17-09-2012, 11:23 AM
Study of Fluctuations of Indian Stock Market
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Research
Research is defined as human activity based on intellectual application in the investigation
of matter. The primary purpose for applied research is discovering, interpreting, and
the development of methods and systems for the advancement of human knowledge on a wide
variety of scientific matters of our world and the universe. Research can use the scientific
method, but need not do so. Scientific research relies on the application of the scientific method,
a harnessing of curiosity. This research provides scientific information and theories for the
explanation of the nature and the properties of the world around us. It makes practical
applications possible. Scientific research is funded by public authorities, by charitable
organizations and by private groups, including many companies. Scientific research can be
subdivided into different classifications according to their academic and application disciplines.
DESCRIPTIVE RESEARCH
Descriptive research is used to obtain information concerning the current status of the
phenomena to describe "what exists" with respect to variables or conditions in a situation. The
methods involved range from the survey which describes the status quo, the correlation study
which investigates the relationship between variables, to developmental studies which seek to
determine changes over time.
Descriptive research can be of two types:
i. Quantitative descriptive research emphasizes on what is, and makes use of quantitative
methods to describe, record, analyze and interpret the present conditions.
Qualitative descriptive research also emphasizes on what is, but makes use of non-quantitative
research methods in describing the conditions of the present.
Core study
Stock market
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.
The size of the world stock market was estimated at about $36.6 trillion US at the beginning of
October 2008 . The total world derivatives market has been estimated at about $791 trillion face
or nominal value, 11 times the size of the entire world economy. The value of the derivatives
market, because it is stated in terms of notional values, cannot be directly compared to a stock or
a fixed income security, which traditionally refers to an actual value. Moreover, the vast majority
of derivatives 'cancel' each other out (i.e., a derivative 'bet' on an event occurring is offset by a
comparable derivative 'bet' on the event not occurring.). Many such relatively illiquid securities
are valued as marked to model, rather than an actual market price.)
The stocks are listed and traded on stock exchanges which are entities a corporation or mutual
organization specialized in the business of bringing buyers and sellers of the organizations to a
listing of stocks and securities together. The stock market in the United States includes the
trading of all securities listed on the NYSE, the NASDAQ, the Amex, as well as on the many
regional exchanges, e.g. OTCBB and Pink Sheets. European examples of stock exchanges
include the London Stock Exchange, the Deutsche Börse and the Paris Bourse, now part of
Euronext.
Relation of the stock market to the modern financial system
The financial system in most western countries has undergone a remarkable transformation. One
feature of this development is disintermediation. A portion of the funds involved in saving and
financing flows directly to the financial markets instead of being routed via the traditional bank
lending and deposit operations. The general public's heightened interest in investing in the stock
market, either directly or through mutual funds, has been an important component of this
process. Statistics show that in recent decades shares have made up an increasingly large
proportion of households' financial assets in many countries. In the 1970s, in Sweden, deposit
accounts and other very liquid assets with little risk made up almost 60 percent of households'
financial wealth, compared to less than 20 percent in the 2000s. The major part of this
adjustment in financial portfolios has gone directly to shares but a good deal now takes the form
of various kinds of institutional investment for groups of individuals, e.g., pension funds, mutual
funds, hedge funds, insurance investment of premiums, etc.
Stock exchange
A stock exchange, (formerly a securities exchange) is a corporation or mutual organization
which provides "trading" facilities for stock brokers and traders, to trade stocks and other
securities. Stock exchanges also provide facilities for the issue and redemption of securities as
well as other financial instruments and capital events including the payment of income and
dividends. The securities traded on a stock exchange include: shares issued by companies, unit
trusts, derivatives, pooled investment products and bonds. To be able to trade a security on a
certain stock exchange, it has to be listed there. Usually there is a central location at least for
recordkeeping, but trade is less and less linked to such a physical place, as modern markets are
electronic networks, which gives them advantages of speed and cost of transactions. Trade on an
exchange is by members only. The initial offering of stocks and bonds to investors is by
definition done in the primary market and subsequent trading is done in the secondary market. A
stock exchange is often the most important component of a stock market. Supply and demand in
stock markets is driven by various factors which, as in all free markets, affect the price of stocks
(see stock valuation).
Bombay Stock Exchange
Bombay Stock Exchange is the oldest stock exchange in Asia with a rich heritage, now spanning
three centuries in its 133 years of existence. What is now popularly known as BSE was
established as "The Native Share & Stock Brokers' Association" in 1875.
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 1956. BSE's
pivotal and pre-eminent role in the development of the Indian capital market is widely
recognized. It migrated from the open outcry system to an online screen-based order driven
trading system in 1995. Earlier an Association Of Persons (AOP), BSE is now a corporatised
and demutualised entity incorporated under the provisions of the Companies Act, 1956, pursuant
to the BSE (Corporatisation and Demutualisation) Scheme, 2005 notified by the Securities and
Exchange Board of India (SEBI). With demutualisation, BSE has two of world's best exchanges