• • • • • • definition of index stock

8/14/2019 Definition of Index Stock

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Index


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Contents

Definition of index

Stock Market Index

Its formation & history

Their Constituents

Comparison between the them Conclusion


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What is an index?

a numerical scale used to compare variables

with one another or with some reference

number


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Stock Market Index

A statistical indicator providing a representation of

the value of the securities which constitute it.

ORA listing that tracks a group of stocks and their

value. The stocks all have something in common.

They may trade on the same exchange, belong to

the same industry, or be about the same size.


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Indian Stock Market Indexes

In Indian Stock market

mainly two Indexes

exists:

SENSEX

NIFTY


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SENSEX

SENSEX is index of BSE that is Bombay StockExchange.

SENSEX consists of the 30 largest and mostactively traded stocks, representative of varioussectors, on the Bombay Stock Exchange.

If the Sensex goes up, it means that the prices of

the stocks of most of the major companies on theBSE have gone up.

If the Sensex goes down, this tells you that thestock price of most of the major stocks on the BSE

have gone down.


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HISTORY OF

BOMBAY STOCK EXCHANGE

The Bombay Stock Exchange is known as theoldest exchange in Asia.

It traces its history to the 1850s, whenstockbrokers would gather under banyan trees infront of Mumbai's Town Hall.

In 1874, the group moved to Dalal Street.

In 1875, that group became an officialorganization known as 'The Native Share & StockBrokers Association'.


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BSE HISTORY cont.

In 1956, the BSE became the first stock exchangeto be recognized by the Indian Government under

the Securities Contracts Regulation Act.

In 1986 launched its FIRST STOCK

INDEX named SENSEX with

base year 1978-79.

It accounts for 75% of listed capital & 75%

of shares in terms of market capitalization.

Its turnover is 1/3rd of the total turnover in

securities in India.


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STRUCTURE OF BSE

BSE has,

-A Board of 9 Directors

-An Executive director

-3 Govt. nominees

-an RBI nominee

-5 Public Representative An Executive director is responsible for day 2 day

functioning and administration of stock exchange.


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Constituents of SENSEX


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Calculating SENSEX

It is calculated using the free-float market

capitalization method.

The calculation of Sensex involves dividing

the free-float market capitalisation of 30

companies in the index by a number called

the Index Divisor.


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Table


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Determining Free float Market

Capitalisation and Index Divisor

Free float Market Capitalisation of a company

Market capitalisation of a Company * Free float

factor Index Divisor

Previous Day Free Float Market Capitalisation /Previous Day Sensex Value


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Graph


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NIFTY

NIFTY is index of National Stock

Exchange.

Nifty constitutes of 50 companies and the

change in the Nifty index ( Up or down )

indicate the trend in the majority of the

stocks.


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National Stock Exchange and its

History

The National Stock Exchange of India Limited(NSE), is a Mumbai-based stock exchange.

The NSE's key index is the S&P CNX Nifty,known as the Nifty, an index of fifty major stocksweighted by market capitalisation.

The National Stock Exchange of India waspromoted by leading Financial institutions at thebehest of the Government of India, and wasincorporated in November 1992 as a tax-payingcompany.


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NSE Contd.

In April 1993, it was recognized as a stockexchange under the Securities Contracts(Regulation) Act, 1956.

NSE commenced operations in the WholesaleDebt Market (WDM) segment in June 1994.

The Capital Market (Equities) segment of the NSE

commenced operations in November 1994 And operations in the Derivatives segment

commenced in June 2000.


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Constituents of Nifty

ABB Ltd.,ELECTRICAL EQUIPMENT,ABB,EQ,INE117A01022

ACC Ltd.,CEMENT AND CEMENT PRODUCTS,ACC,EQ,INE012A01025

Ambuja Cements Ltd.,CEMENT AND CEMENT PRODUCTS,AMBUJACEM,EQ,INE079A01024

Axis Bank Ltd.,BANKS,AXISBANK,EQ,INE238A01026

Bharat Heavy Electricals Ltd.,ELECTRICAL EQUIPMENT,BHEL,EQ,INE257A01018

Bharat Petroleum Corporation Ltd.,REFINERIES,BPCL,EQ,INE029A01011 Bharti Airtel Ltd.,TELECOMMUNICATION - SERVICES,BHARTIARTL,EQ,INE397D01016

