Niki Project

Analytical study of volatility of securities traded on BSE SENSEX

INTRODUCTION:

Stock prices are changed every day by the market. Buyers and sellers cause prices to change as

they decide how valuable each stock is. Basically, share prices change because of supply and

demand. If more people want to buy a stock than sell it - the price moves up. Conversely, if more

people want to sell a stock, there would be more supply (sellers) than demand (buyers) - the price

would start to fall. Volatility in the stock return is an integral part of stock market with the

alternating bull and bear phases. In the bullish market, the share prices soar high and in the

bearish market share prices fall down and these ups and downs determine the return and

volatility of the stock market. Volatility is a symptom of a highly liquid stock market. Pricing of

securities depends on volatility of each asset. An increase in stock market volatility brings a large

stock price change of advances or declines. Investors interpret a raise in stock market volatility

as an increase in the risk of equity investment and consequently they shift their funds to less

risky assets. It has an impact on business investment spending and economic growth through a

number of channels. Changes in local or global economic and political environment influence the

share price movements and show the state of stock market to the general public. The issues of

return and volatility have become increasingly important in recent times to the Indian investors,

regulators, brokers, policy makers, dealers and researchers with the increase in the FIIs

investment.

Statement of the problem:

The Indians securities market has always witnessed fluctuations, especially

Bombay Stock Exchange (BSE) Sensex have more volatility than the securities traded on the

NSE. The study attempts identify the volatility of securities listed in Bombay Stock

Exchange with special reference to 30 Sensex stocks. Moreover this study helps the potential

investors make better investment decision based on calculated beta of 30 shares listed in Bombay

Stock Exchange (BSE) Sensex.

Need and importance of study

The stock market in India existed for a well over a century. Now its importance in the

mobilization, allocation and efficient use of scare investment resources has not been recognized

until the last decade. During the last decade both secondary and primary markets have witnessed

phenomenal qualitative and quantitative developments. One of the important characteristics of

well functioning stock market is the stability of prices of securities traded on it, which is price

volatility. Volatility of securities price has important implications for firm’s investment and

financial decisions, valuations and investors sentiments. Price volatility of securities has

consequence for firm’s decisions on how much capital to issue, type of instrument to be used

when to use. Further high price volatility provides opportunities for expropriations between

various market players.

Therefore, the study of volatility of securities is very important contextual as well.

Here analytical study of volatility of securities traded on Bombay Stock Exchange is the topic of

this dissertation.

Objective of the study

To study the volatility of securities listed in Bombay Stock Exchange (BSE).

To find out the various factors which are responsible for volatility.

To furnish institutional material relevant for understanding the environment in which

stock market fluctuation are occurring.

To suggest better investment decision based on the calculated Beta of the selected

companies

Methodology

It covers the type of research used in the dissertation, sample size chosen, sample description,

data collection. Each will be described separately under the following headings.

Actual collection of data

Basically, the data used in this dissertation are secondary in nature, which appeared in Economic

Times and Business line and from the web site of Bombay Stock Exchange. Past three months

(from March to May) daily closing price of all the stock of companies listed in Bombay Stock

Exchange Sensex has been used in this dissertation have been used to test the applicability of

Beta, Standard Deviation, alpha and Coefficient of Correlation, which are used to measure

volatility of shares.

Population Size

For the study 30 companies have been selected. All the companies are the major players in the

economy and are part of sensex.

Sample technique

The current study requires no sampling techniques. All the 30 companies in the Bombay Stock

Exchange Sensex which appear from March to May are selected.

PRESENTATION OF THE DATA

The collected data is analyzed and is represented through various charts, graphs, pie charts.

SCOPE:

5.1 This study can be used by investors, traders and other professionals as a supplement to their

own research.

5.2 This study can be used to individual who are at initial stage of investment in stock market.

5.3 To different Organization who provides tips for Buying and Selling shares.

5.4 To review market forecast provided by the organization about fluctuation in the market.

Limitation of the study The most important limitation of this study is that it considers only Sensex Companies

listed in Bombay Stock Exchange. Only three months duration has been taken for the study from March 2011to May 2011.

Introduction

Volatility in investing is a stock's ability to change. Stocks with high volatility are those that can easily change in price (greatly and quickly), meaning that they are easily affected. Securities with lower volatility are more resistant to change, and they tend to have a stable course. With great potential for return, volatile stock is also accompanied by much risk. Generally, securities that trade with volatility often fluctuate greatly over short periods of time, as it takes very little to affect the prices of these shares. When the price jumps up and down, short-term trading opportunities that allow investors to buy during dips and sell when price bounces up arise.

Factors responsible for price fluctuationsIn a securities market, prices or return show fluctuation for a variety of reasons: changes in fundamental factors of firms, like, investors endowment, tastes or alternatively the attitude towards risk, correct or incorrect anticipations or expectation of investor and other participants, differences in information and mode of evaluation, transient imbalance between demand and supply of securities, and the nature and number of stabilizing forces, among others, cause prices to fluctuate either from one point of equilibrium to another or above and below an equilibrium point.

The changes in fundamental factors cause price or returns to shift from one point of equilibrium to another. For instance, information regarding changes in the economy,\ changes in policies, including industrial policy, as also the political situation, and the social situation, influence the overall price behavior of a market.

Apart from fundamental factors, the transitory imbalances between demand and supply for securities may also cause price fluctuations. For instance, in the absence of stabilizing forces, excess supply (demand) of securities in the short-run cause price to fall (rise). In the presence of stabilizing forces, such as traditional speculators and value based investors, the extent of fluctuations tend to be small, as these stabilizing forces act as buyers (sellers), when there is excess of supply (demand), thus, arresting the magnitude of a fall (rise) in the price. However, the stabilizing forces may not completely mitigate the price change; as such act may not bestow any benefit on them. These forces require a minimum extent of price change in order to undertake the act of stabilizing of prices, which would give then scope to earn a responsible reward.

The expectation and foresight of investors as well as speculators determine the magnitude of price fluctuations to a large extent. If market participants anticipate changes in either fundamental factors or technical factors correctly, and if the change or anticipated change comes about gradually, the price moves in a smooth fashion from one point of equilibrium to another. On the contrary, when the anticipations prove to be either too optimistic or too pessimistic, or the changes in these factors or anticipations about them, undergo a sudden changes, the prices move erratically, rather than move in a smooth fashion resulting in greater price fluctuations.

The numbers of speculations in relation to other trader also influence the extent of fluctuations. The traditional role of a speculator is act as a buyer when there is excess supply and as a seller when there is excess demand.

Changes in fundamental and other factor as well as correct or incorrect anticipations also determine the short-term and the long-term price changes. If the changes takes place gradually and anticipation prove to be correct, the short-term fluctuations tend to be similar in magnitude as that of average long-term fluctuations, as in this case, the short-term fluctuations or price changes tend to be one direction, which add up to determine long-term fluctuations. On the contrary, if the anticipations are not correct, irrespective of mode of arrival of information- whether gradual or not gradual the average long-term fluctuations tend to be smaller than the short-term fluctuations.It is clear that the fluctuation of price or price volatility is influenced by the arrival of information- gradual or otherwise- and the correct or incorrect anticipation of market participants. Further, the role played by a speculator either corrects the situation by minimizing the extent of fluctuations, or further accentuates fluctuations and thereby destabilizes prices.1.2 Statistical tools used for calculation of volatilityBetaThe market risk of a security reflects its sensitivity to market movement. Such sensitivity of a security is called beta. Beta measure the non diversifiable risk. Beta show how the price of a security responds to market forces. In effect, the more responsive the price of a security is to change in the market, the higher will be its Beta. Beta is calculated by relating the return on security with the return for the market. It can be positive or negative.Beta for each stock calculated using daily opening and closing share price each company and corresponding daily Bombay Stock Exchange Sensex. First, rate of returns of companies and Bombay Stock Exchange Sensex are calculated. The calculation as follows:Rate of Return= share price in the closing-share price at the opening/ share price in the openingβ >1: Beta of more than one indicates that the security has more unavoidable risk or is more volatile than market as a wholeβ=1: Beta of one indicate that volatility of return on the security is same as the market or indexβ <1: Beta less than 1 indicates that the security has less systematic risk or is less volatile than marketThe slope function in MS-EXCEL is a convenient way to calculate the BetaStandard DeviationThis is the most commonly used measure of risk in finance. Its square also is widely used to find out the risk associated with a security.Coefficient of correlationCoefficient of correlation is a statistical technique, which measure the degree or extent to which two or more variables fluctuate with reference to one another. Correlation analysis helps in determining the degree of relationship between two or variables.

Introduction:

Stock exchanges to some extent play an important role as indicators, reflecting the performance

of the country's economic state of health. Stock market is a place where securities are bought and

sold. It is exposed to a high degree of volatility; prices fluctuate within minutes and are

determined by the demand and supply of stocks at a given time. Stockbrokers are the ones who

buy and sell securities on behalf of individuals and institutions for some commission.

The Securities and Exchange Board of India (SEBI) is the authorized body, which regulates the

operations of stock exchanges, banks and other financial institutions. The past performances in

the capital markets especially the securities scam by Harshad Mehta has led to tightening of the

operations by SEBI. In addition the international trading and investment exposure has made it

imperative to better operational efficiency. With the view to improve, discipline and bring

greater transparency in this sector, constant efforts are being made and to a certain extent

improvements have been made. As the condition of capital markets are constantly improving, it

has started drawing attention of lot more people than before. On the career related aspects,

professionals have opportunities to choose from for a wide range of jobs available in a number of

organizations in this sector and one can expect to have good times ahead of him.

INDIAN CAPITAL MARKET OVERVIEW

Evolution

Indian Stock Markets are one of the oldest in Asia. Its history dates back to nearly 200 years ago.

The earliest records of security dealings in India are meager and obscure. The East India

Company was the dominant institution in those days and business in its loan securities used to be

transacted towards the close of the eighteenth century. Thus, at present, there are totally twenty-

one recognized stock exchanges in India excluding the Over The Counter Exchange of India

Limited (OTCEI) and the National Stock Exchange of India Limited (NSEIL).

Trading Pattern of the Indian Stock Market

Trading in Indian stock exchanges is limited to listed securities of public limited companies.

