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SENSEX

Sensex is an index; an index is basically an indicator. It gives you a general

idea about whether most of the stocks have gone up or most of the stocks

have gone down. The sensex is an indicator of all the prices of the majorcompanies of the BSE (Bombay stock exchange)

HOW SENSEX IS CALCULATED-

Sensex is calculated using a market- capitalization weighted methodology.

As per this methodology, the level of index at any point of time reflects the

total market value of 30 components stock relative to a base period. (the

market capitalization of accompany is determined by multiplying the price

of its stock by the number of shares issued by the company).

NIFTY:

Nifty is an indicator of all the major companies of NSE. The Nifty index is a

composite of the top 50stockslisted on the National stock exchange. It is a

simplified tool which helps investors & ordinary people alike, understand

what happens in the stock market & by extension, the economy.

BOMBAY STOCK EXCHANGE-

The BSE or Bombay stock exchange sensitive Index is a value weighted

index. Composed of 30stocks with the base April 1979=100.

It consists of the 30largest and most actively traded stocks, representative of

various sectors, on the BSE.

These companies account for around one fifth of the market capitalization of

the BSE.

The abbreviated from sensex was coined by Deepak mohoni around1990while writing market analysis columns for some business news paper.

The index has increased by over13 times from June 1990 to today. using

information from April 1979 onwards the long run rate of return on the BSE

sensex can be estimated to be 0.52%per week(continuously compounded)

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with a standard deviation of 3.67%.thistranslates to 27%per annum, which

translate to roughly 18% pa after compensating for inflation

NATIONAL STOCK EXCHANGE

The NSE of India limited was created on the basis of the report of the high

powered study group on establishment of new stock exchanger, which

recommended promotion of NSE by financial institution to provide access to

investors from all across the country on an equal footing.

In 1992, NSE was incorporated as a tax paying company unlike other stock

exchange in the country.

In April 1993, NSE was recognized as a stock exchange under the securities

contract(regulation) act,1956.

The capital market (equities) segment commenced operation Nov. 1994and

operations in derivatives segment were started in June 2000.

NSE launched s & p CNX NIFTY in April 1996.NSE is one largest

interactive VSAT based stock exchange in the world. Presently it supports

3000 VSATS

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OBJECTIVE OF SENSEX

To measure market movements

Benchmark for funds performance

For index based derivatives products

OBJECTIVE OF NSE

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Establishing nationwide trading facilities for all types of securities .

Ensuring equal access to investors all over the country through an

appropriate telecommunication network.

Providing fair , efficient & transparent securities market using electronic

trading system.

Meeting international benchmark and standards.

MELT DOWN OF SHARE MARKETInflation in India is high, this will make production cost high and net profit

down of companies .

Unstable political condition Left parties threatening to withdraw support to

the government and this cause a re-election and instability due to nuclear

deal.

International fuel price-Increasing fuel price is another reason for fall, this

cause production cost high for companies.

Slow down US growth, due to this many US investors withdraw their money

from Indian market.

CONCLUSION

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In the ending of year 2007 , the sensex was increased very high. It reached at

point 17000 on Sep. 2007. i.e rising of sensex was to heavy investment of

the foreign investors in Indian market.

In the Jan. 2008 , sensex reached up to 21000 marks.

But after that the sensex is going down very quickly because present time

there is no investment in the Indian market by foreign investors .

BSE & NIFTY also shows that sensex is falling down.

On the other hand this fall down of sensex is best opportunity for the

investors so that in future when the sensex rise then the investors will get

maximum profit.