Stock markets are among the most considerable avenues to park funds for considerable profits in the short as well as long run. The stock market is a platform where investors trade in financial instruments like equities, mutual funds, bonds, derivatives, etc.
Indian stock markets have been among the top 10 stock markets worldwide in terms of market capitalization – approx $3.4055 trillion. Technology has changed the working system of the stock market also. Currently, stock markets function through online stock exchanges that are serving investors with registered stockbrokers. Stock exchanges act as a facilitator of trading transactions and facilitate the buying and selling of all financial securities.
Leveraging technology, more than 30% of trades in India are based on algorithms. Algorithmic trading strategies are based on emerging technologies like machine learning and making investors enjoy more profitability. Algorithms ease complex calculations based on historical and live data analysis, leading to profitable trade decisions.
You can connect to stock exchanges to make trades in the stock market using your Demat account and trading account. Before the evolution of technology in the Indian stock market, investors had to visit stock exchanges personally and yell to buy or sell securities.
Regulation of the Indian Stock Markets
The stock markets in India are regulated by the Securities and Exchange Board of India (SEBI). It has administrative control and authority over stock exchanges. SEBI ensures a fair market for investors by implementing the issued directions.
Indian stock market trading session timing is 9:15 AM to 3:30 PM for normal trading. A transaction made during this time follows a bilateral order matching system. Demand and supply forces determine the price of a listed stock which makes the market volatile.
Look at some facts about the Indian Stock Market:
- There are a total of 23 stock exchanges in India.
- Most trades in India are placed on two stock exchanges, the BSE (Bombay Stock Exchange) and the NSE (National Stock Exchange). These two stock exchanges have witnessed the trading of stocks worth Rs. 6,00,000 crores.
- BSE, established in 1875, is the oldest stock exchange in Asia. More than 5,000 companies are on the list of BSE. BSE is among the topmost exchanges globally, with the maximum listed members. BSE Sensex is the most active index that provides data on stocks. It quickly recovered 20% of its value between March and June 2020, when the economy was in trouble due to a global pandemic.
- The NSE ranks 2nd in Index Options. The most prominent market indexes in India are the Nifty and Sensex. Nifty provides data on NSE.
- Monsoon season is one factor that affects agriculture- prominent countries like India and, thus, Indian stock markets. The agricultural output and resulting inflationary pressures impact the supply chain industry most during the monsoon.
- Now is the time to invest
- Experts believe that now is a good time for stock investments. Demat account information with various stockbrokers shows an increased number of Demat account openings during the pandemic, and now there is more retail participation. The Indian stock market has already brought numerous opportunities with growth in the startup segment. Investors should take this opportunity. They are seeing a lot of pessimism in market valuations.
How New Investors Should Approach Stock Market
You need to open brokerage accounts to start stock trading mandated by the SEBI. Demat accounts and trading accounts have made stock trading easier than ever. Nowadays, brokers offer Demat accounts for free. These accounts facilitate an online integrated platform for fast trades. You can create your online Demat and trading account with a registered stockbroker. To save on trading costs, consider Demat and trading services of discount stockbrokers
Before approaching the stock market, you must determine your risk tolerance and financial goals to pick the right stocks. You can diversify your investments. A balanced investment portfolio helps minimize the risk involved in the stock market.