They are broadly divided into two categories, namely, specified securities (forward list) and non

specified securities (cash list). Equity shares of dividend paying, growth-oriented companies

with a paid-up capital of at least `50 million and a market capitalization of at least `100 million

and having more than 20,000 shareholders are, normally, put in the specified group and the

balance in non-specified group. Two types of transactions can be carried out on the Indian stock

exchanges:

(a) Spot delivery transactions "for delivery and payment within the time or on the date stipulated

when entering into the contract which shall not be more than 14 days following the date of the

contract”

(b) Forward transactions "delivery and payment can be extended by further period of 14 days

each so that the overall period does not exceed 90 days from the date of the contract". The latter

is permitted only in the case of specified shares. The brokers who carry over the outstanding pay

carry over charges (cantango or backwardation), which are usually determined by the rates of

interest prevailing. A member broker in an Indian stock exchange can act as an agent, buy and

sell securities for his clients on a commission basis and also can act as a trader or dealer as a

principal, buy and sell securities on his own account and risk, in contrast with the practice

prevailing on New York and London Stock Exchanges, where a member can act as a jobber or a

broker only. The nature of trading on Indian Stock Exchanges are that of age old conventional

style of face-to-face trading with bids and offers being made by open outcry. However, there is a

great amount of effort to modernize the Indian stock exchanges in the very recent times.

Over The Counter Exchange of India (OTCEI)

The traditional trading mechanism prevailed in the Indian stock markets gave way to many

functional inefficiencies, such as, absence of liquidity, lack of transparency, unduly long

settlement periods and benami transactions, which affected the small investors to a great extent.

To provide improved services to investors, the country's first ring less, scrip less, electronic stock

exchange - OTCEI - was created in 1992 by country's premier financial institutions - Unit Trust

of India, Industrial Credit and Investment Corporation of India, Industrial Development Bank of

India, SBI Capital Markets, Industrial Finance Corporation of India, General Insurance

Corporation and its subsidiaries and Can Bank Financial Services. Trading at OTCEI is done

over the centers spread across the country. Securities traded on the OTCEI are classified into:

Listed Securities - The shares and debentures of the companies listed on the OTC can be

bought or sold at any OTC counter all over the country and they should not be listed anywhere

else

Permitted Securities - Certain shares and debentures listed on other exchanges and units of

mutual funds are allowed to be traded

Initiated debentures - Any equity holding at least 1, 00,000 debentures of particular scrip can

offer them for trading on the OTC.

OTC has a unique feature of trading compared to other traditional exchanges. That is, certificates

of listed securities and initiated debentures are not traded at OTC. The original certificate will be

safely with the custodian. But, a counter receipt is generated out at the counter, which substitutes

the share certificate and is used for all transactions. In the case of permitted securities, the system

is similar to a traditional stock exchange. The difference is that the delivery and payment

procedure will be completed within 14 days. Compared to the traditional Exchanges, OTC

Exchange network has the following advantages:

OTCEI has widely dispersed trading mechanism across the country, which provides greater

liquidity and lesser risk of intermediary charges.

Greater transparency and accuracy of prices is obtained due to the screen based scrip less

trading.

Since the exact price of the transaction is shown on the computer screen, the investor gets to

know the exact price at which s/he is trading.

Faster settlement and transfer process compared to other exchanges.

In the case of an OTC issue (new issue), the allotment procedure is completed in a month and

trading commences after a month of the issue closure, whereas it takes a longer period for the

same with respect to other exchanges.

Thus, with the superior trading mechanism coupled with information transparency investors are

gradually becoming aware of the manifold advantages of the OTCEI.

National Stock Exchange (NSE)

With the liberalization of the Indian economy, it was found inevitable to lift the Indian stock

market trading system on par with the international standards. On the basis of the

recommendations of high-powered Pherwani Committee, Industrial Development Bank of India,

Industrial Credit and Investment Corporation of India, Industrial Finance Corporation of India,

all Insurance Corporations, selected commercial banks and others incorporated the National

Stock Exchange in 1992. Trading at NSE can be classified under two broad categories:

Wholesale debt market and

Capital market.

Wholesale debt market operations are similar to money market operations-institutions and

corporate bodies enter into high value transactions in financial instruments such as government

securities, treasury bills, public sector unit bonds, commercial paper, certificate of deposit, etc.

There are two kinds of players in NSE:

Trading members and

Participants.

Recognized members of NSE are called trading members who trade on behalf of themselves and

their clients. Participants include trading members and large players like banks who take direct

settlement responsibility. Trading at NSE takes place through a fully automated screen-based

trading mechanism, which adopts the principle of an order-driven market. Trading members can

stay at their offices and execute the trading, since they are linked through a communication

network. The prices at which the buyer and seller are willing to transact will appear on the

screen. When the prices match the transaction will be completed and a confirmation slip will be

printed at the office of the trading member. NSE has several advantages over the traditional

trading exchanges. They are as follows:

NSE brings an integrated stock market trading network across the nation. Investors can trade

at the same price from anywhere in the country since inter-market operations are streamlined

coupled with the countrywide access to the securities.

Delays in communication, late payments and the malpractice’s prevailing in the traditional

trading mechanism can be done away with greater operational efficiency and informational

transparency in the stock market operations, with the support of total computerized network.

Unless stock markets provide professionals service to small investors, foreign investors will not

be interested in capital market operations. And capital market being one of the major sources of

long-term finance for industrial projects, India cannot afford to damage the capital market path.

In this regard NSE gains vital importance in the Indian capital market system

.

Bombay Stock Exchange (BSE) – SENSEX

For the premier Stock Exchange that pioneered the stock broking activity in India, 128 years of

experience seems to be a proud milestone. A lot has changed since 1875 when 318 persons

became members of what today is called "The Stock Exchange, Mumbai" by paying a princely

amount of `1. Since then, the country's capital markets have passed through both good and bad

periods. The journey in the 20th century has not been an easy one. Till the decade of eighties,

there was no scale to measure the ups and downs in the Indian stock market. The Stock

Exchange, Mumbai (BSE) in 1986 came out with a stock index that subsequently became the

barometer of the Indian stock market. SENSEX is not only scientifically designed but also based

on globally accepted construction and review methodology. First compiled in 1986, SENSEX is

a basket of 30 constituent stocks representing a sample of large, liquid and representative

companies. The base year of SENSEX is 1978-79 and the base value is 100. The index is widely

reported in both domestic and international markets through print as well as electronic media.

The Index was initially calculated based on the "Full Market Capitalization" methodology but

was shifted to the free-float methodology with effect from September 1, 2003. The "Free-float

Market Capitalization" methodology of index construction is regarded as an industry best

practice globally. All major index providers like MSCI, FTSE, STOXX, S&P and Dow Jones use

the Free-float methodology. Due to is wide acceptance amongst the Indian investors; SENSEX is

regarded to be the pulse of the Indian stock market. As the oldest index in the country, it

provides the time series data over a fairly long period of time (From 1979 onwards). Small

wonder, The SENSEX has over the years become one of the most prominent brands in the

country. The growth of equity markets in India has been phenomenal in the decade gone by.

Right from early nineties the stock market witnessed heightened activity in terms of various bull

and bear runs. The SENSEX captured all these events in the most judicial manner. One can

identify the booms and busts of the Indian stock market through SENSEX.

INDUSTRY PROFILE

The BSE Sensex or Bombay stock Exchange Sensitive index is a value-weighted index

composed of 30 stocks with the base April 1979. It consists of the 30 largest and most actively

traded stocks, representative of various sectors, on the Bombay Stock Exchange, These

companies account for around one-fifth of the market capitalization of the BSE.

The base value of the Sensex on April 1, 1979 and the base year of BSE SENSEX is 1978-1979.

At irregular interval, the Bombay Stock Exchange authorities review and modify its composition

to make sure it reflects current market conditions.

The abbreviated form “Sensex” was coined by Deepak Mohoni around 1990 while writing

market analysis columns for some of the business newspapers and magazines. It gained

popularity over the next year or two.

The software industry comprises of business involved in the development maintenance and

publication of computer software. The software industry started I the mid-1970s at the time of

the personal computer revolution. The industry also includes software services, such as training

and consultancy. The largest and most profitable of software companies are located in the United

States. As of 2006, the software industry is dominated by Microsoft. Software magazine’s 500

list in 2005 shows the total amount of revenue brought in by software companies per locale, with

the highest being California due to silicon valley and the amount of Fortune 500 software

companies residing in that area.

There are mainly two types of business in the software industry; those developing proprietary

software such as Microsoft, and those developing open source software.

Developing software is costly and involves software licensing and the need to protect from

cracking and piracy.

A pharmaceutical company or drug company is a commercial business licensed to research,

develop, market and/or distribute drugs, most commonly in the context of healthcare. They can

deal in generic and/or brand medications. They are subject to a variety of laws and regulations

regarding the patenting, testing and marketing of drugs, particularly prescription drugs. From its

beginnings at the start of the 19th century, the pharmaceutical industry is now one of the most

successful and influential, attracting both praise and controversy

The oil industry operates on the petroleum market. Petroleum is vital to nearly all other

industries, if not industrialized civilization itself, and thus is critical concern to many nations. Oil

accounts for a large percentage of the world’s energy consumption, ranging from a low of 32%

for Europe and Asia, up to high of 53% for the Middle East. Other geographic region’s

consumption patterns are as follows: south and Central America (44%), Africa (41%) and North

America (40%). The world at large consumes 30 billion barrels (4.8km) of oil per year, and the

top oil consumers largely consist of developed nations. In fact, 24% of the oil consumed in 2004

went to the United Stated alone.

A publicly utility is a company that maintains the infrastructure for a public service (often also

providing a service using that infrastructure). Public utilities often involve natural monopolies,

and as a result are often government monopolies, or if privately owned, treated as specially

regulated sectors.

The manufacturing industry includes those economic sectors that create a finished, usable

product: manufacturing and construction. This sector of industry generally takes the output of the

primary sector and manufacturing finished goods or product to a point where they are suitable

for use by other businesses, for export, or sale to domestic consumers. This sector is often

divided into light industry and heavy industry. Many of these industries consume large quantities

of energy and require factories and machinery to convert the raw materials into goods and

products. They also produce waste materials and waste heat that may pose environmental

problems or cause pollution.

COMPANY PROFILE

Bharat Heavy Electricals Limited (BHEL) is a Gas and Steam turbine manufacturer in

India. It is one of the 9th large Public Sector Undertaking known as navratnas or ‘nine jewels’.

Some of its manufacturing units are located in Bhopal (Madhya Pradesh), Haridwar

(Uttarkhand), Hyderabad (Andhra Pradesh), Trichi and Ranipet (Tamil Nadu) and Bangalore

(Karnataka)/ BHEL is a key player I power sector through erection, commission and servicing of

power plants all over the world. BHEL is an engineering conglomerate, offering a wide spectrum

of products and services for core sectors like Power Generation, Transmission and Distribution,

Industry, transportation, Oil & Gas, etc, besides supply of Non Conventional Energy Systems.

