A rough outline to the Indian stock market
Mark twain once quipped that there are two kinds of people in the world: those who have visited the Taj Mahal and those who have not. The same can be told of global investors too. There are those investors who know about the booming investment opportunities in India and those who are unaware of anything happening in this Asian country with diverse business portfolios. India is one of the emerging markets in the global scenario that has shown explosive growth in the services industry since the 1990s. Although small in size the country is home to one among the top ten demographic wealth of the country. The stock market scene of India is one that is robust and vivid with great promises of wealth for those who have the will to bear the risk.
The nitty gritty of Indian stock market
In India, the stock market scene is dominated by two major stock exchanges – the Bombay Stock Exchange and National Stock Exchange. These stock exchanges can be referred to as the economic power house of the country from where financial needs of existing and to be floated companies originate from. The BSE has been working n India since 1857 and is one among the oldest functioning stock exchanges in the whole world. The NSE although young and new is in no measure short of investment opportunities for foreign investors as well domestic investors. However, a surprising fact is that both the trade houses follow the same functioning, working hours and investment settlement processes which are great advantages to investors as well as traders.
A briefing of Indians stock market scene
NSE and BSE put together have about 6900 companies listed in their registry. BSE boasts of a line share of 4700 companies whereas NSE has about 1200 companies trading their shares and securities. It is worthwhile to note that most of the blue-chip companies in India are registered both in NSE as well as BSE. NSE has enjoys most of the derivative trading in India and can be rightly said to be having a monopoly over derivative trading. However, both the trading houses are well known for their efficiency in handling trade operations, smoothening work flow and ensuring investor satisfaction through prompt services.
Both the stock exchanges have in their services arbitrageurs who help keep the stock indices from going over the top. The stock prices are monitored through an electronic limit order book which does the matching of transactions that are carried out electronically over the internet. The market orders requested by investors are matched with the best available prices in the electronic order book real time. The trading system also ensures anonymity of the buyers and sellers which further helps in removing bias and irregularities in the trading process. Equity markets follow what is known as T + 2rolling settlement, which implies that a transaction settled on Monday will be realized in cash on Wednesday (T + 2 indicating two days from the transaction date).
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