Stock Market Indices

Presented By:
Priti Kopade M-3023
Bhagyashree Powale M-3039
Ankita Sawant M-3046
Nikhat Shaikh M-3048
Pranoti Shinde M-3053
Contents
Introduction
Bse and Nse Indices


 INTRODUCTION: t
k
oc ket?
S ar
?

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 MARKET INDICES :
ØStock market indices are the barometer of the stock market.
ØBSE SENSEX,NSE-50 etc are some of the market indices.

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

Optimum Size

Market Capitalization

Averaging
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 Poor’s CRISIL NSE
Exchange NIFTY
S&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 price
increase
 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 OR

DECREASING
 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
HERO HONDA MOTOR LTD
INDIA

Driven By The Trust Of Our Customers

 Type : Public company BSE:HEROHONDA M
 Founded : January 19, 1984
in Gurgaon,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
 28
The Hero Honda Group’s market
capitalization

Market capitalisation *
USD million

31-3-1996 31-3-2000
31-3-2005
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 . 00INR

n Change: 20.55(1.21%) 
Hero Honda
Price Earning Ratio

BHAGYASHREE S. POWALE
SYBMS
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 ECONOMY
n Wealth effect
n
n Effect on pension
n
n Investment
n
n Raising funds for companies
EFFECT ON COMPANIES
n Difficult to issue share rights
n
n Firm is trying to take over
n
n 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.
n
n 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 growth
n
n Cut in interest rates
n
n Credit crisis
n
n
CURRENT BSE INDICES
BSE AUTO 6850.00 29.71
BANKEX 9583.75 17.08
BANKNIFTY 8504.55 8.40
CAPITAL GOODS 13165.67 0.97
CONSUMER 3957.17 52.56
DURABLES
BSE FMCG 2746.09 2.64
BSE HEALTH 4830.08 31.35
BSE
CAREIT 5160.63 1.38
BSE METALS 16015.03 14.19
OIL& GAS 9593.95 0.80
BSE PSU 9131.91 11.56
BSE TECK 3165.86 8.86
BSE SMALL CAP 7994.98 48.92
BSE MID CAP 6330.23 26.30