Over 65% power generated in India is through the use of BHEL supplied equipment.

Larsen and Turbo Limited is India’s largest engineering and construction conglomerate with

diverse interests such as Construction, hydraulics equipments, power services electrical and

electronics, fertilizer projects, medical electronics and information technology. It generates

almost 85% of its revenue from the construction business. Founded in 1938, the company is

currently headquartered in Mumbai, India. A strong, customer-focused approach and the constant

quest for top-class quality have enabled the company to attain and sustain leadership position for

over six decades.

L&T has made Spectacular achievements in Indian industry. Many of the engineering projects

executed by L&T have set new benchmark in terms of scale, sophistication and speed. So do

many building, highways, bridges and civil structures around the country which are widely

regarded as landmarks

HDFC or Housing development Finance Corporation Limited, was incorporated in 1977 with

the primary objective of meeting a social need – that of promoting home ownership by providing

long-term finance to households for their housing needs. HDFC was promoted with an initial

share capital of Rs.100 million.

HDFC Bank, one amongst the firsts of the new generation, tech-savvy commercial banks of

India, was set in August 1944 after the Reserve Bank of India allowed setting up of banks in the

private sector. The Bank was promoted by the Housing Development

Finance Corporation Limited, a premier housing finance company (set up in 1977) of India.

Currently HDFC bank has over 600 branches located in over 300 cities of India, and all branches

of the bank are linked on an online real-time basis. The bank offers many innovative products &

services to individual, corporate, trusts, governments, partnerships, financial institutions, mutual

funds and insurance companies. The bank also has over 1600 ATMs. In the next few months the

number of branches and ATMs should go up substantially.

State bank of India (SBI) is the largest bank in India. If one measures by the number of branch

offices and employees, SBI is the largest bank in the world. Established in 1806 as Bank of

Bengal, it is the oldest commercial bank in the Indian Subcontinent. SBI provides various

domestic, international and NRI products and services, through its vast network in India and

overseas. With an asset base $322.077 billion and its reach, it is a regional banking behemoth.

The government nationalized the bank in 1955, with the Reserve Bank of India taking a 60%

ownership stake. In recent years the bank has focused on two priorities, reducing its huge staff

through Golden handshake schemes known as the voluntary Retirement Scheme, which saw

many of its best and brightest defects to the private sector, and, computerizing its operations.

The State Bank of India traces its root to the first decade of 19th century, when the Bank of

Calcutta, later renamed the Bank of Bengal, was established on 2nd June 1806. The government

amalgamated Bank of Bengal and two other Presidency banks, namely, the Bank of Bombay

(incorporated on 15th April 1840) and the Bank of Madras on 27 January 1921, and named the

reorganized banking entity the Imperial Bank of India.

The State Bank of India Act 1955, enacted by the parliament of India, authorized the

Reserve Bank of India, which is the central banking organization of India, to acquire a

controlling interest in the Imperial Bank of India, which was renamed the State Bank of

India on 30th April 1955.

Hindustan Unilever Limited, erstwhile Hindustan Lever Limited (also called HL),

headquartered in Mumbai, is India’s largest consumer products company, formed in 1933 as

Lever Brothers India Limited. Its 41,000 employees are headed by Mr.harish Manwani, the non-

executive chairman of the board. HUL is the market leader in Indian products such as tea, soaps,

detergents, as its products have become daily household name in India. The Anglo-Dutch

company Unilever owns a majority stake in Hindustan

Lever Limited. Recently in February 2007, the company has been renamed to “Hindustan

Unilever Limited” to provide the optimum balance between maintaining the heritage of the

company and the future benefits and synergies of global alignment with the corporate name of

“Unilever”.

ITC Limited which previously stood for “Imperial Tobacco Company”, is one of India’s

foremost private sector companies with a market capitalization of more than US $10 billion and

a turnover of US $3.5 billion. Rated among the world’s Best Big Companies by Forbes

magazine, ITC ranks third in pre-tax profit among India’s private sector corporations.

Cipla founded as the Chemical, Industrial & Pharmaceutical Laboratories is a major Indian

pharmaceutical company, best-known for manufacturing economical anti-AIDS drugs. The

company was founded in 1935 by Khwaja Abdul Hamied, and its chairman today is Yusuf

Hamied, the founder’s eldest son. Today, cipla is the world’s largest manufacturer of

antiretroviral drugs to fight HIV/AIDS, as measured by units produced, distributed and sold

(multinational brand name drugs are exponentially more expensive, so in money terms Cipla’s

medicine are probably not in top spot)

DLF Limited or DLF (originally Delhi Land and Finance) is India's biggest real estate

developer. The DLF Group was founded by Raghuvendra Singh in 1946 and is based in

New Delhi, India. DLF developed residential colonies in Delhi such as Shivaji Park (their first

development), Rajouri Garden, Krishna Nagar, South Extension, Greater Kailash,

Kailash Colony, and Hauz Khas. DLF builds residential, office, and retail properties.

With the passage of Delhi Development Act in 1957, the local government assumed control of

real estate development in Delhi and banned private real estate developers. As a result DLF

began acquiring land at relatively low cost outside the area controlled by the Delhi Development

Authority, in the district of Gurgaon, in the adjacent state of Haryana.

In the mid-1970s, the company started developing their DLF City project at Gurgaon. Its plans

include hotels, infrastructure and special economic zones-related development projects. The

company is headed by Indian billionaire Kushal Pal Singh, a Jat from Buland Shahar. Kushal Pal

Singh, according to the Forbes listing of richest billionaires in 2009, was the 98th richest man in

the world and the world's richest property developer. The company's US $2 billion IPO in July,

2007 was India's biggest IPO in history. In its first quarter results for the period ending 30 June

2007, the company reported a turnover of 3,120.98Crore and profits after taxes of 1,515.48Crore.

Jaypee Group was founded by Mr. Jaiprakash Gaur. Jaypee Group is five decade old

conglomerate based in Noida, India, involved in various industries that include Engineering,

construction, Cement, Power, Hospitality, Real Estate, Expressways,

Highways, Education and Social Commitment. Shri. Jaiprakash Gaur, Founder Chairman of

Jaiprakash Associates Limited after acquiring a Diploma in Civil Engineering in 1950 from the

University of Roorkee, had a stint with Govt. of U.P. and branched off on his own, to start as a

civil contractor in 1958, group is the 3rd largest cement producer in the country. The groups

cement facilities are located today all over India in 10 states, with 18 plants having an aggregate

cement production capacity of 24 Million Tonnes and same is poised to become 36 Million

Tonnes before October 2011.

Infosys Technologies Limited is an information technology (IT) services company founded in

Pune, India in 1981 by N.R. Narayan Murthy and six of his colleagues. In 1983, Infosys moved

its headquarter to Bangalore, the capital of Karnataka. It operates nine development centers in

India and has over 30 offices worldwide, Annual revenues for fiscal year 2007 exceeded US $3.1

billion with a market capitalization of over US $30 billion. With over 72,000 employees

worldwide, Infosys is one of India’s largest IT companies.

Tata Consultancy Services Limited (TCS) is an Indian IT services, business solutions and

outsourcing company headquartered in Mumbai, India. TCS is the largest provider of

information technology in Asia and second largest provider of business process outsourcing

services in India.

TCS is one of the operative subsidiaries of one of India's largest and oldest conglomerate

company, the Tata Group or Tata Sons Limited, which has interests in areas such as energy,

telecommunications, financial services, manufacturing, chemicals, engineering, materials,

government and healthcare.

Wipro Technologies is an IT service company established in 1980 in India. It is a subsidiary of

Wipro Limited (incorporated 1946, in operation since 1945). It is headquartered in Bangalore. It

is the third largest IT services company in India. It has 122,385 employees as of march 2011,

inclusive of its BPO and which it acquired in 2002. Wipro Technologies has over 300 customers

across USA, Europe and Japan including 50 of the Fortune 500 companies. Some of its

customers are Boeing, Cisco, Ericsson, IBM, Microsoft, Prudential, Segate, Sony,

SunMicrosystems and Toshiba.

With revenue in the excess of US $6 billion, Wipro is one of India’s major information

technology companies. Wipro had dedicated development centers and offices across India,

Europe, North America and Asia Pacific. The current chairman, Managing director and majority

stake owner is Azim Premji. From inception, the software and hardware divisions have been

headed by him.

Jindal Steel and Power Limited (JSPL) is the most valuable private steel producer in

India, with an annual turnover of over US $2.1 billion ( 11,000crore), Jindal Steel &

Power Limited (JSPL) is a part of about US $12 billion diversified O. P. Jindal Group.

JSPL is a leading player in Steel, Power, Mining, Oil & Gas and Infrastructure. Mr.

Naveen Jindal, the youngest son of the late Shri. O P Jindal, drives JSPL and its group

companies Jindal Power Ltd, Jindal Petroleum Ltd., Jindal Cement Ltd. and Jindal Steel

Bolivia. The company professes a belief in the concept of self-sufficiency. The company

produces steel and power through backward integration from its own captive coal and iron-ore

mines. However, in terms of tonnage, it is the third largest steel producer in India. The company

manufactures and sells sponge iron, mild steel slabs, ferro chrome, iron ore, mild steel, structural,

hot rolled plates and coils and coal based sponge iron plant. The company is also involved in

power generation. Jindal Steel and Power is a part of the Jindal Group, founded by O. P. Jindal

(1930– 2005). In 1969, he started Pipe Unit Jindal India Limited, one of the earlier incarnations

of his business empire. After Jindal's death in 2005, much of his assets were transferred to his

wife, Savitri Jindal. Jindal Group's management was then split among his four sons with Naveen

Jindal as the Managing Director of Jindal Steel and Power Limited. His elder brother, Sajjan

Jindal, is currently the head of ASSOCHAM, an influential body of the chambers of commerce,

and the head of JSW Group, part of O.P. Jindal Group.

Sterlite Industries India Ltd. (SLT) is a subsidiary of Vedanta Resources plc, a diversified and

integrated metals and mining group. The company engages primarily in the production of copper

in India. Its products include copper cathodes; and cast copper rods. The company’s main

operating subsidiaries are Hindustan Zinc Limited for its zinc and lead operations; Copper Mines

of Tasmania Pty Limited for its copper operations in Australia; and Bharat Aluminium Company

Limited for its aluminium operations.

The company is entering into the commercial power generation business by setting up a large

scale 2,400 MW coal based independent thermal power plant in Jharsuguda, Orissa and a wind

energy project at Karnataka, Gujarat and Maharashtra, totaling 110.4 MW. Post completion of

these projects, the company will have a total wind power capacity of 148.8 MW. As of March

31, 2010, it also operates a copper mine in Australia.

