Introduction Pro

8/12/2019 Introduction Pro

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Introduction :

Stock Market In India

The Indian security market has become one of the most dynamic and efficient security

markets in Asia today. The Indian market now conforms to International Standards in terms

of operating efficiency. During the latter half of 19th century, shares of companies used to be

floated in India occasionally. There were share brokers in Bombay who assisted in the

floatation of shares of companies. A small group of stock brokers in Bombay joined together

in 1875 to form an association called Native Share & Stockbrokers Association. The

association drew up codes of conduct for brokerage business and mobilizes private funds for

investment in the corporate sector. It was this association which later became the Bombay

Stock Exchange, Mumbai or BSE Later on in 1894 the brokers of Ahmedabad formed the

Ahmedabad Stock Exchange, the second stock exchange of the country. During the 1900s

Kolkata became another major center of share trading and as a result Kolkata Stock Exchange

was formed in 1908. Later on Chennai Stock Exchange was started in 1920. However, by

1923, it ceased to exist. Then the Madras Stock Exchange was started in 1937. Three more

stock exchanges were established before independence, at Indore in 1930, at Hyderabad in

1943 and at Delhi in 1947. Thus along with the increase in number of stock exchanges, the

number of listed companies and the capital of listed companies grown tremendously after

1985 which results into growth and development of stock market in India.

About NSE And NIFTY 50

The National Stock Exchange of India Limited (NSE) is a Mumbai-based stock exchange. It

is the largest stock exchange in India in terms of daily turnover and number of trades, for

both equities and derivative trading. Though a number of other exchanges exist, NSE and the

Bombay Stock Exchange are the two most significant stock exchanges in India and between

them are responsible for the vast majority of share transactions. The NSE's key index is the

S&P CNX Nifty, known as the Nifty, an index of fifty major stocks weighted by market

capitalization.

The Nifty is a well diversified 50 stock index accounting for 22 sectors of the economy. It is

used for a variety of purposes such as benchmarking fund portfolios, index based derivatives

and index funds. Nifty is owned and managed by India Index Services and Products Ltd.

The Nifty Index represents about 68.99% of the free float market capitalization of the stocks

listed on NSE as on December 31, 2013. The total traded value for the last six months endingDecember 2013 of all index constituents is approximately 59.01% of the traded value of all


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stocks on the NSE.Impact cost of the Nifty for a portfolio size of Rs.50 lakhs is 0.06% for the

month December 2013. Nifty is professionally maintained and is ideal for derivatives trading.

NSE is mutually-owned by a set of leading financial institutions, banks, insurance companies

and other financial intermediaries in India but its ownership and management operate as

separate entities. There are at least 2 foreign investors NYSE Euro next and Goldman Sachs

who have taken a stake in the NSE. As of 2006, the NSE VSAT terminals, 2799 in total,

cover more than 1500 cities across India. In October 2007, the equity market capitalization of

the companies listed on the NSE was US$ 1.46 trillion, making it the second largest stock

exchange in South Asia. NSE is the third largest Stock Exchange in the world in terms of the

number of trades in equities. It is the second fastest growing stock exchange in the world with

a recorded growth of 16.6%. It is used for a variety of purposes such as benchmarking fund

portfolios, index based derivatives and index funds. There are seven major Indices in NSE

and fifteen sector specific Indices. CNX BANK INDEX or BANK NIFTY is the index which

has 17 banks listed on it an d is a separate index to look upon price movements of banks

share prices. A brief account of the same is given below.

