• Stock market and share market essentially mean the same thing. Both terms describe an exchange in which buyers and sellers of stock or shares may trade in a market with high liquidity

Is the Stock Market and Share Market same?

Share:• Share is a unit issued by a company at the

time of raising fund from the market. It is a certificate issued to a person who applies for it and is given at a value predetermined by the company.

• It is the smallest unit of ownership that may be bought or sold on or off an exchange.

Stock:• Stocks in the reference of stock market are

the total number of shares a person has in one company or in many companies.

• Stock market is an organised market, where securities of govt, semi govt bodies and corporate enterprises are brought or sold.

• It is established for the purpose of assisting, regulating and controlling business in buying selling and dealing in securities.

• In the stock market only those securities listed in the stock exchange are transacted.

• Individuals alone can buy and sell securities.

Stock Market

1. Primary Market:

• The first group of investors to whom a new issue of a security is sold.

• The primary market consists of the issuer and the first buyers of the issue.

• The primary market can be a time more volatile than the secondary market because it is difficult to determine the underlying value of new issues.

2. Secondary Market:

• A market where investors purchase securities or assets from other investors, rather than from issuing companies themselves.

• The national exchanges - such as the New York Stock Exchange and the NASDAQ are secondary markets.

Types of Stock Market

Market ConditionsBull Market:• A financial market conditions in which

prices of securities or group of securities are rising or are expected to rise.

• Bull markets are characterized by optimism, investor confidence and expectations that strong results will continue.

Bear Market:• It is a market condition in which the

prices of securities are falling.• As investors anticipate losses in a bear

market and selling continues, pessimism only grows

BLUE CHIP :• The blue chips carry the highest value.• Large, established firms with a long record of profit growth, dividend

payout and a reputation for quality management, products and services are referred to as Blue Chip companies and their stocks are Blue Chip stocks.

PENNY :• Penny stocks are low-priced, speculative stocks that are very risky. • These stocks are generally issued by the type of companies with a

short or erratic history of revenues and earnings. INCOME :• Income stocks are stocks that pay higher-than-average dividends over

a sustained period. • These above average dividends tend to be paid by large, established

companies with stable earnings. VALUE :• A value stock is a type of stock that is currently selling at a low price. • Companies that have good earnings and growth potential but whose

stock prices do not reflect this are considered value companies. • Investors who buy value stocks believe that these stocks are only

temporarily out of favour and will soon experience great growth.

Types of Stocks

• Market capitalization is often called as market cap is a measurement of the size of a business enterprise.

• It is the total dollar market value of all of a company's outstanding shares calculated by multiplying a company's shares outstanding by the current market price of one share.

• The companies were divided into large-cap, mid-cap, and small-cap based on the size of market capitalization.

Large-cap: $10 billion–$100 billion. Mid-cap: $1 billion–$10 billion. Small-cap: $100 million–$1 billion.

Market Capitalization

The Top 10 Largest Stock Markets Rank Exchange Name Country

Domestic Market Capitalization(Billion

Dollars)

1New York Stock

Exchange United States 11,837

2Tokyo Stock

Exchange Japan 3,306

3 NASDAQ United States 3,239

4 Euro next Belgium, France, Holland, Portugal

2,869

5London Stock

Exchange United Kingdom 2,796

6Shanghai Stock

Exchange China 2,704

7Hong Kong Stock

Exchange Hong Kong 2,345

8Toronto Stock

Exchange Canada 1,608

9 BM & FBovespa Brazil 1,337

10Bombay Stock

Exchange

India1,306

The stock market indexes are useful in a number of ways to stock investors:

1. The market indexes provide an historical perspective of stock market performance.

2. It provide a yardstick with which investors can compare the performance of their individual stock portfolios.

3. It acts as a forecasting tool. Studying the historical performance of the stock market indexes, investors can forecast trends in the market

Importance Of Indices