Stock Market Tips

What is Security

noreply@blogger.com (ASTHA SRIVASTAVA) — Tue, 29 May 2012 16:38:00 +0000

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.

What is mutual fund

noreply@blogger.com (ASTHA SRIVASTAVA) — Tue, 29 May 2012 16:37:00 +0000

An open-ended fund operated by an investment company which raises money from shareholders and invests in a group of assets, in accordance with a stated set of objectives. mutual funds raise money by selling shares of the fund to the public, much like any other type of company can sell stock in itself to the public. Mutual funds then take the money they receive from the sale of their shares (along with any money made from previous investments) and use it to purchase various investment vehicles, such as stocks, bonds and money market instruments. In return for the money they give to the fund when purchasing shares, shareholders receive an equity position in the fund and, in effect, in each of its underlying securities. For most mutual funds, shareholders are free to sell their shares at any time, although the price of a share in a mutual fund will fluctuate daily, depending upon the performance of the securities held by the fund. Benefits of mutual funds include diversification and professional money management. Mutual funds offer choice, liquidity, and convenience, but charge fees and often require a minimum investment. A closed-end fund is often incorrectly referred to as a mutual fund, but is actually an investment trust.

What is stock

noreply@blogger.com (ASTHA SRIVASTAVA) — Tue, 29 May 2012 16:37:00 +0000

A stock (also known as an equity or a share) is a portion of the ownership of a corporation. A share in a corporation gives the owner of the stock a stake in the company and its profits. If a corporation has issued 100 stocks in total, then each stock represents a 1% ownership in the company.

What is equity

noreply@blogger.com (ASTHA SRIVASTAVA) — Tue, 29 May 2012 16:36:00 +0000

An equity (also known as an share or stock ) is a portion of the ownership of a corporation. A share in a corporation gives the owner of the stock a stake in the company and its profits. If a corporation has issued 100 stocks in total, then each stock represents a 1% ownership in the company.

What is Share

noreply@blogger.com (ASTHA SRIVASTAVA) — Tue, 29 May 2012 16:35:00 +0000

A Share (also known as an equity or a share) is a portion of the ownership of a corporation. A share in a corporation gives the owner of the stock a stake in the company and its profits. If a corporation has issued 100 stocks in total, then each stock represents a 1% ownership in the company.

Who is investor

noreply@blogger.com (ASTHA SRIVASTAVA) — Tue, 29 May 2012 16:34:00 +0000

An individual who commits money to investment products with the expectation of financial returns. Generally, the primary concern of an investor is to minimize risk while maximizing return, as opposed to aspeculator, who is willing to accept a higher level of risk in the hopes of collecting higher-than-average profits.

Types of investor

accredited investor
retail investor
lead investor
passive investor
institutional investor
qualified institutional investor

What is speculation

noreply@blogger.com (ASTHA SRIVASTAVA) — Tue, 29 May 2012 16:33:00 +0000

Taking large risks, especially with respect to trying to predict the future; gambling, in the hopes of making quick, large gains.

Retail investor

noreply@blogger.com (ASTHA SRIVASTAVA) — Tue, 29 May 2012 16:33:00 +0000

An individual who purchases small amounts of securities for him/herself, as opposed to an institutional investor. also called individual investor or small investor.

Blue Chip Stock

noreply@blogger.com (ASTHA SRIVASTAVA) — Tue, 29 May 2012 16:32:00 +0000

Blue chip stock is equity in the securities of high quality companies. Blue chip stock is often also high in public share price. Blue chip stock is a term named after the blue-colored highest poker chip denomination. Stock of “blue chips” or “blue chip stock” demonstrate some combination of high credit rating, strong balance sheet, stable earnings power.

Blue chip stock is often found in conservative investors and retirement portfolios.

Volatility for blue chip stock is typically lower than that of lesser known, more thinly traded stocks.

Value Investing

noreply@blogger.com (ASTHA SRIVASTAVA) — Tue, 29 May 2012 16:31:00 +0000

Value investing is an investment technique where one buys shares that are believed to be undervalued in hopes that the true (higher) value of the stock will be realized. Therefore, value investing requires more of a long-term outlook.
Someone who believes the market overreacts to good and bad news, which can cause stocks to be traded at less than they're worth, might be more prone to value investing. Those who engage in value investing get out when they think the market has corrected the price.