CNX Bank Index

The Indian banking Industry has been undergoing major changes, reflecting a number of

underlying developments. Advancement in communication and information technology has

facilitated growth in internet-banking, ATM Network, Electronic transfer of funds and quick

dissemination of information. Structural reforms in the banking sector have improved the

health of the banking sector. The reforms recently introduced include the enactment of the

Securitization Act to step up loan recoveries, establishment of asset reconstruction

companies, initiatives on improving recoveries from Non-performing Assets (NPAs) and

change in the basis of income recognition has raised transparency and efficiency in the

banking system. Spurt in treasury income and improvement in loan recoveries has helped

Indian Banks to record better profitability. In order to have a good benchmark of the Indian banking sector, India Index Service and Product Limited (IISL) has developed the CNX Bank

Index. CNX Bank Index is an index comprised of the most liquid and large capitalized Indian

Banking stocks. It provides investors and market intermediaries with a benchmark that

captures the capital market performance of Indian Banks. The index will have 12 stocks from

the banking sector which trade on the National Stock Exchange. The average total traded

value for the last six months of CNX Bank Index stocks is approximately 95.85% of the

traded value of the banking sector. CNX Bank Index stocks represent about 89.06% of thetotal market capitalization of the banking sector as on June 28, 2013. he total traded value for


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the last six months ending June 2013 of all the Index constituents is approximately 15.55% of

the traded value of all stocks on the NSE and 84.49% of the traded value of the stocks

forming part of the Banking sector universe.

w.a , mean, sd, variance , correlation

Analysis

Date Nifty

index

AxisBankLtd.

BankofBaroda

HDFCBankLtd.

ICICIBankLtd.

IndusIndBankLtd.

KotakMahindraBank Ltd.

PunjabNationalBank

StateBank ofIndia

1177--FFEEBB--1144 66007733..33 11,,111155..2255 553333..0055 665500..4400 11,,000099..1155 338811..7755 665500..7755 553322..4455 11447733 ..66

1188--FFEEBB--1144 66112277..11 11,,116655..4400 553333..0055 666600..4400 11,,003377..8800 338899..2200 668800..3300 554433 11550000 ..9955

1199--FFEEBB--1144 66115522..7755 11,,116666..1155 553311..5500 667700..0055 11,,003300..9900 339922..9900 668855..9900 554400..6655 11550088 ..0055

2200--FFEEBB--1144 66009911..4455 11,,115577..8855 551133..8800 666622..7755 11,,000077..8855 338844..5500 666699..7755 553311..22 11448800 ..66

2211--FFEEBB--1144 66115555..4455 11,,119933..3355 551188..0000 666622..7755 11,,002255..3300 339922..0055 667722..0055 553355 11550022 ..11

2244--FFEEBB--1144 66118866..11 11,,223388..2200 552277..7755 667711..0000 11,,003366..2200 339999..1100 667777..6600 553399..1155 11551100 ..55

2255--FFEEBB--1144 66220000..0055 11,,223366..7755 553377..2255 667711..1100 11,,003311..1100 440022..6655 667777..6600 553388 11550066

2266--FFEEBB--1144 66223388..88 11,,223399..2255 553388..3355 667777..4400 11,,003366..4455 339955..8800 667777..6600 554433..0055 11552200 ..44

2288--FFEEBB--1144 66227766..99 11,,226677..0055 555511..1155 666699..6600 11,,004433..8855 339977..5500 667777..6600 555522..22 11553333 ..2255

0033--MMAAR R --1144 66222211..4455 11,,225555..5500 554455..9955 666666..2200 11,,002299..8800 339922..2255 666699..9955 553399..88 11551188 ..3355

0

1000

2000

3000

4000

5000

6000

7000

1 7 / F e b / 1 4

1 8 / F e b / 1 4

1 9 / F e b / 1 4

2 0 / F e b / 1 4

2 1 / F e b / 1 4

2 2 / F e b / 1 4

2 3 / F e b / 1 4

2 4 / F e b / 1 4

2 5 / F e b / 1 4

2 6 / F e b / 1 4

2 7 / F e b / 1 4

2 8 / F e b / 1 4

0 1 / M a r / 1 4

0 2 / M a r / 1 4

0 3 / M a r / 1 4

Nifty index

Axis Bank Ltd.

Bank of Baroda

HDFC Bank Ltd.

ICICI Bank Ltd.

IndusInd BankLtd.Kotak MahindraBank LtdPunjab NationalBankState Bank of India


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