Tata steel, formerly known as TISCO (Tata Iron and Steel Company Limited), is a steel

company based in Jamshedpur, India. Its main plant is located in Jamshedpur, Jharkhand, though

with its recent acquisitions, the company has become a multinational with operation in various

countries. The registered office of Tata Steel is in Mumbai. In the year 2000, the company was

recognized as the world’s lowest-cost producer by World Steel Dynamics in 2005. The company

is listed on BSE and NSE, Tata Steel is a limited company registered in India under the

Companies Act, 1956.

Reliance Industries Limited (RIL) is the largest private sector conglomerate company

headquartered at Mumbai, India. The company is largest by annual turnover of US $58.5 billion

and market capitalization of US $78.2 billion for the fiscal year ending in March 2011 making it

one of the largest India's private sector companies, being ranked at 264th position in the Fortune

Global 500 (2009) and at the 126th position in the Forbes Global 2000 list (2010).

Reliance was founded by the Indian industrialist Dhirubhai Ambani in 1966. Ambani has been a

pioneer in introducing financial instruments like fully convertible debentures to the Indian stock

markets. Ambani was one of the first entrepreneurs to draw retail investors to the stock markets.

Critics allege that the rise of Reliance Industries to the top slot in terms of market capitalization

is largely due to Dhirubhai's ability to manipulate the levers of a controlled economy to his

advantage.

Though the company's petrochemicals, refining, and oil and gas-related operations form the core

of its business, however, other segment of the company includes textile, retail business,

telecommunications and special economic zone (SEZ) development. After severe differences

between the founder's two sons, Mukesh Ambani and Anil Ambani, the group was divided

between them in 2006. In September 2008, Reliance Industries was the only Indian firm featured

in the Forbes's list of "world's 100 most respected companies". In 2010, it stood at 13th position

in the Platts Top 250 Global Energy Company Rankings.

NTPC Limited (formerly National Thermal Power Corporation) is the largest stateowned power

generating company in India. Forbes Global 2000 for 2009 ranked it 317th in the world. It is an

Indian public sector company listed on the Bombay Stock Exchange although at present the

Government of India holds 84.5% (after divestment the stake by Indian government on 19

october2009 of its equity. With a current generating capacity of 34194 MW, NTPC has

embarked on plans to become a 00,000 MW company by 2017. It was founded on November 7,

2011. NTPC's core business is engineering, construction and operation of power generating

plants and providing consultancy to power utilities in India and abroad.

Reliance Infrastructure, formerly known as Reliance Energy and prior to that as

Bombay Suburban Electric Supply (BSES), Its India's largest private sector enterprise in power

utility and its a company under the Reliance Anil Dhirubhai Ambani Group banner, one of

India's largest conglomerates. The company is headed by Anil Ambani.

The company's corporate headquarters is situated in Mumbai. The company is the sole

distributor of electricity to consumers in the suburbs of Mumbai. It also runs power generation,

transmission and distribution businesses in other parts of Maharashtra, Goa and Andhra Pradesh.

Reliance Energy plans to increase its power generation capacity by adding 16,000 MW with

investments of $13 billion.

Tata Power is India’s oldest and largest private sector power utility with an installed generation

capacity of over 2977 MW. On the 22 March 2011 it has announced partnership with Sun energy

an Australian firm, to build India's first floating solar plant.

The firm started as the Tata Hydroelectric Power Supply Company in 1911, which amalgamated

with the Andhra Valley Power Supply Company in 1916; it commissioned India’s first large

hydro-electric project in 1915 in Bhivpuri and Khopoli, Karjat. Today the company is India’s

largest private sector electricity generating company with an installed generation capacity of over

2977 MW. It has a presence in thermal, hydro, solar and wind areas of power generation,

transmission and retail.

Bharti Airtel Limited commonly known as airtel, is an Indian telecommunications company

that operates in 19 countries across South Asia, Africa and the Channel Islands. It operates a

GSM network in all countries, providing 2G or 3G services depending upon the country of

operation. Airtel is the fifth largest telecom operator in the world with over 207.8 million

subscribers across 19 countries at the end of 2010. It is the largest cellular service provider in

India, with over 164.61 million subscribers at the end of 2011 April. Airtel is the 3rd largest in-

country mobile operator by subscriber base, behind China Mobile and China Unicom.

It is known for being the first mobile phone company in the world to outsource everything except

marketing and sales and finance. Its network (base stations, microwave links, etc.) are

maintained by Ericsson, Nokia Siemens Network and Huawei, business support by IBM and

transmission towers by another company (Bharti Infratel Ltd. in India). Ericsson agreed for the

first time, to be paid by the minute for installation and maintenance of their equipment rather

than being paid up front. This enabled the company to provide pan-India phone call rates of Rs.

1/minute (U$0.02/minute). Call rates have come down much further. During the last financial

year [2009-10], Bharti has roped in a strategic partner Alcatel-Lucent to manage the network

infrastructure for the Telemedia Business

Reliance Communications Limited (commonly called RCOM) is a major Indian

telecommunication company headquartered in Navi Mumbai, India. It is the 16th largest operator

in the world with more than 128 million subscribers. RCOM, founded by Dhirubhai H Ambani

(1932–2002), is the flagship company of the Reliance Anil Dhirubhai Ambani Group. The

Reliance Anil Dhirubhai Ambani Group currently has a net worth in excess of 64,000crore

(US$13.6 billion), cash flows of 13,000crore ($2.8 billion), and a net profit of 8,400crore ($1.8

billion). The Equity Shares of RCOM are listed on Bombay Stock Exchange Limited and

National Stock Exchange Limited. The Global Depository Receipts and Foreign Currency

Convertible Bonds are listed on Luxembourg Stock Exchange and Singapore Stock Exchange

respectively.

Bajaj Auto is a major Indian automobile manufacturer. It is India’s largest and the world’s 2th

largest two-and three-wheeler maker. It is based in Pune, Maharashtra with plant in Waluj near

Aurangabad, Akurdi and Chakan, near Pune. Bajaj Auto makes and exports motor scooters,

motorcycles and the auto rickshaw. It is widely believed that

Bajaj is headed for a de-merger into 2 separate companies: Bajaj Auto and Bajaj Finance. It is

expected that sum of the parts created, will be worth more that the current whole, as was the case

in the de-merger of Reliance Industries.

Hero Honda Motorcycles is the World’s biggest manufacturer of motorcycles. Hero

Honda is a 50:50 joint venture that began in 1984 between the hero group of India and Honda

from Japan. It has been the world’s biggest manufacturer of 2-wheeled motorized vehicles since

2001, when it produced 1.3million motorbikes in a single year. Hero Honda’s Splendor is the

world’s largest selling motorcycle. Its 2 plants are in Dharuhera and Gurgaon both in India. It

specializes in dual use motorcycles that are low powered but very fuel efficient.

Mahindra & Mahindra Limited is the flagship company of the Mahindra Group, a

multinational conglomerate based in Mumbai, India. The company was set up in 1945 in

Ludhiana as Mahindra & Mohammed by brothers K.C. Mahindra and J.C. Mahindra and Malik

Ghulam Mohammed. After India gained independence and Pakistan was formed,

Mohammed immigrated to Pakistan where he became the nation's first finance minister.

The company changed its name to Mahindra & Mahindra in 1948.

Mahindra & Mahindra was set up as a steel trading company in 1945. It soon expanded into

manufacturing general-purpose utility vehicles, starting with assembly under license of the iconic

Willys Jeep in India. Soon established as the Jeep manufacturers of India,

M&M later branched out into the manufacture of light commercial vehicles (LCVs) and

agricultural tractors. Today, M&M is the leader in the utility vehicle segment in India with its

flagship UV Scorpio and enjoys a growing global market presence in both the automotive and

tractor businesses. Over the past few years, M&M has expanded into new industries and

geographies. They entered into the two-wheeler segment by taking over Kinetic Motors in India.

M&M also has controlling stake in REVA Electric Car Company and acquired South Korea's

SsangYong Motor Company in 2011.

Maruti Suzuki India Limited a partial subsidiary of Suzuki Motor Corporation of

Japan, is India's largest passenger car company, accounting for over 45% of the domestic car

market. The company offers a complete range of cars from entry level Maruti 800 and Alto, to

hatchback Ritz, A star, Swift, Wagon-R, Estillo and sedans DZire, SX4 and Sports Utility

vehicle Grand Vitara. It was the first company in India to mass-produce and sell more than a

million cars. It is largely credited for having brought in an automobile revolution to India. It is

the market leader in India and on 17 September 2007, Maruti Udyog Limited was renamed

Maruti Suzuki India Limited. The company's headquarters are located in New Delhi.

Tata Motors Limited, formerly known as TELCO (TATA Engineering and Locomotive

Company), is India’s largest passenger automobile and commercial vehicle manufacturing

company. It is also the world’s largest commercial vehicle manufacturer.

It is a part of Tata Group. Tata Motors is widely credited for putting India on the automotive map

by designing and developing its own range of cars. Tata Motors date back to 1945 when they

started making Trains. Tata Motors was first listed on the NYSE in 2004.

Tata Motors had created the wealth 320 billion during 2001-2006 among top 10 wealth creators

in India. It has its manufacturing base in Jamshedpur, Lucknow and Pune. In

2004 it also bought Daewoo’s truck manufacturing unit in south Korea. In March, 2005, it

acquired a 21% stake in Hispano Carrocera SA, giving it controlling rights in the company. Tata

Motors and the Fiat group have signed a new Memorandum of

Understanding (MoU) to establish a 50:50 joint venture toi manufacture passenger vehicles,

engines and transmission systems for both domestic and export markets.

ICICI Bank Limited is a major banking and financial services company based in Mumbai. It is

the second largest bank in India and the largest private sector bank in India by market

capitalization. The bank also has a network of 2,529 branches (as on 31 March 2010) and about

6,102 ATMs in India and presence in 19 countries, as well as some 24 million customers (at the

end of July 2007). ICICI Bank offers a wide range of banking products and financial services to

corporate and retail customers through a variety of delivery channels and specialization

subsidiaries and affiliates in the areas of investment banking, life and non-life insurance, venture

capital and asset management. (These data are dynamic.) ICICI Bank is also the largest issuer of

credit cards in India. ICICI Bank's shares are listed on the stock exchanges at BSE, NSE, Kolkata

and Vadodara (formerly Baroda) ; its ADRs trade on the New York Stock Exchange (NYSE).

