Oct
25
2013
By: admin

- Equity market, also known as stock market refers to a market where company shares are traded.
- Equity market participants include individuals, mutual funds, FII etc.
- Generally, shares are traded through a stock exchange.
- Stock exchange is an organized market place where capital market products are traded
- Its main purpose is to assist, regulate and control buying and selling of securities.
- A stock exchange acts as a barometer of economic and business condition of a country.
- Stock exchanges in India are regulated by SEBI, under the SEBI Act, 1992.
- Two leading stock exchanges in India are Bombay Stock Exchange (BSE) and National stock Exchange (NSE).
- Established in 1875, BSE is the oldest exchange in India as well as Asia. NSE was incorporated in 1992.
Phases of Stock Market
- Generally stock market goes through two phases: Bull market phase and Bear market phase.
- Bull Market is a term used to describe the stock market which has rising prices as its main characteristics.
- Bear Market is a term used to describe the stock market which has falling prices as its main feature.
- Indian equity market has witnessed many bull and bear market. However the prominent bull market phase was during 2003 to 2007 and bear market phase was during 2008.
- From the bottom of 2003 towards the end of 2007 bull market, Sensex return was 7 times1.
- Maximum loss in the index during any bear market has been 60%.
- Highest PE2 of Sensex during bull market has been around 26 (April 2000) while lowest Sensex PE during bear market has been around 10 (April 2003).
To read more, Download PDF