The Stock Market for beginner can be complex, but if you learn their basic, it seems very simple. When you buy a share or a stock, you own a small stake of a company. Over time, the value of shares can go up or down. The stock market performance and influenced by many factors like: Economic factor, company performance, Investor sentiment etc.
1. What Is the Stock Market? Simple Meaning Explained :
The stock market is a place where [ Retail Investor (Individual), Domestic Investors (DII), Foreign Investors (FII) and stockbroker etc. ] types of investors buy or sell the stock of public listed company from stock exchanges. Some people buy stock for short term duration we called them Trader and some buy it for long term growth and investment purpose we called them Investor. Through investment for long term purpose, the investor has opportunity to grow their wealth. Stock Market for beginners can be a helpful topic to explore for those new to investing.
2. What Is a Stock Exchange? Simple Meaning (NSE and BSE Explained)
As a stock market beginner, you should know what is In stock exchanges. In India, there are two big stock exchanges where people buy or sell their stocks.
1. NSE (National Stock Exchange) is India’s largest and leading stock exchange, where public listed companies are listed for public to invest or trade. The National Stock Exchange has more than 2000 companies listed on NSE. The NSE main index is Nifty 50. Which is top 50 public listed companies of India by their Market Cap listed on Nation Stock Exchange. These companies represent multiple sector of Indian economy, some examples – Banking sector, IT Sector, Pharma Sector, Auto Sector and FMCG sector etc.
2. BSE (Bombay Stock Exchange) is another stock exchange of India. It is older than NSE. Bombay Stock Exchange has more than 4000 companies listed. The BSE main index is Sensex. It is the same as Nation Stock Exchange. But it represents India top 30 companies only, these also has multiple sectors like NSE. The NSE was the competitors of BSE.
The both exchange was regulated by Securities and Exchange Board of India (SEBI). SEBI is government body and if there was any misbehaving and fraud activity found by SEBI the SEBI has power to sent show cause notice, Penalties etc.
3. How Does a Stock Exchange Operate?
The stock market exchanges play a crucial role in the economy by providing liquidity to investors, enabling price, and offering companies a way to raise capital for growth and expansion. The stock exchanges play a major role for listing the new companies in stock market. When companies are looking to raise capital, they go to stock exchanges to issue shares to the public through Initial Public Offerings. The first time a company issues its shares to the public and raises capital through an exchange is called an Initial Public Offering (IPOs). With this fund from investors to allow them to expand their business, pay debts, and invest in new projects, etc.
Here are some most important operation done by Stock Exchange:
- Listing and IPO (Initial Public Offering)
- Indices (NIFTY50, SENSEX)
- Providing Liquidity
- Clearing and settlement
- Trading Hours
- Technology and Infrastructure
4. What Are Sensex and Nifty? Stock Market Indices Explained:
Nifty50 and Sensex the both are indices of Indian Stock Market.
NIFTY – Nifty, known as Nifty50. Nifty50 has the top 50 companies from different sector by their market cap listed on National Stock Exchange (NSE). Nifty 50 established in 1996. The Nifty 50 provides a broader view of the market compared to the Sensex.
Sensex – Sensex is the top 30 companies listed on Bombay Stock Exchange (BSE). They represent the economy of India. If the Nifty and Sensex go up we can say the Indian economy is growing, and same if the Nifty and Sensex are going down we can say the Indian Economy is in down and in recession. Sensex is established in 1996.
Difference
Nifty and Sensex are the most essential indices for Indian stock market. Sensex gives us information about only 30 large cap companies, but the Nifty Index gives us information about the top 50 companies and provide broader view to the investors. Here are some difference between NIFTY & SENSEX -:
| Aspect | Sensex | Nifty |
| Exchange | Bombay Stock Exchange (BSE) | National Stock Exchange (NSE) |
| Number of Companies | 30 | 50 |
| Establishment | 1986 | 1996 |
| Coverage | Narrow Market View | Broad Market View |
5. Conclusion
The stock market for beginners may seem challenging for beginners, but with a good understanding of the basics, it becomes simple day by day, with some experience you will understand how the market operates. If you want to learn it very fast, so you have to start from today. As every step you take now builds valuable experience for the future, that experience will open doors to opportunities for wealth creation. Remember, consistent learning and patience is very important. The journey may be long, but with dedication, you’ll be well-far ahead from normal people in investing and wealth creation.
I think my blog help you with some basic topic about stock market. If you have more additional information about and If you think I have missed something important, you can Contact us and also comment below so that we can improve my blog.
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