To determine if a stock in undervalued, investors who opt for value investing typically look for low price-to-earnings ratios and low price-to-book values.

Value investing is not as focused on technical analysis as it is on the stock's fundamentals.
This means that value investing examines the stock's current market value and the company's intrinsic value.

What is technical analysis?

noreply@blogger.com (ASTHA SRIVASTAVA) — Tue, 29 May 2012 16:31:00 +0000

Technical analysis is all about studying stock price graphs and a few momentum oscillators derived thereof. It must be understood that technical studies are based entirely on prices and do not include balance sheets, P&L accounts (fundamental analysis), the assumption being that the markets are efficient and all possible price sensitive information is built into the price graph of a security / index.

Therefore, technical analysis supports the efficient market theory as against the "random walk theory" which supports the belief that stocks can be bought / sold on random events like flipping a coin!!! Technical analysis is more dynamic as compared to fundamental analysis based on one simple argument - fundamental analysts depend on corporate events like quarterly results and special announcements like earnings guidance and policy changes in operations to generate a buy / sell recommendation.

Fundamental Analysis:

noreply@blogger.com (ASTHA SRIVASTAVA) — Tue, 29 May 2012 16:30:00 +0000

A method of security valuation which involves examining the company's financials and operations, especially sales, earnings, growth potential, assets, debt, management, products, and competition. Fundamental analysis takes into consideration only those variables that are directly related to the company itself, rather than the overall.

What is demat account?

noreply@blogger.com (ASTHA SRIVASTAVA) — Tue, 29 May 2012 16:29:00 +0000

Demat refers to a dematerialised account.
Just as you have to open an account with a bank if you want to save your money, make cheque payments etc, you need to open a demat account if you want to buy or sell stocks. So it is just like a bank account where actual money is replaced by shares. You have to approach the DPs (remember, they are like bank branches), to open your demat account.

What is future

noreply@blogger.com (ASTHA SRIVASTAVA) — Tue, 29 May 2012 16:29:00 +0000

A standardized, transferable, exchange-traded contract that requires delivery of a commodity, bond, currency, or stock index, at a specified price, on a specified future date. Unlike options, futures convey an obligation to buy. The risk to the holder is unlimited, and because the payoff pattern is symmetrical, the risk to the seller is unlimited as well. Dollars lost and gained by each party on a futures contract are equal and opposite. In other words, futures trading is a zero-sum game. Futures contracts are forward contracts, meaning they represent a pledge to make a certain transaction at a future date. The exchange of assets occurs on the date specified in the contract. Futures are distinguished from generic forward contracts in that they contain standardized terms, trade on a formal exchange, are regulated by overseeing agencies, and are guaranteed by clearinghouses. Also, in order to insure that payment will occur, futures have a margin requirement that must be settled daily. Finally, by making an offsetting trade, taking delivery of goods, or arranging for an exchange of goods, futures contracts can be closed. Hedgers often trade futures for the purpose of keeping price risk in check. also called futures contract.

Definition

noreply@blogger.com (ASTHA SRIVASTAVA) — Tue, 29 May 2012 16:28:00 +0000

Debenture

A bond issued by a company, paying a fixed rate of interest and usually secured on an asset.

What is IPO?

Initial public offering(IPO): a corporation's first offer to sell stock to the public.

What are Derivatives?

The term "Derivative" indicates that it has no independent value, i.e. its value is entirely "derived" from the value of the underlying asset. The underlying asset can be securities, commodities, bullion, currency, live stock or anything else. In other words, Derivative means a forward, future, option or any other hybrid contract of pre determined fixed duration, linked for the purpose of contract fulfillment to the value of a specified real or financial asset or to an index of securities.

