Study of Stock Markets ;The growth story; (A Detailed Study of Stock Market, Growth and Effects)

Study of Stock Markets ;The growth story; (A Detailed Study of Stock Market, Growth and Effects)

SummaryThis project studies the real meaning of stock markets. Which has been derived from a market for another product.This research provides a deep insight about the stock markets of the world and growth story. It gives details about how does the stock markets functions differently in different countries. The research is conducted to know about the growth and downfall in the stock markets the effect of one market on another.The research was conducted over a period and questions were asked to brokerage firms some securities firms and some investments bankers. The secondary source was also used to collect the database of the enterprise. The secondary source was the internet and business newspaper. A stock exchange, share market or bourse is a corporation or mutual organization which provides facilities for stock brokers and traders, to trade company stocks and other securities. Stock exchanges also provide facilities for the issue and redemption of securities as well as other financial instruments and capital events including the payment of income and dividends.The securities traded on a stock exchange include: shares issued by companies, unit trusts and other pooled investment products and bonds. To be able to trade a security on a certain stock exchange, it has to be listed there.Usually there is a central location at least for recordkeeping, but trade is less and less linked to such a physical place, as modern markets are electronic networks, which gives them advantages of speed and cost of transactions. Trade on an exchange is by members only. The initial offering of stocks and bonds to investors is by definition done in the primary market and subsequent trading is done in the secondary market.A stock exchange is often the most important component of a stock market. Supply and demand in stock markets is driven by various factors which, as in all free markets, affect the price of stocks (see stock valuation).At the stock exchange, share prices rise and fall depending, largely, on market forces. Share prices tend to rise or remain stable when companies and the economy in general show signs of stability and growth.After rising rapidly throughout most of the 1990s and into 2000, stock prices, as measured by the Standard and Poor (S&P) 500 Index, declined sharply from late 2000 until early 2003. The decline took away about half of the stock price gains experienced since 1990 and contributed significantly to the 2001 recession and the slow recovery. Since the first quarter of 2003, stock prices have once again been rising, and they are expected to continue to rise throughout the forecast period.StructureThe Exchange has four core areas:Equity marketsTrading servicesMarket data informationDerivativesThe equity brokerage industry in India is one of the oldest in the Asia region. India had an active stock market for about 150 years that played a significant role in developing risk markets as also promoting enterprise and supporting the growth of industry.The Securities and Exchange Board of India (SEBI), which was set up in 1988 as an administrative arrangement, was given statutory powers with the enactment of the SEBI Act, 1992. The broad objectives of the SEBI include* to protect the interests of the investors in securities* to promote the development of securities markets and to regulate the securities marketsFindings to the project were:* The project focused on developing appropriate regulatory framework for derivative trading. * The project was done to check the actual growth in the stock markets of the world * The project of stock markets in phased manner. The main emphasis of the project was on the working of the stock markets in relation to the comparison, effects of international markets on India, the growth of Indian markets in comparison to the world markets.The basic findings were that India was the most growing market in comparison to other marketsMain conclusions:* Indian stock markets are growing at a very fast pace because the growth rate is high people are receiving good returns from the markets.* Fiis today are investing maximum of their money in the Indian stock market.* Growth of the stock markets is rapid all over the world.* Today trading is become very easy you can trade while sitting at your home in any exchange you want.* The role of regulator is very important like SEBI or FED RESERVE to control the prices and to protect the investors* Trading has become more legalized so the no.of frauds have decreased.* Stock exchanges have multiple roles in the economy* Stock markets are very volatile as the price fluctuation is very high you can loose your money very easily.* Many innovations have taken place in the stock markets which is one important reason for growth.* The Indian stock markets are seen scaling stratospheric levels. India is one of the biggest markets for global emerging market funds, and non-dedicated global investors are now likely to drive flows to the Indian markets.* Some risks too A continued global economic slowdown could hit earnings.* Total losses in American credit crisis are $ 1 trillion and worst is yet to come - IMF. * We studied the difference between fundamental analysis, technical analysis and speculation, and we came to know that markets are driven by all these forces.* Despite having a large number of companies listed on its exchanges, India accounted for a meager 0.94% in total world.* The share of US in worldwide market capitalization decreased from 38.85 % as at end-2004 to 35.84 % as at end 2006.* Indian listed companies accounted for 1.51% of total market capitalization in 2006.* The stock market capitalization in mid-2007 is nearly the same size as that of the gross domestic product as compared to about 25 percent of the latter in the early 2000s. Investor base continued to grow from domestic and international markets* During 2006-07, seventy five (75) IPOs were listed on NSE which belonged to various different sectors.