ICICI reported a 1.15% rise in net profit to 1,014.21crore on a 1.29% increase in total income to

9,712.31crore in Q2 September 2008 over Q2 September 2007. The bank's

CASA ratio increased to 30% in 2008 from 25% in 2007. ICICI Bank is one of the Big Four

banks of India, along with State Bank of India, Punjab National Bank and HDFC Bank—its main

competitors.

Hindalco Industries Ltd. is one of the world's largest Aluminium manufacturing company and

is a subsidiary of the Aditya Birla Group. It is run by one of the world's youngest billionaires,

Mr. K.M. Birla. The company has annual sales of $ 5 billion and employs 13,675 people and is

listed on Forbes 2000. A metals powerhouse with a turnover of US$ 14 billion, Hindalco is one

of the world's largest aluminium rolling company and one of the biggest producers of primary

aluminium in Asia. On February 11, 2007, the company entered into an agreement to acquire the

Canadian company Novelis for U$6 billion, making the combined entity the world's largest

rolled-aluminium producer. On May 15, 2007, the acquisition was completed with Novelis

shareholders receiving $44.93 per outstanding share of common stock. Hindalco, through its

wholly owned subsidiary AV Metals Inc., acquired 75,415,536 common shares of Novelis,

representing 100 percent of the issued and outstanding common shares. Immediately after

closing, AV Metals Inc. transferred the common shares of Novelis to its wholly owned

subsidiary AV Aluminum Inc. Hindalco is listed on the 2011 Forbes Global 2000 at the position

643.

Oil and Natural Gas Corporation Limited (ONGC) is an Indian state-owned oil and gas

company headquartered at Dehradun, India. It is a Fortune Global 500 company ranked 413, and

contributes 77% of India's crude oil production and 81% of India's natural gas production. It is

the highest profit making corporation in India, according to filings with the BSE of latest quarter

results External Link. It was set up as a commission on 14 August 1956. Indian government

holds 74.14% equity stake in this company.

ONGC is Asia's largest and most active company involved in exploration and production of oil.

It is involved in exploring for and exploiting hydrocarbons in 26 sedimentary basins of India. It

produces about 30% of India's crude oil requirement. It owns and operates more than 11,000

kilometers of pipelines in India. It is one of the highest profit making companies in India. In

2010, it stood at 18th position in the Platts Top 250 Global Energy Company Rankings.

After great Tsunami in Japan and Budget market was recovery in this month. In this month

market made its all time high at 19,575 on 31st March and all time low at 17,792 points on 21st

March. This month market gave good return to the investor because when market was closed

31st march at 19,792 points it was 1300 points up than the last month closing.

For the week ended Date:- 7/03/2011

Market friendly measures announced by Finance Minister Pranab Mukherjee in the Union

Budget 2011-12 presented on Feb 28 2011 pushed the markets higher in the first week

ending March 07. The BSE Sensex dropped 1.4% on Monday, with rate-sensitive sectors

contributing the most to the losses, hit by political worries on the domestic front and surging

crude oil prices.

The banking sector index, auto sector index and realty index fell between 1.6% and 2.6%, as firm

oil prices kept the focus on inflation concerns and more monetary tightening. The 30-share BSE

index declined 1.43%, or 263.78 points, to 18,222.67 points, with 25 of its components

declining. The BSE Sensex was at 18,222.67 decreasing by 263.78 points or by 1.43%. The top

gainers of the BSE Sensex pack were Wipro Ltd. (Rs. 446.20,+1.04%), Tata Power Company

Ltd. (Rs. 1230.35,+0.96%), Cipla Ltd. (Rs. 305.30,+0.38%), NTPC Ltd. (Rs. 179.60,+0.34%)

and ITC Ltd. (Rs. 172.55,+0.03%) among others.

The top losers of the BSE Sensex pack were Maruti Suzuki India Ltd. (Rs. 1264.70,- 3.73%),

Tata Motors Ltd. (Rs. 1127.25,-3.64%), Reliance Communications Ltd. (Rs. 90.05,-3.48%),

Bharat Heavy Electricals Ltd. (Rs. 2018.05,-3.21%) and State Bank of India (Rs. 2622.80,-

2.87%) among others

For the week ended Date:- 14/03/2011

The market edged lower for the second week ended March 11, 2011 as tension in Middle East

and North Africa region and a major earthquake in Japan on Friday March 11, sapped risk

appetite.

The BSE Sensex rose 1.46%, or 265.39 points, to 18,439.48. The top gainers of the BSE Sensex

pack were Reliance Communications Ltd. (Rs. 100.50,+4.36%), Tata Power Company Ltd. (Rs.

1248.85,+3.72%), Reliance Infrastructure Ltd. (Rs. 625.70,+3.48%), Tata Steel Ltd. (Rs.

601.05,+3.27%) and Jaiprakash Associates Ltd. (Rs. 84.15,+2.68%) among others.

The top losers of the BSE Sensex pack were Bharti Airtel Ltd. (Rs. 321.55,-0.40%), Hindustan

Unilever Ltd. (Rs. 277.50,-0.16%), Oil And Natural Gas Corporation Ltd. (Rs.

280.90,-0.14%) and Hero Honda Motors Ltd. (Rs. 1531.15,-0.06%) among others

For the week ended Date:-14/03/2011

The market continued to fall in the third week ending March 18 on concerns over

developments in Japan and its impact on the global recovery. The RBI raised key interest

rates repo & reverse repo by 25 bps each at a mid-quarter policy review and said that it

would continue with its anti-inflationary stance. The central bank also warned that

continuing uncertainty about energy and commodity prices may vitiate the investment

climate, posing a threat to the current economic growth trajectory.

The BSE Sensex was at 17,839.05 declined by 39.76 points or by 0.22%. The top gainers of the

BSE Sensex pack were Jindal Steel & Power Ltd (Rs. 662.45, 1.95%), Mahindra & Mahindra

Ltd (Rs. 641.75, 1.39%), Sterlite Industries (India) Ltd (Rs. 159.90, 1.07%), Housing

Development Finance Corporation Ltd (Rs. 626.65, 0.92%) and Tata Steel Ltd (Rs. 601.50,

0.87%) among others.

The top losers of the BSE Sensex pack were Hindalco Industries Ltd (Rs. 191.10, 3.12%), Hero

Honda Motors Ltd (Rs. 1433.75, 2.74%), Maruti Suzuki India Ltd (Rs.n 1131.35, 2.33%), Cipla

Ltd (Rs. 287.60, 2.11%) and Wipro Ltd (Rs. 431.00, 1.90%) among others.

For the week ended Date:- 28/03/2011

The indices rallied smartly in the fourth week ending March 25. The stocks rose in four

out of five trading sessions in the week with bullish comments on India from billionaire

legendary investor Warren Buffett and on hopes for economic reforms, aiding the rally.

The Sensex & Nifty surged 5.2% each in the week. Mr. Buffet said that his firm Berkshire

Hathaway is looking to park funds in large investment destinations and India fits the bill

perfectly.

The BSE Sensex was at 18,943.14 advancing by 127.50 points or by 0.68%.The top gainers of

the BSE Sensex pack were Tata Motors Ltd (Rs. 1220.30, 3.25%), Bharti Airtel Ltd (Rs. 347.80,

2.57%), Larsen & Toubro Ltd (Rs. 1639.20, 2.56%), Reliance Infrastructure Ltd (Rs. 662.10,

1.76%) and Maruti Suzuki India Ltd (Rs. 1201.80, 1.69%) among others.

The top losers of the BSE Sensex pack were Jaiprakash Associates Ltd (Rs. 88.40, 2.16%),

Reliance Communications Ltd (Rs. 105.20, 1.50%), Sterlite Industries (India) Ltd (Rs. 167.05,

0.89%), Infosys Technologies Ltd (Rs. 3139.55, 0.71%) and DLF Ltd (Rs. 246.95, 0.66%)

among others.

For the week ended Date:-04/04/2011

In four out of five trading sessions in the first week of the month, the index jumped on

heavy buying by foreign funds fuelled by firm global outlook. Also the government eased

rules on foreign investments coming in India. Higher FII inflows were witnessed during

the week, which pushed up the Sensex

The BSE Sensex closed at 19,701.73 up by 281.34 points or by 1.45%.The top gainers of the

BSE Sensex pack were Mahindra & Mahindra Ltd (Rs. 743.85, 4.75%), Jaiprakash Associates

Ltd (Rs. 98.40, 3.25%), Bharat Heavy Electricals Ltd (Rs. 2173.80, 2.84%), HDFC Bank Ltd

(Rs. 2398.45, 2.78%) and Tata Consultancy Services Ltd (Rs. 1211.50, 2.70%) among others.

The top losers of the BSE Sensex pack were Reliance Communications Ltd (Rs. 109.15, 2.24%),

Hindustan Unilever Ltd (Rs. 279.45, 1.62%), Cipla Ltd (Rs. 315.95, 1.51%), Sterlite Industries

(India) Ltd (Rs. 173.10, 0.37%) and Reliance Infrastructure Ltd (Rs. 692.30, 0.30%) among

others.

For the week ended Date:-11/04/2011

The market continued its upward march for the second week as well. Strong macro

economic data coupled with higher auto sales and cement sales reported by the companies

for March 2011 boosted the benchmark index for the second week of the month.

The BSE SENSEX was at 19262.54 down by 188.91 points or by 0.97 %.Gainers from the BSE

Sensex pack were – Infosys (0.9%) and Bharti Airtel (0.04%). Losers from the BSE Sensex pack

were – HDFC Bk (5%), BHEL (4.76%), HDFC (4.44%), Hindalco Inds (4.44%) and JP Asso

(4.18%).

For the week ended Date:-18/04/2011

After a consistent upward movement in the first two weeks, the indices registered a fall for

the third week, primarily due to the profit booking. The profit-booking move by the

investors was triggered by concerns of high crude prices and rising inflation levels.

The BSE SENSEX was at 19,091.17 down by 295.65 points or by 1.53 %.The top gainers of the

BSE Sensex pack were Hero Honda Motors Ltd. (Rs. 1863.75,+1.80%), Hindustan Unilever Ltd.

(Rs. 280.30,+1.65%), Bajaj Auto Ltd. (Rs. 1433.15,+1.09%), Oil And Natural Gas Corporation

Ltd. (Rs. 287.85,+0.66%), Maruti Suzuki India Ltd. (Rs. 1260.85,+0.19%), among others. The

top losers of the BSE Sensex pack were DLF Ltd. (Rs. 233.55,-4.69%), Tata Consultancy

Services Ltd. (Rs. 1149.70,-3.43%), Jaiprakash Associates Ltd. (Rs. 96.00,- 3.13%), Tata Steel

Ltd. (Rs. 611.95,-2.92%), Infosys Technologies Ltd. (Rs. 2905.20,- 2.80%), among others.