With Securities Laws (Second Amendment) Act,1999, Derivatives has been included in the definition of Securities. The term Derivative has been defined in Securities Contracts (Regulations) Act, as:-

A Derivative includes: -
a security derived from a debt instrument, share, loan, whether secured or unsecured, risk instrument or contract for differences or any other form of security;
a contract which derives its value from the prices, or index of prices, of underlying securities;

What is Depository Participant (DP)

noreply@blogger.com (ASTHA SRIVASTAVA) — Tue, 29 May 2012 16:25:00 +0000

In India, a Depository Participant (DP) is described as an agent of the depository. They are the intermediaries between the depository and the investors. The relationship between the DPs and the depository is governed by an agreement made between the two under the Depositories Act. In a strictly legal sense, a DP is an entity who is registered as such with SEBI under the provisions of the SEBI Act. As per the provisions of this Act, a DP can offer depository-related services only after obtaining a certificate of registration from SEBI.

About NSE

noreply@blogger.com (ASTHA SRIVASTAVA) — Tue, 29 May 2012 11:46:00 +0000

The National Stock Exchange (NSE) is a stock exchange located at Mumbai, India. It is the 16th largest stock exchange in the world by market capitalization and largest in India by daily turnover and number of trades, for both equities and derivative trading. NSE has a market capitalization of around US$985 billion and over 1,646 listings as of December 2011.Though a number of other exchanges exist, NSE and the Bombay Stock Exchange are the two most significant stock exchanges in India, and between them are responsible for the vast majority of share transactions. The NSE's key index is the S&P CNX Nifty, known as the NSE NIFTY (National Stock Exchange Fifty), an index of fifty major stocks weighted by market capitalisation.

NSE is mutually owned by a set of leading financial institutions, banks, insurance companies and other financial intermediaries in India but its ownership and management operate as separate entities.There are at least 2 foreign investors NYSE Euronext and Goldman Sachs who have taken a stake in the NSE. As of 2006, the NSE VSAT terminals, 2799 in total, cover more than 1500 cities across India. NSE is the third largest Stock Exchange in the world in terms of the number of trades in equities It is the second fastest growing stock exchange in the world with a recorded growth of 16.6%.

Origins

The National Stock Exchange of India was set up by Government of India on the recommendation of Pherwani Committee in 1991.Promoted by leading Financial institutions essentially led by IDBI at the behest of the Government of India, it was incorporated in November 1992 as a tax-paying company. In April 1993, it was recognized as a stock exchange under the Securities Contracts (Regulation) Act, 1956. NSE commenced operations in the Wholesale Debt Market (WDM) segment in June 1994. The Capital market (Equities) segment of the NSE commenced operations in November 1994, while operations in the Derivatives segment commenced in June 2000.

Markets

Currently, NSE has the following major segments of the capital market:

Equity
Futures and options
Retail debt market
Wholesale debt market
Currency futures
Mutual fund
Stocks lending and borrowing

In August 2008 currency derivatives were introduced in India with the launch of Currency Futures in USD INR by NSE. Currently it has also launched currency futures in euros, pounds and yen. Interest Rate Futures were introduced for the first time in India by NSE on 31 August 2009, exactly one year after the launch of Currency Futures.

NSE became the first stock exchange to get approval for interest rate futures, As recommended by SEBI-RBI committee, on 31 August 2009, a futures contract based on 7% 10 Year Government of India (Notional) was launched with quarterly maturities.

Hours

NSE's normal trading sessions. 9:15 AM TO 3:15(3:30)pm

Stock Exchange

noreply@blogger.com (ASTHA SRIVASTAVA) — Tue, 29 May 2012 11:43:00 +0000

A stock exchange is a form of exchange which provides services for stock brokers and traders to trade stocks, bonds, and other securities. Stock exchanges also provide facilities for issue and redemption of securities and other financial instruments, and capital events including the payment of income and dividends. Securities traded on a stock exchange include shares issued by companies, unit trusts, derivatives, pooled investment products and bonds.

To be able to trade a security on a certain stock exchange, it must be listed there. Usually, there is a central location at least for record keeping, but trade is increasingly less linked to such a physical place, as modern markets are electronic networks, which gives them advantages of increased speed and reduced cost of transactions. Trade on an exchange is by members only.

