and book entry

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NSE Mechanism Index of the performance of the 50 largest & most profitable, popular

companies listed NSE Index or Nifty Index

NSE Trading System - 'National Exchange for Automated Trading' (NEAT)

Introduced for the first time in India, fully automated screen based trading

Adopts the principle of an order driven market

Trading System Order Matching Rule

Reduces transaction cost

Four types of Market:

Normal Market

Odd Lot Market

Auction Market

Spot Market

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