An Overview of Indian Stock Market

Welcome to the Indian stock market. There are two types of investors, one who has full knowledge about the Indian share market and other who are fresher in this field. India seems like a small stock market compares to the United State but on closer examination, you will get the exact same things that you expect from any emerging stock market. Here, we are providing the overview of the Indian stock market that will help investors to get in-depth knowledge about the Indian share market.
Bombay Stock Exchange (BSE) and National Stock Exchange (NSE)
Most of the share trading in the stock market is done in two stock exchanges. One is the Bombay Stock Exchange (BSE) and another is National Stock Exchange (NSE). The BSE has existed since 1875. On the other hand, the NSE was established in 1992 and started trading in 1994. Both exchanges BSE and NSE have the same trading pattern. Almost all the important companies and organization of India are listed on both the exchanges.

1. Trading System

Trading in BSE and NSE is done by an open electronic limit order book, in which the order is matched by the computer. There are no experts or market makers and the whole process is order-driven, which means that the orders are placed by the investors, which automatically match the best limit orders. As a result, the buyers and sellers always remain anonymous. The main advantage of the order driven market is that it brings extra transparency by showing all the purchasing and selling orders in the trading system. However, there is no confirmation or guarantee of execution of the orders in the absence of the market makers and specialists.

Indian stock market

2. Settlement Cycle and Trading Hours

The T+2 rolling settlement is followed in equity spot markets. It means that any business or trade that takes place on Monday will be fixed by Wednesday. The trading on the stock exchanges takes place Monday to Friday, between 9:15 am to 3:30 pm, Indian Standard Time (+ 5.5 hours GMT). The delivery of shares should be in dematerialized form and both exchanges have its own clearing house, which serves as the central counterparty and considers all settlement risks.

3. Market Indexes

There are two very famous Indian market indexes named Sensex and Nifty. The Sensex is the largest market index of shares. Another index is the S & P CNX Nifty. This includes shares of 50 firms listed on the NSE, which represent 62% free-float market capitalization of the index. It was built in 1996.

4. Securities Market Regulation

The entire responsibility of the stock market development, supervision and regulation are the Securities and Exchange Board of India (SEBI). The SEBI was formed in 1992 as an independent authority. Since then, Securities and Exchange Board of India (SEBI) has constantly tried to make market rules in line with best market practices. SEBI is well known for imposing the penalty on participants of the market if rules are breached by them.

Top Ten Rules of Investing In Indian Share Market

Indian share market is well-known for the instability. Basically, Indian share market is recognized as the safest place for the investment but these days it has become the most challenging market. Indian share market deals with a range of shares that are available for trading point of view. There are a number of rules about investment in the stock market but I summarized important top ten rules of investing in Indian share market.

Rules of Investing

1. Need a plan

Having a plan is essential before you put any money to work; you need to know what you are investing. You cannot be successful in share market if you do not have a well-researched plan. An effective trading plan or share market tips can help you to be updated with the market change. Investment according to plan is the key to getting high returns on it.

2. Always keep learning

You cannot gain knowledge of trading in a day, few weeks or even in months. Successful traders analysis all the latest research on technological analysis then they find their hands on. They also read numerous books to know trading techniques and about trading psychology. They follow other successful traders to know how they deal with their accounts.

3. Create a big portfolio

There is no doubt; rank of diversification depends on every investor’s risk taking ability. This is the reason; diversification of the portfolio is the key aspect of earning the best return on investments across asset and tool with the least risk.

4. Try to capture the huge market move

Beginner traders frequently book profits too fast because they want to get pleasure from the engaging feeling. A trading account is not increasing that is not sustainable. Therefore, when you consider you have entered into a big move, you have to ride it out until the market stops performing right.

5. Need to avoid overtrading

Overtrading is the prime mistake that most new traders do. A good trader always prepares to trade light as the market turns changing and even not trade if there are no trades to make the profit.

6. Implement disciplined investment approach

Disciplined investment approach in the stock market would help you to come out from stock market fluctuations. Many stock market tips provider follow disciplined investment approach.

7. Have practical expectations

There is nothing wrong with hoping the most profit from your investments although you can face difficulty if your economic goals are based on only idealistic assumptions. Therefore you should have practical expectation from your investment.

8. Take knowledgeable decision

Proper study always should be started before investment in the stock market. Normally, investors go through the name of a company or the group they belong to. So, you need to take the right decision.

9. Search for appropriate online trading broker

There are many online trading brokerage firms for the active and prospective traders. You should choose the proper brokerage firm according to the trading requirements and investment plans.

10. Find the trading software

If you register in the online brokerage firm through paying an amount of money then you will get the access information of trading software for the knowledge. This software assists you in the purchase, sell and track your trades. Ensure to choose a firm that generally helps you understanding the software.