The initial offering of stocks and bonds to investors is by definition done in the primary market and subsequent trading is done in the secondary market. A stock exchange is often the most important component of a stock market. Supply and demand in stock markets are driven by various factors that, as in all free markets, affect the price of stocks (see stock valuation).

There is usually no compulsion to issue stock via the stock exchange itself, nor must stock be subsequently traded on the exchange. Such trading is said to be off exchange or over-the-counter. This is the usual way that derivatives and bonds are traded. Increasingly, stock exchanges are part of a global market for securities.

Securities And Exchange Board Of India

noreply@blogger.com (ASTHA SRIVASTAVA) — Tue, 29 May 2012 11:33:00 +0000

History

It was formed officially by the Government of India in 1992 with SEBI Act 1992 being passed by the Indian Parliament. SEBI is headquartered in the business district of Bandra Kurla Complex complex in Mumbai, and has Northern, Eastern, Southern and Western regional offices in New Delhi,Kolkata, Chennai and Ahmedabad.

Controller of Capital Issues was the regulatory authority before SEBI came into existence; it derived authority from the Capital Issues (Control) Act, 1947.

Initially SEBI was a non statutory body without any statutory power. However in 1995, the SEBI was given additional statutory power by the Government of India through an amendment to the Securities and Exchange Board of India Act 1992. In April, 1998 the SEBI was constituted as the regulator of capital markets in India under a resolution of the Government of India.

The SEBI is managed by fix members, i.e. by the chairman who is nominated by central government & members, i.e. officers of central ministry, one member from the RBI & the remaining two are nominated by the central government. The office of SEBI is situated at Mumbai with its regional offices at Kolkata, Delhi & Chennai.

Functions and responsibilities

SEBI has to be responsive to the needs of three groups, which constitute the market:

the issuers of securities
the investors
the market intermediaries.

SEBI has three functions rolled into one body: quasi-legislative, quasi-judicial and quasi-executive. It drafts regulations in its legislative capacity, it conducts investigation and enforcement action in its executive function and it passes rulings and orders in its judicial capacity. Though this makes it very powerful, there is an appeals process to create accountability. There is a Securities Appellate Tribunal which is a three-member tribunal and is presently headed by a former Chief Justice of a High court - Mr. Justice NK Sodhi. A second appeal lies directly to the Supreme Court.

SEBI has enjoyed success as a regulator by pushing systemic reforms aggressively and successively (e.g. the quick movement towards making the markets electronic and paperless rolling settlement on T+2 basis). SEBI has been active in setting up the regulations as required under law.

SEBI has also been instrumental in taking quick and effective steps in light of the global meltdown and the Satyam fiasco. increased the extent and quantity of disclosures to be made by Indian corporate promoters. More recently, in light of the global meltdown,it liberalised the takeover code to facilitate investments by removing regulatory structures. In one such move, SEBI has increased the application limit for retail investors to Rs 2 lakh, from Rs 1 lakh at present.

Powers

For the discharge of its functions efficiently, SEBI has been invested with the necessary powers which are:

1. to approve by−laws of stock exchanges.

2. to require the stock exchange to amend their by−laws.

3. inspect the books of accounts and call for periodical returns from recognised stock exchanges.

4. inspect the books of accounts of a financial intermediaries.

5. compel certain companies to list their shares in one or more stock exchanges.

6. levy fees and other charges on the intermediaries for performing its functions.

7. grant licence to any person for the purpose of dealing in certain areas.

8. delegate powers exercisable by it.

9. prosecute and judge directly the violation of certain provisions of the companies Act.

SEBI Committees

1. Technical Advisory Committee

2. Committee for review of structure of market infrastructure institutions

3. Members of the Advisory Committee for the SEBI Investor Protection and Education Fund

4. Takeover Regulations Advisory Committee

5. Primary Market Advisory Committee (PMAC)

6. Secondary Market Advisory Committee (SMAC)

7. Mutual Fund Advisory Committee

8. Corporate Bonds & Securitization Advisory Committee

9. Takeover Panel

10. SEBI Committee on Disclosures and Accounting Standards (SCODA)

11. High Powered Advisory Committee on consent orders and compounding of offences

12. Derivatives Market Review Committee

13. Committee on Infrastructure Funds

Mutual Fund vs ULIP

noreply@blogger.com (ASTHA SRIVASTAVA) — Tue, 29 May 2012 11:28:00 +0000

Unit Linked Insurance Policies (ULIPs) as an investment avenue are closest to mutual funds in terms of their structure and functioning. As is the case with mutual funds, investors in ULIPs are allotted units by the insurance company and a net asset value (NAV) is declared for the same on a daily basis.

