Basic things you have to know about Stock Market
In this entire blog you can find basic Information about stock Market. Must read and share your opinion about stock market in comment section.
To establish a company a certain amount of capital is required. Capital is the term which refers to the amount required to start a company. This capital is then divided into small equal parts. This small parts is called as shares of the company. Than these shares are sold in the share market to raise the capital.
Basically, when a company needs an amount to run its business but is not willing to acquire loan from bank it sells it’s share in the market. A share is the smallest unit of the capital. This shares are then sold through stock exchange. Stock exchange is a place where buying and selling of shares take place. It is also knows as share market or stock market, equity market or capital market.
There are two main stock exchanges of India : BSE( Bombay Stock Exchange) and NSE(National Stock Exchange). BSE is the oldest stock exchange in Asia while NSE is the India’s largest stock exchange.
The indices of these stock exchanges are SENSEX and NIFTY. SENSEX is the index which shows the performance of BSE and NIFTY for NSE thereof. Sensex represents the index of 30 country’s largest and financially sound companies listed on BSE. Similarly, NIFTY represents the index of 50 companies listed on NSE.
When a person buys a share of the particular company he is than called as a share holder. He then becomes a part owner of the company in the proportion of the number of shares he holds. The value of share as described by its issuers (promoters) i.e the original cost of share is called as Face Value. Likely, the price at which the shares are sold or purchased in stock market is called as Market Value.
The market value of the shares changes frequently in the live market. If the companies performance is better than expected, then those shares are in demand. The number of shares is fixed therefore share supply could not be increased and hence the share prices increases. This is a reason for the increase or decrease in the SENSEX and index.
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