Cairn India Ltd.,OIL EXPLORATION/PRODUCTION,CAIRN,EQ,INE910H01017

Cipla Ltd.,PHARMACEUTICALS,CIPLA,EQ,INE059A01026

DLF Ltd.,CONSTRUCTION,DLF,EQ,INE271C01023

GAIL (India) Ltd.,GAS,GAIL,EQ,INE129A01019

Grasim Industries Ltd.,CEMENT AND CEMENT PRODUCTS,GRASIM,EQ,INE047A01013

HCL Technologies Ltd.,COMPUTERS - SOFTWARE,HCLTECH,EQ,INE860A01027

HDFC Bank Ltd.,BANKS,HDFCBANK,EQ,INE040A01018

Hero Honda Motors Ltd.,AUTOMOBILES - 2 AND 3

WHEELERS,HEROHONDA,EQ,INE158A01026

Hindalco Industries Ltd.,ALUMINIUM,HINDALCO,EQ,INE038A01020

Hindustan Unilever Ltd.,DIVERSIFIED,HINDUNILVR,EQ,INE030A01027

Housing Development Finance Corporation Ltd.,FINANCE - HOUSING,HDFC,EQ,INE001A01028

I T C Ltd.,CIGARETTES,ITC,EQ,INE154A01025

ICICI Bank Ltd.,BANKS,ICICIBANK,EQ,INE090A01013

Idea Cellular Ltd.,TELECOMMUNICATION - SERVICES,IDEA,EQ,INE669E01016


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Constituents Contd. Infosys Technologies Ltd.,COMPUTERS - SOFTWARE,INFOSYSTCH,EQ,INE009A01021

Jindal Steel & Power Ltd.,STEEL AND STEEL PRODUCTS,JINDALSTEL,EQ,INE749A01030

Larsen & Toubro Ltd.,ENGINEERING,LT,EQ,INE018A01030

Mahindra & Mahindra Ltd.,AUTOMOBILES - 4 WHEELERS,M&M,EQ,INE101A01018 Maruti Suzuki India Ltd.,AUTOMOBILES - 4 WHEELERS,MARUTI,EQ,INE585B01010

NTPC Ltd.,POWER,NTPC,EQ,INE733E01010

National Aluminium Co. Ltd.,ALUMINIUM,NATIONALUM,EQ,INE139A01026

Oil & Natural Gas Corporation Ltd.,OIL EXPLORATION/PRODUCTION,ONGC,EQ,INE213A01011

Power Grid Corporation of India Ltd.,POWER,POWERGRID,EQ,INE752E01010

Punjab National Bank,BANKS,PNB,EQ,INE160A01014

Ranbaxy Laboratories Ltd.,PHARMACEUTICALS,RANBAXY,EQ,INE015A01028

Reliance Capital Ltd.,FINANCE,RELCAPITAL,EQ,INE013A01015 Reliance Communications Ltd.,TELECOMMUNICATION - SERVICES,RCOM,EQ,INE330H01018

Reliance Industries Ltd.,REFINERIES,RELIANCE,EQ,INE002A01018

Reliance Infrastructure Ltd.,POWER,RELINFRA,EQ,INE036A01016

Reliance Power Ltd.,POWER,RPOWER,EQ,INE614G01033

Siemens Ltd.,ELECTRICAL EQUIPMENT,SIEMENS,EQ,INE003A01024

State Bank of India,BANKS,SBIN,EQ,INE062A01012

Steel Authority of India Ltd.,STEEL AND STEEL PRODUCTS,SAIL,EQ,INE114A01011

Sterlite Industries (India) Ltd.,METALS,STER,EQ,INE268A01031 Sun Pharmaceutical Industries Ltd.,PHARMACEUTICALS,SUNPHARMA,EQ,INE044A01028