Similarly ULIP investors have the option of investing across various schemes similar to the ones found in the mutual funds domain, i.e. diversified equity funds, balanced funds and debt funds to name a few. Generally speaking, ULIPs can be termed as mutual fund schemes with an insurance component.

However it should not be construed that barring the insurance element there is nothing differentiating mutual funds from ULIPs.

How ULIPs can make you RICH!

Despite the seemingly comparable structures there are various factors wherein the two differ.

In this article we evaluate the two avenues on certain common parameters and find out how they measure up.

1. Mode of investment/ investment amounts

Mutual fund investors have the option of either making lump sum investments or investing using the systematic investment plan (SIP) route which entails commitments over longer time horizons. The minimum investment amounts are laid out by the fund house.

ULIP investors also have the choice of investing in a lump sum (single premium) or using the conventional route, i.e. making premium payments on an annual, half-yearly, quarterly or monthly basis. In ULIPs, determining the premium paid is often the starting point for the investment activity.

This is in stark contrast to conventional insurance plans where the sum assured is the starting point and premiums to be paid are determined thereafter.

ULIP investors also have the flexibility to alter the premium amounts during the policy's tenure. For example an individual with access to surplus funds can enhance the contribution thereby ensuring that his surplus funds are gainfully invested; conversely an individual faced with a liquidity crunch has the option of paying a lower amount (the difference being adjusted in the accumulated value of his ULIP). The freedom to modify premium payments at one's convenience clearly gives ULIP investors an edge over their mutual fund counterparts.

2. Expenses

In mutual fund investments, expenses charged for various activities like fund management, sales and marketing, administration among others are subject to pre-determined upper limits as prescribed by the Securities and Exchange Board of India. For example equity-oriented funds can charge their investors a maximum of 2.5% per annum on a recurring basis for all their expenses; any expense above the prescribed limit is borne by the fund house and not the investors.

Similarly funds also charge their investors entry and exit loads (in most cases, either is applicable). Entry loads are charged at the timing of making an investment while the exit load is charged at the time of sale.

Insurance companies have a free hand in levying expenses on their ULIP products with no upper limits being prescribed by the regulator, i.e. the Insurance Regulatory and Development Authority. This explains the complex and at times 'unwieldy' expense structures on ULIP offerings. The only restraint placed is that insurers are required to notify the regulator of all the expenses that will be charged on their ULIP offerings.

Expenses can have far-reaching consequences on investors since higher expenses translate into lower amounts being invested and a smaller corpus being accumulated. ULIP-related expenses have been dealt with in detail in the article "Understanding ULIP expenses".

3. Portfolio disclosure

Mutual fund houses are required to statutorily declare their portfolios on a quarterly basis, albeit most fund houses do so on a monthly basis. Investors get the opportunity to see where their monies are being invested and how they have been managed by studying the portfolio.

There is lack of consensus on whether ULIPs are required to disclose their portfolios. During our interactions with leading insurers we came across divergent views on this issue.

While one school of thought believes that disclosing portfolios on a quarterly basis is mandatory, the other believes that there is no legal obligation to do so and that insurers are required to disclose their portfolios only on demand.

Some insurance companies do declare their portfolios on a monthly/quarterly basis. However the lack of transparency in ULIP investments could be a cause for concern considering that the amount invested in insurance policies is essentially meant to provide for contingencies and for long-term needs like retirement; regular portfolio disclosures on the other hand can enable investors to make timely investment decisions.