For the week ended Date:- 25/04/11

Markets edged higher during the truncated week as prediction of normal monsoon for the

June-September period this year boosted investor sentiments. Resumption of buying by

foreign funds further pushed up the index. During the week Prime Minister's economic

advisory council (PMEAC) announced that that the inflation levels could slow down to

around 6% in the current fiscal year fuelled by a good farm output.

The BSE Sensex closed at 19,584.31 down by 17.92 points or by 0.09%.The top gainers of the

BSE Sensex pack were Sterlite Industries (India) Ltd. (Rs. 186.40, 4.40%), State Bank of India

(Rs. 2919.35, 2.06%), Maruti Suzuki India Ltd. (Rs. 1326.55, 1.53%), Infosys Technologies Ltd.

(Rs. 2942.15, 1.13%) and Larsen & Toubro Ltd. (Rs. 1721.50, 1.03%), among others.

The top losers of the BSE Sensex pack were Reliance Industries Ltd. (Rs. 1009.10, 2.97%), DLF

Ltd. (Rs. 241.50, 2.25%), Reliance Communications Ltd. (Rs. 104.80, 1.41%), Jaiprakash

Associates Ltd. (Rs. 100.70, 0.98%) and Jindal Steel & Power Ltd. (Rs. 688.45, 0.76%), among

others.

For the week ended Date:- 02/05/2011

The market edged lower in the first week ended May 06, 2011 on worries that higher

inflation may hit corporate profitability. A sustained selling drive by FIIs and an

aggressive interest rate hike by the RBI also dented the sentiment.

The BSE Sensex closed at 18,998.02 down by 137.94 points or by 0.72%. The top gainers of the

BSE Sensex pack were Tata Power Company Ltd (Rs. 1334.75, 2.43%), Cipla Ltd (Rs. 314.90,

1.96%), DLF Ltd (Rs. 226.60, 1.66%), Bharti Airtel Ltd (Rs. 383.95, 1.36%) and Infosys

Technologies Ltd (Rs. 2923.35, 0.60%), among others.

The top losers of the BSE Sensex pack were State Bank of India (Rs. 2691.65, 4.06%), Maruti

Suzuki India Ltd (Rs. 1288.50, 2.37%), Sterlite Industries (India) Ltd (Rs. 177.00, 2.26%), Bajaj

Auto Ltd (Rs. 1432.20, 2.09%) and Reliance Industries Ltd (Rs. 964.70, 1.76%), among others.

For the week ended Date:- 09/05/11

The key benchmark indices moved in a narrow range in the second week ended May 13,

2011. However, market wrapped the week on a positive note after poll results showed the

Congress party and its coalition is set to come in power in most of the states, helping allay

fears of a political uncertainty. The market gained in three out of the five trading sessions

in the week.

BSE SENSEX closed at 18528.96, up by 10.15 points or by 0.05 %.The top gainers of the BSE

Sensex pack were Bharti Airtel Ltd. (Rs. 364.55,+3.93%), Hindustan Unilever Ltd. (Rs.

284.45,+3.55%), Tata Power Company Ltd. (Rs. 1258.25,+2.49%), Jindal Steel & Power Ltd.

(Rs. 636.40,+1.02%), Sterlite Industries (India) Ltd. (Rs. 169.20,+0.95%), among others.

The top losers of the BSE Sensex pack were Maruti Suzuki India Ltd. (Rs. 1240.40,-

2.24%), Jaiprakash Associates Ltd. (Rs. 84.85,-1.91%), Tata Motors Ltd. (Rs. 1178.15,-

1.90%), Bajaj Auto Ltd. (Rs. 1294.75,-1.84%), Reliance Infrastructure Ltd. (Rs. 598.10,-

1.43%), among others.

For the week ended Date:- 16/05/2011

The negative sentiments continued in third week as well as the indices fell on sustained

foreign fund selling & on fears high interest rates may impact corporate profitability

The BSE Sensex closed at 18,345.03 down by 186.25 points or by 1.01%.The gainers from the

BSE Sensex pack were Hero Honda Motors (Rs. 1864.95, 3.87%), Bharat Heavy Electricals Ltd

(Rs. 2050.65, 0.93%), Bharti Airtel (Rs. 370.25, 0.83%) and TCS Ltd (Rs. 1,127.85, 0.01%).

The top losers of the BSE Sensex pack were Jaiprakash Associates (Rs. 84.75, 3.20%), DLF Ltd

(Rs. 225.70, 2.80%), Bajaj Auto Ltd (Rs. 1300.00, 2.79%), Mahindra & Mahindra Ltd (Rs.

673.15, 2.71%) and Tata Steel Ltd (Rs. 578.30, 2.64%), among others.

For the week ended Date:- 23/05/2011

The fall was marginal despite a series of negative news flows during the week like a sudden

spike in food inflation, a sharp dip in Jan-March 2011 FDI (down 32%) and announcement

made by the Government that it could miss the revenue collection targets during FY12

mainly on account of high inflation and moderating economic growth.

The BSE Sensex closed at 17,993.33 down by 332.76 points or by 1.82%. ITC Ltd (Rs.

190.05, 2.29%) was the only gainer from the BSE Sensex pack during today’s trade.

The top losers of the BSE Sensex pack were Bharat Heavy Electricals Ltd. (Rs. 1935.60, 6.69%),

ICICI Bank Ltd. (Rs. 1006.55, 3.61%), Reliance Infrastructure Ltd. (Rs. 548.15, 3.57%), Tata

Motors Ltd. (Rs. 1129.50, 3.36%) and Tata Steel Ltd. (Rs. 559.25, 3.30%), among others.

For the week ended Date:- 30/05/2011

The market bounced back smartly on positive global cues. This could be mainly because

the slower growth must have eased concerns of an aggressive monetary tightening by the

RBI to tame the inflation. Further, the India Meteorological Department (IMD) predicted

the southwest monsoon 2011 to be 98% (normal) of the long period average (LPA) & the

annual monsoon rains hit Kerala two days earlier than expected. This boosted the market

sentiment.

The BSE Sensex closed at 18,232.06 down by 34.04 points or by 0.19%.The top gainers of the

BSE Sensex pack were Cipla Ltd. (Rs. 329.55,+3.55%), Reliance Communications Ltd. (Rs.

87.50,+2.94%), DLF Ltd. (Rs. 231.00,+2.58%), Housing Development Finance Corporation Ltd.

(Rs. 668.80,+1.90%) and Bajaj Auto Ltd. (Rs. 1330.00,+1.19%), among others.

The top losers of the BSE Sensex pack were Mahindra & Mahindra Ltd. (Rs. 664.60,-

5.34%), Hindalco Industries Ltd. (Rs. 192.90,-2.33%), Oil And Natural Gas Corporation Ltd.

(Rs. 278.40,-1.63%), Tata Motors Ltd. (Rs. 1078.15,-0.96%) and Jindal Steel & Power Ltd. (Rs.

635.65,-0.96%), among others.

Analysis based on comparative Share Price Movement of Stocks of

Different Sector, from data collected for three months.

The following chart shows the fluctuation in the share market price in CAPITAL GOODS

SECTOR

Interpretation: The above chart shows from March to April the BHEL share price has been

decreased by Rs. 60.1, from April to May it has been decreased by Rs.56.65. From March to

May Larsen and Turbo share price has been decreased by Rs.55.35 and from April to May the

share price it has been increased by Rs.46.1.

FINANCE STOCKS

The following chart shows the fluctuation in the share market price in FINANCE SECTOR

INTERPRETATION: The above chart shows from March to April the

HDFC share price has been increased by Rs.10, from April to May it has been decreased by

Rs.23.25. From March to April the HDFC Bank Ltd share price has been decreased by Rs.50.45

and from April to May it has been increased by Rs.95.8. From March to April the ICICI Bank

Ltd share price has been increased by Rs.1.5 and from April to May it has been decreased by

Rs.28.25. From March to April the State Bank of India Ltd share price has been increased by

Rs.37.7 and from April to May it has been decreased by Rs.507.8.

FMCG STOCKS

INTERPRETATION: The above chart shows from March to April the

Hindustan Unilever Ltd share price has been increased by Rs.o.6, from April to May it has been

increased by Rs.19.65, From March to April ITC Ltd share price has been increased by Rs.10.5

and from April to May it has been increased by Rs.11.9.

\

HEALTHCARE STOCKS

The following chart shows the fluctuation in the share market price in HEALTHCARE SECTOR

INTERPRETATION: The above chart shows from March to April the Cipla Ltd share price

has been decreased by Rs.14.5, from April to May it has been increased by Rs.15.35.

HOUSING RELATED STOCKS

The following chart shows the fluctuation in the share market price

In HOUSING RELATED SECTOR

INTERPETATION: The above chart shows from March to April the DLF

Ltd share price has been decreased by Rs.44.3, from April to May it has been increased by

Rs.15.65. From March to April the Jaiprakash Associates Ltd share price has been Rs.0.2, from

April to May it has been increased by Rs.6.2.

INFORMATION TECHNOLOGY STOCKS

The following chart shows the fluctuation in the share market price in INFORMATION

TECHNOLOGY

INTERPRETATION: The above chart shows from March to April the

Infosys Technologies Ltd share price has been decreased by Rs.330.8, from April to May it has

been decreased by Rs.114.1. From March to April the TCS Ltd share price has been decreased

by Rs.18.9, from April to May it has been decreased by Rs.4.8. From March to April the Wipro

Ltd share price has been decreased by Rs.28.05, from April to May it has been decreased by

Rs.3.6.

METAL, METAL PRODUCT AND MINING STOCKS

The following chart shows the fluctuation in the share market price in METAL, METAL

PRODUCT AND MINING SECTOR

INTERPERTATION: The above chart shows from March to April the

Hindalco Industries Ltd share price has been increased by Rs.6.9, from April to May it has been

decreased by Rs.18.45. From March to April the Jindal and Power Steel Ltd share price has been

decreased by Rs.45.4 and from April to May it has been decreased by Rs.3.65. From March to

April the Sterlite Industries Ltd share price has been increased by Rs.7.7 and from April to May

it has been decreased by Rs.9.5. From March to April the Tata Steel Ltd share price has been

decreased by Rs.5.75 and from April to May it has been decreased by Rs.25.65.