Suzlon Energy Ltd.,ELECTRICAL EQUIPMENT,SUZLON,EQ,INE040H01021

Tata Communications Ltd.,TELECOMMUNICATION - SERVICES,TATACOMM,EQ,INE151A01013

Tata Consultancy Services Ltd.,COMPUTERS - SOFTWARE,TCS,EQ,INE467B01029

Tata Motors Ltd.,AUTOMOBILES - 4 WHEELERS,TATAMOTORS,EQ,INE155A01014

Tata Power Co. Ltd.,POWER,TATAPOWER,EQ,INE245A01013

Tata Steel Ltd.,STEEL AND STEEL PRODUCTS,TATASTEEL,EQ,INE081A01012

Unitech Ltd.,CONSTRUCTION,UNITECH,EQ,INE694A01020

Wipro Ltd.,COMPUTERS - SOFTWARE,WIPRO,EQ,INE075A01022


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Constituents Contd. Infosys Technologies Ltd.,COMPUTERS - SOFTWARE,INFOSYSTCH,EQ,INE009A01021

Jindal Steel & Power Ltd.,STEEL AND STEEL PRODUCTS,JINDALSTEL,EQ,INE749A01030

Larsen & Toubro Ltd.,ENGINEERING,LT,EQ,INE018A01030

Mahindra & Mahindra Ltd.,AUTOMOBILES - 4 WHEELERS,M&M,EQ,INE101A01018 Maruti Suzuki India Ltd.,AUTOMOBILES - 4 WHEELERS,MARUTI,EQ,INE585B01010

NTPC Ltd.,POWER,NTPC,EQ,INE733E01010

National Aluminium Co. Ltd.,ALUMINIUM,NATIONALUM,EQ,INE139A01026

Oil & Natural Gas Corporation Ltd.,OIL EXPLORATION/PRODUCTION,ONGC,EQ,INE213A01011

Power Grid Corporation of India Ltd.,POWER,POWERGRID,EQ,INE752E01010

Punjab National Bank,BANKS,PNB,EQ,INE160A01014

Ranbaxy Laboratories Ltd.,PHARMACEUTICALS,RANBAXY,EQ,INE015A01028

Reliance Capital Ltd.,FINANCE,RELCAPITAL,EQ,INE013A01015 Reliance Communications Ltd.,TELECOMMUNICATION - SERVICES,RCOM,EQ,INE330H01018

Reliance Industries Ltd.,REFINERIES,RELIANCE,EQ,INE002A01018

Reliance Infrastructure Ltd.,POWER,RELINFRA,EQ,INE036A01016

Reliance Power Ltd.,POWER,RPOWER,EQ,INE614G01033

Siemens Ltd.,ELECTRICAL EQUIPMENT,SIEMENS,EQ,INE003A01024

State Bank of India,BANKS,SBIN,EQ,INE062A01012

Steel Authority of India Ltd.,STEEL AND STEEL PRODUCTS,SAIL,EQ,INE114A01011

Sterlite Industries (India) Ltd.,METALS,STER,EQ,INE268A01031 Sun Pharmaceutical Industries Ltd.,PHARMACEUTICALS,SUNPHARMA,EQ,INE044A01028

Suzlon Energy Ltd.,ELECTRICAL EQUIPMENT,SUZLON,EQ,INE040H01021

Tata Communications Ltd.,TELECOMMUNICATION - SERVICES,TATACOMM,EQ,INE151A01013

Tata Consultancy Services Ltd.,COMPUTERS - SOFTWARE,TCS,EQ,INE467B01029

Tata Motors Ltd.,AUTOMOBILES - 4 WHEELERS,TATAMOTORS,EQ,INE155A01014

Tata Power Co. Ltd.,POWER,TATAPOWER,EQ,INE245A01013

Tata Steel Ltd.,STEEL AND STEEL PRODUCTS,TATASTEEL,EQ,INE081A01012

Unitech Ltd.,CONSTRUCTION,UNITECH,EQ,INE694A01020

Wipro Ltd.,COMPUTERS - SOFTWARE,WIPRO,EQ,INE075A01022


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Difference b/t NSE & BSE?

Superior Technology.

More transparent market place.

NSE is a corporate body.

Promotes the growth of human capital.

Innovative approach of trading.

Regular inspection and investigation.

Proper risk management system.


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CONCLUSION

• • • • • • definition of index stock

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