SENSEX: SENSEX refers to “Sensitivity Index” which is associated with the stock market indices. An index is basically an indicator. It gives an idea about movement of stock market whether most of the securities have gone up or most of the securities have gone down listed in BSE.
In India, SENSEX is popularly known as Index of Bombay Stock Exchange – the barometer of Indian Capital Market. Now, BSE SENSEX is also known as S & P BSE SENSEX. This S & P BSE SENSEX comprises of 30 companies. The SENSEX was 1st compiled in 1986, was calculated on a “Market Capitalization – Weighted” methodology of 30 component stocks representing large, well – established and financially sound companies across key sectors. Since September 1, 2003, S & P BSE SENSEX is being calculated on a free – float market capitalization methodology.
BSE On-Line Trading:
■ BOLT is the modern trading practice introduced by BSE.
■ Under this arrangement, trading can be carried out by member brokers and their authorized assistants from their workstations.
■ It provides for a search based trading mechanism whereby two way quotes are accepted from Jobbers and Market Makers and from brokers on the basis of orders received from investors.
■ The System matches them according to logic specified in BOLT.
NIFTY: The NIFTY 50 is an index of National Stock Exchange of India. It gives an idea about movement of stock market whether most of the securities have gone up or most of the securities have gone down listed in NSE. The NIFTY 50 covers 22 sections of the Indian economy and offers investment managers exposure to the Indian market in one portfolio.
The NIFTY 50 index is a free float market capitalization weighted index. The index was initially calculated on full market capitalization methodology. From June 26, 2009, the computation was changed to free float methodology.
The base period for the CNX Nifty index is November 3, 1995, which marked the completion of one year of operations of National Stock Exchange Equity Market Segment. The base value of the index has been set at 1000.
SETTLEMENT: After you have bought or sold securities through your broker, the trade has to be settled. It means the buyer has to receive his shares and the seller has to receive his money. This process settles the claims of both parties, is known as settlement in connection with stock market.
In other words, settlement is just the process whereby payment is made by all those who have made purchases and shares are delivered by all those who have made sales. Presently, settlement period is T + 2 (previous it was T + 3) and T stands for Trading Day and 2 more trading days.
TREND LINE: In case, the price of shares moves in a particular direction which persists for a longer period i. e. is known as Trend. When the movement is upward, the trend is called BULLISH. When the movement is downward it is called BEARISH.
Bear market is a weak or falling market characterized by the dominance of sellers. Bull market is a rising market with abundance of buyers and relatively few sellers. Secondary movements that reverse the uptrend temporarily are known as Reactions. The movements that reverse the down trend temporarily are known as Rallies. When an uptrend breaks in the downward direction, it is called Trend Reversal.
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