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This August, we celebrate the 14th Birthday of our website, kotaksecurities.com! Here’s revisiting some major events that happened in the stock markets in the past 14 years. View the presentation to know more.
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- Highlights of
the Stock Market
14 years
2000
In India, the Ketan Parekh scam put an end to the badla or the carry-
forward trading in the stock market. The traditional system allowed
stockbrokers to put off settling their trades and delay settlement by
paying a fee to the stock exchange.
India ushered in internet-based trading. The National Stock Exchange
took the lead and allowed web-based platforms to offer online trading
facilities to retail investors sitting at home.
More in 2000
The year also saw the burst of the dotcom bubble. It brought down
aspirations of the ICE (Information Technology, Communications and
Entertainment) sector as it was called then. Benchmark indices like
Sensex and Nifty nearly halved in value. Technology shares
represented by BSE IT sector index tumbled 71%.
2001
Derivatives trading commenced on the National Stock Exchange. It
ushered a new era replacing a traditional badla or carry-forward system
for speculation. It was launched in phases with trading commencing in
Nifty or index futures and options first. Stock futures were introduced
later.
2002
Exchange Traded Funds or ETFs were introduced in the Indian market by
the National Stock Exchange. An ETF is a basket of stocks that reflects the
composition of an Index, like CNX Nifty.
2003
Stock markets witnessed another significant transformation. The
settlement cycle was cut to two days when ‘T+2’ settlement system was
introduced in the cash market. The settlement day is when buyers get
shares and sellers get the money. India joined a unique set of markets in
the world.
2004
The BSE Sensex crossed 6000 for the first time in June 2004.
For the first time in the history of the Indian stock market, foreign
institutional investors injected $ 9bn in a single calendar year. India has
been a major recipient of FII flows after Korea and Taiwan since then
among emerging markets. FIIs now control nearly 25% of India’s stock
market capitalization.
2005
FIIs continued to pour money into Indian equities fuelling the rally in the
BSE Sensex that topped 8000. India’s equity market, for the first time,
received more money than any other big emerging market like Korea and
Taiwan but excluding China. By the end of the year, the BSE Sensex
topped 9000.
2006
The BSE Sensex witnessed a rapid movement upwards as it went passed
14000, a staggering 5000 points in less than a year. FIIs continued to push
over $ 8 bn in the year as India witnessed an average 9% GDP growth. It
was a year of euphoria in the stock market.
2007
Share prices rallied on the back of a strong economic growth. Companies
reported strong profit growth and benchmark indices continued to scale
new peaks. In 2007, the BSE Sensex scaled a peak of 20,000.
The world woke up to a global financial crisis this year. Share prices across
markets tumbled. In India, the Sensex that scaled a peak of 20,000 a year
earlier, witnessed a virtual wipe out of gains falling below 10,000. Markets
across the board witnessed poor risk appetite. Investors wanted to hold
cash and gold.
NSE launched the ‘India VIX index’ during the year. The index measures
volatility in stock prices and works as a lead indicator.
The two premier stock exchanges, BSE and NSE and also introduced
currency derivatives during the year. These measures enhanced the depth
of the Indian financial markets.
2008
2010
For the first time, the value of FII investment in India topped Rs 1,00,000
crore. This indicated the confidence these investors had in Indian equities
over the years. They continue to remain a dominant force in Indian equity
markets.
Stock exchanges allowed brokers to introduce mobile trading platforms.
The proliferation of mobile phones has resulted in banking and e-
commerce adapting itself to the technology.
2014
A watershed election in the history of the country fuelled a dramatic rally in
Indian equity markets. As the stock market anticipated a decisive mandate,
the BSE Sensex scaled new peaks. It touched 22000 in March and by the
time results were out it topped 25000. In July 2014, it crossed 26000 on
the back of the budget that new government announced on 10 July 2014.
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