OIL AND GAS STOCKS

The following chart shows the fluctuation in the share market price in OIL AND GAS SECTOR

INTERPRETATION: The above chart shows from March to April the ONGC Ltd share price

has been increased by Rs.18.8, from April to May it has been decreased by Rs.27.3. From March

to April the Reliance Industries Ltd share price has been decreased by Rs.65.85 and from April

to May it has been decreased by Rs.30.2.

TRASPORT EQUIPMENTS

The following chart shows the fluctuation in the share market price in TRANSPORT

EQUIPMENT SECTOR

INTERPRETATION: The above chart shows from March to April the Bajaj Auto Ltd share

price has been increased by Rs.14.20, from April to May it has been decreased by Rs.129.65.

From March to April the Hero Honda Ltd share price has been increased by Rs.123.10 and from

April to May it has been increased by Rs.143.50. From March to April the Mahindra and

Mahindra Ltd share price has been increased by Rs.55.2 and from April to May it has been

decreased by Rs.81.65. From March to April the Maruti

Suzuki India Ltd share price has been increased by Rs.56.20 and from April to May it has been

decreased by Rs.92.25. From March to April the Tata Motors Ltd share price has been decreased

by Rs.18.40 and from April to May it has been decreased by Rs.136.60.

POWER

The following chart shows the fluctuation in the share market pricein POWER SECTOR

INTERPRETATION: The above chart shows from March to April the NTPC Ltd share price

has been decreased by Rs.11.05, from April to May it has been decreased by Rs.13. From March

to April the Reliance Infrastructure Ltd share price has been decreased by Rs.30.07 and from

April to May it has been increased by Rs.87.8. From March to April the Tata Power Company

Ltd share price has been decreased by Rs.29.30 and from April to May it has been increased by

Rs.68.45.

Price Movement of Selected Companies and Calculated Beta of Stocks.

Companies Standard

deviation

Alpha Beta correlation

SBI -0.27% 0.02 1.2 0.68

HDFC bank 0.18% 0.01 1.07 0.18

Infosys Technology

Returns

-0.17% 0.02 0.99 0.60

TCS Returns 0.05% 0.02 1.12 0.73

Jindal Returns -0.06% 0.01 0.87 0.66

Tata Steel -0.12% 0.01 1.02 0.76

Maruti Suzuki -0.09% 0.02 0.90 0.57

Tata Motors -0.07% 0.02 1.32 0.67

Bharti Airtel 0.17% 0.02 0.63 0.45

Reliance

communications

-0.01% 0.03 1.08 0.45

ANALYSIS:

STATE BANK OF INDIA:

In the above table shows the volatility of SBI bank since the beta of the company is high, so it highly volatile. The Coefficient of Correlation is positive. It means when market return increase, the company’s return also increases.

Volatility in SBI returns

HDFC BANK:

The above table shows the volatility of HDFC bank. Since the beta of the company is high, then it is highly volatile. The coefficient of correlation of the company is positive. It means that market return increases, the company’s return also increases.

Volatility in HDFC bank returns

TCS

The above table shows the volatility of TCS Return. Since the beta of the company is high, then it is highly volatile. The Coefficient ofCorrelation of the company is positive. It means that when market return increases, the company’s return also increases.

Volatility in TCS returns

JINDAL:

The above table shows the volatility of Jindal Steel return. Since the Beta is less than 1, then it is less volatile. The Coefficient of Correlation of the company is positive. It means that when market return increases, the company’s return also increases.

Volatility in Jindal returns

TATA STEEL:

The above table shows the volatility of Tata Steel return. Since the beta of the company is high, then it is highly volatile. The Coefficient ofCorrelation of the company is positive. It means that when market return increases, the company’s return also increases.

Volatility in Tata Steel returns

MARUTI SUZUKI

The above table shows the volatility of Maruti Suzuki. Since the Beta of the company is less, then it is less volatile. The Coefficient of Correlation of the company is positive. It means that when the market return increases, the company’s return also increases.

Volatility in Maruti Suzuki returns

TATA MOTORS:

The above table shows the Tata Motors Returns. Since the Beta of Tata Motors is more than 1, then it is highly volatile. The Coefficient of Correlation of the company is positive. It means that when the market return increases, the company’s return also increases.

Volatility in Tata Motors returns

BHARTI AIRTEL:

The above table shows the Bharti Airtel returns. Since the Beta is less than 1, then it is less volatile. The Coefficient of Correlation of the company is positive. It means that when the market return increases, the company’s return also increases.

Volatility in Bharti Airtel returns

RELIANCE COMMUNICATIONS:

The above table shows the Reliance Communication returns. Since the Beta of the company is more than 1, then it is highly volatile. The Coefficient of Correlation of the company is positive. It means that when the market return increases, the company’s return also increases.

Volatility in Reliance Communications returns

FINDINGS:

The main factors which affected the stock market:

March:

After two months of correction, the Indian markets bounced back smartly in March 2011 to end

the month with robust gains. The BSE Sensex surged 9.1% respectively in the month. The

markets started off the month on a positive note on the back of positive announcements from

the Union Budget, expansion in the manufacturing sector and in line GDP growth in

Q3FY11, but witnessed correction in the middle of the month, on the back of tension in Middle

East and North Africa region and a major earthquake in Japan. However, the indices

bounced back smartly in the fourth & fifth week on the back of positive comments from

Warren Buffet on the Indian economy, easing food inflation & the decline in India’s trade

deficit during April-Feb 2011.

April:

After a bounce in March 2011, month the Indian markets ended the month of April 2011

registering a marginal decline. The BSE Sensex dropped by 1.5% in this month. The markets

started the month on a positive note rising for two consecutive weeks on the back of better

foreign inflows and easing crude prices coupled with expectations of a normal monsoon.

However in the third week, the Sensex dropped on the back of some profit booking pulling

back some of the the rise in the first two weeks. The index witnessed a pull back in the fourth

week due to rising foreign inflows. However in the last week the indices dropped due to

concerns relating to higher inflation, which sparked a sell-off by foreign players.

May:

The Indian markets ended the month of May 2011 on a disappointing note, thus reporting second

straight month of decline. The BSE Sensex dropped by 3.3% each in the month. GDP

downgrades, fears of further hike in interest rate to tame the rising inflation and the

Government announcement on possibility of missing the revenue collection targets during

FY12 were some of the major reasons for the market underperformance during the month. The

fall could have been much more steeper but a smart pullback towards the end of the month

restricted further fall in the indices. The main reason was the aggressive monetary tightening by

the RBI to tame the inflation. Further, the India Meteorological Department (IMD) predicted the

southwest monsoon 2011 to be 98% (normal) of the long period average (LPA) & the annual

monsoon rains hit Kerala two days earlier than expected. This boosted the market sentiment.

Comparative study on different sectors

March:

All the sectoral indices ended the month of March with robust gains. Auto, Banks & Consumer

Durables were the top three gainers, which rose by 17.9%, 12.6%, 12.3% & 10.8% respectively.

The other indices like Oil & Gas, IT, Capital Goods, Healthcare, Metals & FMCG reported

single digit gains in the range of 4-9%, with FMCG gaining the least by 4.8%.

April:

The sectoral indices exhibited mixed reactions during the month of April 2011. FMCG, Health

care, and Auto were the top three gainers, which rose by 4.4%, 3.5% & 2% respectively. On the

other hand Realty, IT and Oil & Gas indices were amongst the major losers with each losing

6.7%, 6.2% and 2.3% respectively.

May:

The sectoral indices ended the month of May on a mix note. Oil & Gas, IT & Metals were the

top three losers, which fell by 6.6%, 5.4% & 4.8% respectively. Even Auto, Banks and Power

ended the month on a weak note, down by 4.1%, 4.1%, 4% and 2.4% respectively. Realty index

ended marginally lower by 0.1%. However, FMCG, Healthcare, Consumer Durables & Capital

Goods were the top three gainers, which rose 2.7%, 2.6%, 2.4% & 0.4% respectively.

Suggestions:

The golden principle in the market is “Buy when everyone else sells and sells when

everyone else buys”. Because if there are more seller than buyer of stocks then the supply

of stocks is greater than the demand for stock thus stock price will fall down. Then

investor buy stock in this situation, the demand for their stock will rise if the demand of

the shares increase automatically price of the securities will be increased. It follows the

law of demand and supply.

Over a short term stock market will always remain volatile; it is “Investment” the better

option against “Trading”. One can find “Investing over a long period yields good return

in stock market, rather than trading for short-term capital gain”. Trading may leads to

“capital loss”. So invest wisely. Hope my project guides investors in a proper way in

stock market.

While playing with stocks investor must be in safer side that means investors do not

invest in securities by taking loans, credit, etc. from bank, friends, relatives etc.

Choose investment wisely. Don’t chase after fads. If investors feel like selling, the market

doing badly, investor should probably consider buying and if investors feel like buying

(the market is doing well) investor should probably consider selling. No one can buy a

stock and make money without doing proper work. Find a company with a great product.

Products which have enough evidence to suggest shall click.

In common sense investors entrusts his money in some good companies that put money

to good use. Good companies will use money in effective ways to produce more wealth.

One of the best ways to identify good company is to look at their Return on equity, which

is essentially a measure of how will they create profits using shareholders investments.

Some of best advices to lower the risk are mentioned below:-

Do not put more than 10% of your money into any one stock.

Buy stock with consistent and predictable earnings growth.

Use stop-loss order to limit your risk.

Conclusion:

CODE NAME SECTOR

500103 Bharat Heavy Electricals

Ltd.

Capital Goods

500510 Larsen & Turbo Limited Capital Goods

500010 HDFC Finance

500180 HDFC Bank Ltd. Finance

532174 ICICI Bank Ltd Finance

500112 State Bank of India Finance

500696 Hindustan Unilever Ltd. FMCG

500875 ITC Ltd. FMCG

500087 Cipla Ltd. Healthcare

532868 DLF Ltd. Housing Related

532532 Jaiprakash Associates Ltd.

Housing Related

500209 Infosys Technologies Ltd. Information Technology

532540Tata Consultancy Services Limited

Information Technology

507685 Wipro Ltd. Information Technology

500440 Hindalco Industries Ltd. Metal, Metal Products & Mining

532286 Jindal Steel & Power Ltd. Metal, Metal Products & Mining

500900 Sterlite Industries (India) Ltd.

Metal, Metal Products & Mining

500470 Tata Steel Ltd. Metal, Metal Products & Mining

500312 ONGC Ltd. Oil & Gas

500325 Reliance Industries Ltd. Oil & Gas

532555 NTPC Ltd. Power

500390 Reliance Infrastructure Ltd.

Power

500400 Tata Power Company Ltd. Power

532454 Bharti Airtel Ltd. Telecom

532454 Reliance Communications Limited

Telecom

532977 Bajaj Auto Limited Transport Equipments

500182 Hero Honda Motors Ltd. Transport Equipments

500520 Mahindra & Mahindra Transport Equipments

Ltd.

