Share means part. The market is the place where you can buy and sell. In a literal sense, the stock market is a place to buy and sell a stake in a government or private listed company. The company in which an investor buys shares becomes a shareholder in that company. This stake depends on the number of shares purchased. Brokers do the work of buying and selling shares and are the most important link between the company and the shareholders.
There are two exchanges: BSE ie the Bombay Stock Exchange and NSE ie National Stock Exchange in the country on which the shares are traded. BSE and NSE are the largest stock exchanges in India. Most of the companies that are traded on the stock market are listed on both exchanges, but it is possible that a company is listed on only one of these two exchanges.
How can one start investing in the stock market?
First of all, one has to open a Demat account with the help of a broker. After this, the person has to link the Demat account to your bank account. Most of the broker houses also provide you with the facility of online share trading, apart from this one can also place the orders by calling in help desk of the broker. One can transfer funds from the bank account to the Demat account and buy the shares of a company by logging in from the broker’s website or placing an order.
The valuation of the shares of that company is done on the basis of information such as the functioning of a company, mergers, investments, profits, losses, etc. Since the listed company keeps on trading every day and its conditions change every day, based on this valuation, the price of its shares fluctuates due to the decrease and increase in demand.
What are Sensex and Nifty?
Sensex and Nifty are also mentioned repeatedly in the stock market sector which one must have heard. There are mainly 30 big companies listed on BSE. Sensex is determined by the status of these 30 companies. Nifty is the index of NSE and it lists 50 companies from 22 different sectors. The financial status of these 50 companies determines the Nifty index. Apart from the Sensex and the Nifty, there are many indexes, but the most important are two.