ULIPs vs Mutual Funds

	ULIPs	Mutual Funds
Investment amounts	Determined by the investor and can be modified as well	Minimum investment amounts are determined by the fund house
Expenses	No upper limits, expenses determined by the insurance company	Upper limits for expenses chargeable to investors have been set by the regulator
Portfolio disclosure	Not mandatory*	Quarterly disclosures are mandatory
Modifying asset allocation	Generally permitted for free or at a nominal cost	Entry/exit loads have to be borne by the investor
Tax benefits	Section 80C benefits are available on all ULIP investments	Section 80C benefits are available only on investments in tax-saving funds

* There is lack of consensus on whether ULIPs are required to disclose their portfolios. While some insurers claim that disclosing portfolios on a quarterly basis is mandatory, others state that there is no legal obligation to do so.

4. Flexibility in altering the asset allocation

As was stated earlier, offerings in both the mutual funds segment and ULIPs segment are largely comparable. For example plans that invest their entire corpus in equities (diversified equity funds), a 60:40 allotment in equity and debt instruments (balanced funds) and those investing only in debt instruments (debt funds) can be found in both ULIPs and mutual funds.

If a mutual fund investor in a diversified equity fund wishes to shift his corpus into a debt from the same fund house, he could have to bear an exit load and/or entry load.

On the other hand most insurance companies permit their ULIP inventors to shift investments across various plans/asset classes either at a nominal or no cost (usually, a couple of switches are allowed free of charge every year and a cost has to be borne for additional switches).

Effectively the ULIP investor is given the option to invest across asset classes as per his convenience in a cost-effective manner.

This can prove to be very useful for investors, for example in a bull market when the ULIP investor's equity component has appreciated, he can book profits by simply transferring the requisite amount to a debt-oriented plan.

5. Tax benefits

ULIP investments qualify for deductions under Section 80C of the Income Tax Act. This holds good, irrespective of the nature of the plan chosen by the investor. On the other hand in the mutual funds domain, only investments in tax-saving funds (also referred to as equity-linked savings schemes) are eligible for Section 80C benefits.

Maturity proceeds from ULIPs are tax free. In case of equity-oriented funds (for example diversified equity funds, balanced funds), if the investments are held for a period over 12 months, the gains are tax free; conversely investments sold within a 12-month period attract short-term capital gains tax @ 10%.

Similarly, debt-oriented funds attract a long-term capital gains tax @ 10%, while a short-term capital gain is taxed at the investor's marginal tax rate.

Despite the seemingly similar structures evidently both mutual funds and ULIPs have their unique set of advantages to offer. As always, it is vital for investors to be aware of the nuances in both offerings and make informed decisions.

What is Nifty ?

noreply@blogger.com (ASTHA SRIVASTAVA) — Fri, 25 May 2012 19:28:00 +0000

Nifty Index Definition: S&P CNX Nifty is varied 50 Stock Index construction for 21 sectors of the economy. It is utilized for a variety of purposes like benchmarking fund portfolios, index based derivatives and index funds. Nifty Index is relating to NSE Stock Exchange, Sensex Sensex is for BSE Stock Exchange.

.
Indian Index Services & Products limited(also known as as IISL) owns NIFTY. ISSL is a joint project of NSE & CRISIL. But CRISIL is a subsidiary of standard and Poor, which labeled as as S&P NIFTY or, S&P CNX NIFTY.

The traded value due to the last six months of all Nifty stocks is around 44.89% of the traded value of all stocks on the NSE

Nifty stocks express about 58.64% of the total market exploitation as on March 31, 2008.

Impact cost of the S&P CNX Nifty for a portfolio size of Rs.2 crore is 0.15%

S&P CNX Nifty is professionally managed and is perfect for derivatives trading.

