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Indian Stock Market Basics, News, History, Research & Wikipedia Information

BSE buildingIn the below post, you will find an answer to Indian stock market where we have tried to provide you with an overview of the same as we believe that before you jump in stock market arena, you must be totally knowledgeable about the working and functioning of stock market and as a matter of fact about any of the stock exchanges in India.

The Bombay Stock Exchange (BSE) and the National Stock Exchange of India Ltd (NSE) are the two primary exchanges in India. In addition, there are 22 Regional Stock Exchanges. However, the BSE and NSE have established themselves as the two leading exchanges and account for about 80 per cent of the equity volume traded in India. Both the exchanges have switched over from the open outcry trading system to a fully automated computerized mode of trading known as BOLT (BSE On Line Trading) and NEAT (National Exchange Automated Trading) System. It facilitates more efficient processing, automatic order matching, faster execution of trades and transparency and thus we can say that now trading has been brought to your bedroom by virtue of online trading available on laptops and mobiles. The NSE and BSE are equal in size in terms of daily traded volume.

However now NSE has overtaken the BSE in terms of the volumes. NSE started late but it has by virtue of its ethical working and innovative features have beaten BSE hands down in terms of the volume and lesson learnt is that even if one is new in business and undertakes the correct strategy, one can beat the established players at their own game.

NSE has around 1500 shares listed with a total market capitalization of around Rs 9,21,500 crore (Rs 9215-bln). The BSE has over 6000 stocks listed and has a market capitalization of around Rs 9,68,000 crore (Rs 9680-bln). This data is an outdated data and one can refer to the NSE and BSE websites for correct daily turnovers in the market. Most key stocks are traded on both the exchanges and hence the investor could buy them on either exchange.

Both exchanges have a different settlement cycle, which do not allows investor to shift their positions on the bourses. However now an effort is underway by virtue of which traders will be able to shift their positions in either of the exchanges and thus will be able to benefit from the arbitrage opportunity available in either of the exchange. The primary index of BSE is BSE Sensex comprising 30 stocks. NSE has the S&P NSE 50 Index (Nifty) which consists of fifty stocks. The BSE Sensex is the older and more widely followed index. Both these indices are calculated on the basis of market capitalization and contain the heavily traded shares from key sectors. The markets are closed on Saturdays and Sundays. 

The scrips traded on the BSE have been classified into 'A', 'B1', 'B2', 'C', 'F', ‘T’and 'Z' groups. The 'A' group shares represent those, which are in the carry forward system (Badla). The 'F' group represents the debt market (fixed income securities) segment. The 'Z' group scrips are the blacklisted companies. The ‘T’ group stocks are trade to trade settlement stocks. The 'C' group covers the odd lot securities in 'A', 'B1' & 'B2' groups and Rights renunciations.

The key regulator governing Stock Exchanges, Brokers, Depositories, Depository participants, Mutual Funds, FIIs and other participants in Indian secondary and primary market is the Securities and Exchange Board of India (SEBI) Ltd. Thus as anew trader one must keep away from T and Z group of stocks and to be on the safer side one should either trade in Nifty basket stocks or Sensex comprising stocks or one can extend the reach maximum to 'A', 'B1', 'B2' as these stocks still have decent volume and one must keep away from penny stocks. Hope our effort will be able to answer your following queries in the stock market field

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