532500 Maruti Suzuki India Ltd. Transport Equipments

500570 Tata Motors Ltd. Transport Equipments

Glossary:

Arbitrage

The business of taking advantage of difference in price of a security traded on two or more stock exchanges, by buying in one and selling in the other (or vice versa). Quite simply it means you try to buy something cheap in one place, to make a profit selling it somewhere else. Given the speed at which the financial markets now operate, in practice the simultaneous purchase of foreign exchange, securities, commodities or any other financial instrument in one market and the sale in another at a higher price.

American Depository Receipt (ADR)

A stock representing a specified number of shares in a foreign corporation. ADR's are bought and sold in the American markets just like regular stocks. An ADR is issued by a U.S. Bank, consisting of a bundle of shares of a foreign corporation that are being held in custody overseas. The foreign entity must provide financial information to the sponsor bank. ADR's are listed on the NYSE, AMEX, or NASDAQ.

Averaging

The process of gradually buying more and more securities in a declining market (or selling in a rising market) in order to level out the purchase (or sale) price

Arbitration

Settlement of claims differences or disputes between one member and another and between a member and his clients, authorized clerks, sub-brokers etc., through appointed arbitrators.

BearsThese stock market animals are pessimists, they expect share prices or any other type of investment to fall. In a 'bear market' the general sentiment is that prices are going to go lower and majority of dealers will sell as quickly as possible for fear of holding shares which diminish in value. Bears, like 'bulls' drive the market.

Badla

Carrying forward of transaction form one settlement period to the next without effecting delivery or payment. Badla involves carrying forward of a transaction from one settlement period to the next. The carry-forward is done at the making up price, which is usually the closing price of the last day of settlement.

Bonus

A free allotment of shares made in proportion to existing shares out of accumulated reserves. A bonus share does not constitute additional wealth to shareholders. It merely signifies recapitalization of reserves into equity capital. However, the expectation of bonus shares has a bullish impact on market sentiment and causes share prices to go up.

Bull

A bull is one who expects a rise in price so that he can later sell at a higher price.

Bull Market

Bull market is a rising market with abundance of buyers and few sellers.

Base Price

This is the price of a security at the beginning of the trading day which is used to determine the Day Minimum/Maximum and the Operational ranges for that day.

Bid and offer

Bid is the price at which the market maker buys from the investor and offer is the price at which he offers to sell the stock to the investor. The offer is higher than the bid.

Brokerage

Brokerage is the commission charged by the broker. The maximum brokerage chargeable is determined by SEBI.

Basket Trading

Basket trading is a facility by which investors are in a position to buy/sell all 30 scrips of Sensex in the proportion of current weights in the Sensex, in one go.

Beta

It is a standard measure of risk for an individual stock. It is the sensitivity of the movement of the past share price of a stock to the movement of the market as a whole. The beta of the market is taken as 1. A benchmark index (the Sensex, for instance) is taken as the proxy for the market.

Correction

Temporary reversal of trend in share prices. This could be a reaction (a decrease following a consistent rise in prices) or a rally (an increase following a consistent fall in prices).

Closing Price

The trade price of a security at the end of a trading day. Based on the closing price of the security, the base price at the beginning of the next trading day is calculated.

Counterparty

When a trading member enters an order, any other trading member with an order on the opposite side is referred to as the counterparty.

Call OptionThis is the right, but not the obligation, to purchase shares at a specified price at a specified date in the future. See Options.For this privilege, the buyer pays a premium which would be

a fraction of the price of the underlying security. You are gambling that the share price will rise above the option price. If this happens you can buy the shares and sell them immediately for a profit.If the share price does not rise above your option price, you do not exercise the option and it expires - all you have lost is the initial payment made to purchase the option.

CallThe demand by a company or any other issuer of shares for payment. It may be the demand for full payment on the due date, such as, for example, with a rights issue. It may, alternatively, be the demand for a further payment when the total amount is payable by instalments.The calls are usually made several months apart by call letter and the shares are said to be paid-up when the final call has been paid. A call by a company should not be confused with a call option.

DividendThis is the income you receive as a shareholder from a company. When you buy an ordinary share in a company, you become a shareholder (an owner of the business) and to that extent you will have certain entitlements including the right to receive dividend payments as set by the board of directors and approved by the shareholders (sometimes called members.)A dividend is a cut of the profits earned by the business for the year. This pay-out is not guaranteed and where it exists at all, the amount you'll receive will vary from company to company and year to year.

Day TradingDay trading is the buying and selling of stocks during the trading day by individuals known as day traders on their own account. The aim is to make a profit on the day and have no open positions at the close of the trading session, the day.

Demat trading

Demat trading is trading of shares that are in the electronic form or dematerialised shares. Dematerialisation is the process by which shares in the physical form are cancelled and credit in the form of electronic balances are maintained on highly secure systems at the depository

Date of paymentDate on which dividend cheques are mailed.

Efficient capital market :-A market in which all the players have all the material information at their disposal at the same time.

FuturesA contract for the purchase and sale of a commodity, financial instrument or index at a fixed price at a fixed date in the future. Futures contracts were originally invented to allow those who regularly buy and sell goods to protect themselves against future changes in the price of those goods. In other words, the futures markets evolved to allow producers or consumers to hedge their risk.

Floating Stock

The fraction of the paid-up equity capital of a company which normally participates in day to day trading.

Foreign Institutional Investor (FII)

An overseas institutional investor permitted under Securities and Exchange Board of India (SEBI) guidelines to trade in Indian bourses.

Global Depositary Receipt (GDR)These are negotiable certificates which prove ownership of a company's shares.They are marketed internationally, mainly to financial institutions. GDRs allow purchasers to gain exposure to companies which are listed on foreign markets without having to purchase the shares directly in the market in which they are listed.

Grey marketTrading in shares outside a recognized market.This has come to mean trading in shares ahead of their issue on the stockmarket.

Hedging

Offsetting or guarding against investment risk. A perfect hedge is a no-risk-no gain precaution.A conservative strategy for reduction of risk through futures, options or some other derivative, by opening an opposite position to that already held in the underlying market. Taking positions in securities so that each offsets the other.

Issuing houseThis is a member of the Issuing Houses Association, responsible for sponsoring the issue of a new security on the Stock Exchange or an over the counter market.The definition has also spread to include any merchant bank or dealer in securities which is involved in such an issue.The issuing house will have been closely involved in the process leading up to the flotation and will have advised the company on its timing, pricing, etc.

Jobbers

Member brokers of a stock exchange who specialise in buying and selling of specific securities from and to fellow members. Jobbers do not have any direct contact with the public, but they render a useful function of imparting liquidity to the market. A jobber quotes his ‘bid’ price (the price at which he is willing to buy) and ‘ask’ price (the price at which he is willing to sell ).

Listed Company

A public limited company which satisfies certain listings conditions and signs a listing agreement wit the stock exchange for trading in it securities. One important listing condition is that 25% of its issued capital should be offered to the public.

Market capitalization

Market capitalisation is the market value of the equity of a company.Simply put, it is the number of outstanding shares multiplied by the market price of the company. The total market value at the current stock exchange list prices of the total number of equity shares issued by company It is also the currency which can be used in case of acquisitions (in terms of stock swaps).

Margin

The amount a buyer/seller of a futures contractor an uncovered (naked) option seller (writer) is required to deposit and maintain to cover his daily position valuation and reasonably foreseeable intra day price changes.

Nasdaq

National Association of Securities Dealers Automatic Quotation SystemAn American stock exchange. It’s also known as the technology heaven for companies in that category.

Odd Lot market

The market in which odd lot orders are recorded. Odd Lot orders have a quantity less than one regular lot. A number of shares that are less than the market lot are known as odd lots. These shares are illiquid in nature, as they cannot be transacted on the Exchange.

Open

A time period in the trading day for the different markets that the exchange deals in. Order entry, matching, inquiries and other functions at the workstation will be allowed during this period.

Options

The holder of an option contract has the right but not the obligation to buy (call option) or sell (put option) a specific quantity of a given asset at a specified price at or before a specified date in the future. The purchaser pays a non-refundable, one time fee (option premium) to the seller (writer) to acquire this right. If the holder chooses to exercise the right to buy or sell the asset, the writer of the option has to deliver or take delivery of the asset. The potential loss to the option writer is therefore unlimited.

Print/Report Circuit

This is a virtual circuit through which the system can download report data to all workstations. In this mode, the system does not await the response from the workstations.

Put OptionThe right to sell stock at an agreed price at or before a stated future time. Contrast this will call options.

Rolling SettlementThis is the system by which shares are bought, sold and paid for. Rolling Settlements is a mechanism of settling trades. in Rolling Settlements, trades done on a single day are settled separately from the trades of other day on Trade day + 5 days. As such netting of trades is done only for the day and not for multiple days. As such, in Rolling Settlement, settlement is carried out on a daily basis.

Real Interest Rate

Current interest rate less the rate of inflation.

Stag

A stag is an investor or speculator who subscribes to a new issue with the intention of selling them soon after allotment to realise a quick profit.

secondary MarketThe market in existing securities provided by the Stock Exchange.The secondary market, by providing a method of buying and selling securities, overcomes the basic mis-match between the needs of savers/investors who provide new money and the requirements of capital raisers/borrowers.

SettlementThe payment of cash for securities and, conversely, the delivery of securities against payment - the conclusion of a securities transaction by delivery. Settlement is the payment or receipt of an outstanding due at the end of the settlement period.

Security

A Security is a valid and unique combination of Symbol and Series. Securities are traded in the Capital Market. Shares and Debentures are some examples of securities.

stock

A type of security that signifies ownership in a corporation and represents a claim on part of the corporation's assets and earnings. 

Trade

When a buy order matches with a sell order following the price-time priority logic, a trade takes place. The system generates a unique trade number for each trade

Trading Member

It refers to a member of the BSE/NSE who is authorised to place orders in the Capital Market System. The term Broker or Brokerage house is also used to convey the same meaning.

Underwrite

Under writing is effectively a guarantee wherein the underwriter (usually a bank, broker or financial institution) agrees to purchase a certain number of shares in the event the issue is under-subscribed for a certain fee.

Volatility

The rate by which the price of a security fluctuates in changing market conditions.

Wash Sale

In a wash sale, the seller repurchases the security immediately. The purpose of a wash sale, which is not a genuine sale, is merely to establish a record of sale for tax purposes or for misleading others by creating a false impression of rise or fall in prices.