Indian Stock Market

The working of stock exchanges in India started in 1875 BSE is
the oldest stock market in India The history of Indian stock
trading starts with 318 persons taking membership in Native
Share and Stock Brokers Association, which we now know by the
name Bombay Stock Exchange or BSE in short In 1965, BSE got
permanent recognition from the Government of India National
Stock Exchange comes second to BSE in terms of popularity BSE
and NSE represent themselves as synonyms of Indian stock market
The history of Indian stock market is almost the same as the
history of BSE
The 30 stock sensitive index or Sensex was first compiled in
1986 The Sensex is compiled based on the performance of the
stocks of 30 financially sound benchmark companies In 1990 the
BSE crossed the 1000 mark for the first time It crossed 2000,
3000 and 4000 figures in 1992 The reason for such huge surge in
the stock market was the liberal financial policies announced by
the then financial minister Dr Man Mohan Singh
The up-beat mood of the market was suddenly lost with Harshad
Mehta scam It came to public knowledge that Mr Mehta, also
known as the big-bull of Indian stock market diverted huge funds
from banks through fraudulent means He played with 270 million
shares of about 90 companies Millions of small-scale investors
became victims to the fraud as the Sensex fell flat shedding 570
points
To prevent such frauds, the Government formed The Securities and
Exchange Board of India, through an Act in 1992 SEBI is the
statutory body that controls and regulates the functioning of
stock exchanges, brokers, sub-brokers, portfolio managers
investment advisors etc SEBI oblige several rigid measures to
protect the interest of investors Now with the inception of
online trading and daily settlements the chances for a fraud is
nil, says top officials of SEBI
Sensex crossed the 5000 mark in 1999 and the 6000 mark in 2000
The 7000 mark was crossed in June and the 8000 mark on September
8 in 2005 Many foreign institutional investors (FII) are
investing in Indian stock markets on a very large scale The
liberal economic policies pursued by successive Governments
attracted foreign institutional investors to a large scale
Experts now believe the sensex can soar past 14000 mark before
2010
The unpredictable behavior of the market gave it a tag – ‘a
volatile market’ The factors that affected the market in the
past were good monsoon, Bharatiya Janatha Party’s rise to power
etc The result of a cricket match between India and Pakistan
also affected the movements in Indian stock market The National
Democratic Alliance led by BJP, during 2004 public elections
unsuccessfully tried to ride on the market sentiments to power
NDA was voted out of power and the sensex recorded the biggest
fall in a day amidst fears that the Congress-Communist coalition
would stall economic reforms Later prime minister Man Mohan
Singh’s assurance of ‘reforms with a human face’ cast off the
fears and market reacted sharply to touch the highest ever mark
of 8500
India, after United States hosts the largest number of listed
companies Global investors now ardently seek India as their
preferred location for investment Once viewed with skepticism,
stock market now appeals to middle class Indians also Many
Indians working in foreign countries now divert their savings to
stocks This recent phenomenon is the result of opening up of
online trading and diminished interest rates from banks The
stockbrokers based in India are opening offices in different
countries mainly to cater the needs of Non Resident Indians The
time factor also works for the NRIs They can buy or sell stock
online after returning from their work places
The recent incidents that led to growing interest among Indian
middle class are the initial public offers announced by Tata
Consultancy Services, Maruti Udyog Limited, ONGC and big names
like that Good monsoons always raise the market sentiments A
good monsoon means improved agricultural produce and more
spending capacity among rural folk The bullish run of the stock
market can be associated with a steady growth of around 6% in
GDP, the growth of Indian companies to MNCs, large potential of
growth in the fields of telecommunication, mass media,
education, tourism and IT sectors backed by economic reforms
ensure that Indian stock market continues its bull run

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