Index Nifty: List of Nifty 50 stocks & NIFTY Companies list

1 ABB Ltd.
2 ACC Ltd.
3 Ambuja Cements Ltd.
4 Axis Bank Ltd.
5 Bharat Heavy Electricals Ltd.
6 Bharat Petroleum Corporation Ltd.
7 Bharti Airtel Ltd
9 Cipla Ltd.
10 DLF Ltd.
11 GAIL (India) Ltd.
12 HCL Technologies Ltd.
13 HDFC Bank Ltd.
14 Hero Honda Motors Ltd.
15 Hindalco Industries Ltd.
16 Hindustan Unilever Ltd.
17 Housing Development Finance Corporation Ltd.
18 I T C Ltd.
19 ICICI Bank Ltd.
20 Idea Cellular Ltd.
21 Infosys Technologies Ltd.
22 Infrastructure Development Finance Co. Ltd.
23 Jaiprakash Associates Ltd.
24 Jindal Steel & Power Ltd. 25 Kotak Mahindra Bank Ltd.
26 Larsen & Toubro Ltd.
27 Mahindra & Mahindra Ltd. 28 Maruti Suzuki India Ltd.
29 NTPC Ltd.
30 Oil & Natural Gas Corporation Ltd.
31 Power Grid Corporation of India Ltd.
32 Punjab National Bank 33 Ranbaxy Laboratories Ltd.
34 Reliance Capital Ltd.
35 Reliance Communications Ltd.
36 Reliance Industries Ltd.
37 Reliance Infrastructure Ltd.
38 Reliance Power Ltd.
39 Siemens Ltd.
40 State Bank of India
41 Steel Authority of India Ltd.
42 Sterlite Industries (India) Ltd.
43 Sun Pharmaceutical Industries Ltd.
44 Suzlon Energy Ltd.
45 Tata Consultancy Services Ltd.
46 Tata Motors Ltd.
47 Tata Power Co. Ltd.
48 Tata Steel Ltd.
49 Unitech Ltd.
50 Wipro Ltd.

BSE Sensex

noreply@blogger.com (ASTHA SRIVASTAVA) — Fri, 25 May 2012 19:18:00 +0000

Definition

Bombay Stock Exchange Sensitive Index. The SENSEX was first formed on 1-1-1986 and used the market capitalization of the 30 most traded stocks of Sensex. It is biggest and oldest index. The base was 1979 and taken as 100. The 30 scrips of 1986 and no more the same – some have been removed while some have been added. At irregular intervals, the Bombay Stock Exchange (BSE 50) authorities review and modify its composition to make sure it reflects current market conditions. A value-weighted stock market index, which tracks the performance of the 30 largest stocks on the Bombay Stock Exchange. The 30 stocks are chosen at random times, whenever the market has significantly changed enough to warrant the changes, and are chosen by the value of their free float shares. Although the index only tracks a very small percentage of the total stocks traded on the BSE, the index typically comprises about one fifth of the market capitalization of the entire stock exchange.

Today the Sensex constitutes of the following companies:
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Company Name (Industry)

1.   ACC (Cement – Major)
2.   Bharti Airtel (Telecommunications – Service)
3.   BHEL (Engineering – Heavy)
4.   DLF (Construction & Contracting – Real Estate)
5.   Grasim (Diversified)
6.   HDFC Bank (Banks – Private Sector)
7.   HDFC (Finance – Housing)
8.   Hindalco (Aluminium)
9.   HUL (Personal Care)
10.   ICICI Bank (Banks – Private Sector)
11.   Infosys (Computers – Software)
12.   ITC (Cigarettes)
13.   Jaiprakash Associates (Construction & Contracting – Civil)
14.   Larsen & Toubro (Diversified)
15.   Mahindra and Mahindra (Auto – Cars & Jeeps)
16.   Maruti Suzuki (Auto – Cars & Jeeps)
17.   NTPC (Power – Generation/Distribution)
18.   ONGC (Oil Drilling And Exploration)
19.   Ranbaxy Labs (Pharmaceuticals)
20.   Reliance Communications (Telecommunications – Service)
21.   Reliance Industries Limited (Diversified)
22.   Reliance Infrastructure (Power – Generation/Distribution)
23.   State Bank of India (Banks – Public Sector)
24.   Sterlite Industries (Metals – Non Ferrous)
25.   Sun Pharma (Pharmaceuticals)
26.   Tata Motors (Auto – LCVs/HCVs)
27.   Tata Power (Power – Generation/Distribution)
28.   Tata Steel (Steel – Large)
29.   TCS (Computers – Software)
30.   Wipro (Computers – Software)