Stock Market Indices

Presented By:Priti Kopade M-3023Bhagyashree Powale M-3039Ankita Sawant M-3046Nikhat Shaikh M-3048Pranoti Shinde M-3053

ContentsIntroductionBse and Nse Indices

INTRODUCTION:

q A stock market is a public market for the trading of company stock and derivatives at an agreed

; price these are securities listed on a stock exchange as .well as those only traded privately

q

q , A place where shares stocks and bonds are .bought and sold

q

Stock

mark

et??

:STOCK MARKET INDICESStock market indices are the barometer of the stock market.BSE SENSEX,NSE-50 etc are some of the market indices.

Their usefulness: Indices help to recognize broad trends in the market. The investor can use the indices to allocate the funds rationally among the stocks. Technical analysts use these indices to predict the future market. Indices function as a status report on the general economy.

Determinants of a Stock IndexLiquidityDiversificationOptimum SizeMarket CapitalizationAveraging

BOMBAY STOCK EXCHANGE BSE

Bombay Stock Exchange is the oldest stock exchange in Asia with a rich heritage of over 133 years of existence.

BSE is the first stock exchange in the country which obtained permanent recognition (in 1956) from the Government of India under the Securities Contracts (Regulation) Act (SCRA) 1956.

Over the past 133 years, BSE has facilitated the growth of the Indian corporate sector by providing it with cost and time efficient access to resources.

SENSEX (BSE30)The index includes 30 companies which figure

in top 100 in terms of market capitalization and are also among the leaders in their industry groups.

Presently the following are the :constituent companies

, , , . ACC Infosys ICICI Bank Dr , , , Reddy s Lab SBI CIPLA Zee

, , , Telefilms Nestle India RPL, ., , RIL HCL Tech Bajaj Auto, , , BHEL Castrol BSES Colgate

, , , Palmolive Hindalco Grasim, , Glaxo Hero Honda Gujarat , , , Ambuja Cements HLL HPCL

, & , , , ITC L T MTNL Ranbaxy, .TISCO TELCO and Satyam

NATIONAL STOCK EXCHANGE (NSE)

The National Stock Exchange of India (NSE) situated in Mumbai - is the largest and most advanced exchange with 1016 companies listed and 726 trading members.

The NSE is owned by the group of leading financial institutions such as Indian Bank or Life Insurance Corporation of India.

Standard and Poors CRISIL NSE Exchange NIFTYS&P CNX NIFTY is an S&P endorsed Stock Index

owned by the India Index Services Ltd (IISL).It is a highly diversified index, accurately reflecting the

overall market conditions and is composed of 50 liquid stocks.

(NSE, CRISIL and S&P).

Use of Indices

National Stock Exchange Indices

Bombay Stock Exchange Indices

Priti Kopade

- M 3023

6 Signals of stock priceincrease

. 1 RISE IN EARNINGS . If a company earns 100 Rs per share for the

& . . past 2 years its earning are know 120 Rs per share i e % , .a 20 increase consider is increase as positive

, .As the saying goes Earnings drive the market

. 2 INCREASE IN ASSETS AS DEBTS ARE STABLE ORDECREASING

Key to growing the book value of. company Rising book value has a positive impact on market

.value which in turn tend to strive stock price up

. 3 POSITIVE PUBLICITY FOR INDUSTRY

. 4 HEAVY INSIDER OR CORPORATE BUYING

. 5 Powerful Demographics If a company generates lots of profit

from the teenage market and market is going to.expand

. / 6 Low P E Relative to Industry or Market / If the industry P E ratio is 20 and you

/ , are looking at a stock that has a P E of 15 all , . things being equal that great

, The company has room for growth and you have a . good value

The Trend is your

Friend

Driven By The Trust Of Our Customers Driven By The Trust Of Our Customers

HERO HONDA MOTOR LTD INDIA

28

: Type : Public company BSE HEROHONDA M : Founded , January 19 1984

, ,inGurgaon Haryana India : Headquarters ,New Delhi India : Key people ( & Brijmohan Lal Munjal chairman

)founder ( )Toshiaki Nakagawa joint managing director ( )Pawan Munjal CEO : Industry Automotive : Products , Motorcycles Scooters : Revenue . US$ 2 8 billion : Website . .www Herohonda com

*Market capitalisation USD million

- - - - 31 3 1996 31 3 2000 - -31 3 2005

The Hero Honda Group s market capitalization

Change In Price

3 months

1 year

Intra day

n : - . ( . %) : Change 19 20 1 14 Change- . ( . %)30 35 0 19

n : , . : Open 1 675 00 Open, .16 229 27

: , Close 1 671 : , .Close 16 255 97

Compare with BSE

n : Last Trade , . 1 671 00INRn : . ( . %)Change 20 55 1 21

Hero Honda

Price Earning Ratio

BHAGYASHREE S. POWALESYBMS

ROLL NO. M-3039

Definition

Determining Share Prices

Present Value of Growth Opportunities (PVGO)

Other related measures

Two analytical models

EFFECTS OF STOCK MARKET ON INDIAN ECONOMYn Wealth effectnn Effect on pensionnn Investmentnn Raising funds for companies

EFFECT ON COMPANIES

n Difficult to issue share rightsnn Firm is trying to take overnn A collapsing share price is often a reflection

of badly performing firm

STOCK MARKET ON JANUARY 2008

n Already since the start of the year the FTSE-100 has fallen 7%. Yesterday, the stock market fell 3% of 190 points on fears related to the growing credit crunch. In particular, American bank Citibank wrote off $18billion from its mortgage defaults. It hopes this will draw a line under the losses in the derivatives market.

nn Although, mortgage defaults in the UK are not such a problem in

the UK. The UK is been squeezed by the shortage of capital as investors are unwilling to risk purchasing any subprime related debt. This has caused the cost of borrowing to increase, it means that mortgage costs have increased despite the cut in interest rates.

n

FACTORS THAT WILL AFFECT THE STOCK MARKET IN THE CURRENT YEAR

n Slow down in growthnn Cut in interest ratesnn Credit crisisnn

CURRENT BSE INDICESBSE AUTO 6850.00 29.71BANKEX 9583.75 17.08BANKNIFTY 8504.55 8.40CAPITAL GOODS 13165.67 0.97CONSUMER DURABLES

3957.17 52.56BSE FMCG 2746.09 2.64BSE HEALTH CARE

4830.08 31.35BSE IT 5160.63 1.38BSE METALS 16015.03 14.19OIL& GAS 9593.95 0.80BSE PSU 9131.91 11.56BSE TECK 3165.86 8.86BSE SMALL CAP 7994.98 48.92BSE MID CAP 6330.23 26.30

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