MAKER'S OF MODERN TRADER!


Member Login

UserName
Password
Forgot Password   Submit

Member Registration
SERVICES
Free Service
  Educational Report
  Market Summary
  E-Learning
  Fundamental Query
  Premium Service
Stock Pick :-Indian
  Instant Trade Alert
  Stock Pick Daily
  Stock Pick Weekly
  Futures and Options
  Dynamic Portfolio
  Phone Consultancy
Stock Pick :- Global
  Global Market
EducationalCourses
Basic Course
Technical Analysis
Day Trading
Flliot Wave Principle
Futures & Option
1- On- 1 Coaching
Mentor Program
Software Training
Custom Formula
Seminars
Performance
More Information
Trading System
Getting Started
Research Report
Glossary
 
Special
  Letter to Educator
  Writers Library.
   
 
     GETTING STARTED
 
 
   GETTING STARTED || STRATEGIES || INFRASTRUCTURE ||TRAINING || FOOG FOR THOUGHT || DISCIPLINE
   PIT FALLS TRADING || TRADING ROOM || GREATEST INVESTOR || STOCK MARKET HISTORY || CHECK LIST
MAKER'S OF MODERN TRADER
HISTORY OF STOCK MARKET:-In the world of stocks there are exchanges, where trading takes place, and indexes, which are made up of various stocks.
BSE Aseas Oldest Stock Exchange  
India Fastest growing Economy  
NSE  Indian Largest Stock Exchange  
Mumbai Stock Exchange:- It is one of the oldest in the Asia. It was established in the year 1875 as : The Native Share and Stockbrokers Association has evolved over the year into its present status as the prime Stock Exchange in the country. BSE Index comprises of 30 Stocks
National Stock Exchange:- It is now India's Largest Stock Exchange. NSE was promoted by leading Financial Institutions at the behest of the Government of India and was incorporated in November 1992 as a tax-paying company unlike other stock exchanges in the country. The Capital Market (Equities) segment commenced operations in November 1994 and operations in Derivatives segment commenced in June 2000. NSE Nifty comprises of 50 Stocks
Worlds Oldest tock Exchange  
Worlds Biggest Stock Exchange  
November 1992 Incorporation
November 1994 Capital Market (Equities) segment goes live
October 1995 NSE Became largest stock exchange in the country
April 1996 Launch of S&P CNX Nifty
February 2000 NSE Commencement of Internet Trading
December 2000 Commencement of WAP trading
June 2001 Commencement of trading in Index Options
July 2001 Commencement of trading in Options on Individual Securities
November 2001 Commencement of trading in Futures on Individual Securities
Turn Over of Indian Stock Exchange in Crores.
S.N
Stock Exchange 1994-95 1995-96 1996-97 1997-98 1998-99 1999-00 2000-01 2001-2002 2002-03
1
NSE 8,509 80 80,009 336,782 481,197 519,852 1,143,268 1,770,458 1,562,283  
2
Mumbai 67,748 50,064 124,284 207,383 311,999 685,028 1,001,619 309,316  
3
Calcutta 52,872 62,128 105,664 178,778 171,780 357,166 355,035 27,075  
6
Utter Predesh 7,823 2,373 16,070 15,390 18,627 24,048 24,747 25,237  
5
Amhedabad 5,651 8,786 20,533 30,771 29,734 37,566 54,035 14,844  
4
Delhi 9,083 10,076 48,631 67,840 51,759 93,289 83,871 5,828  
8
Pune 3,672 7,071 9,903 8,624 7,453 6,087 6,171 1,171  
7
Ludhiana 2,488 4,849 5,274 8,315 5,978 7,741 9,732 857  
9
Bangalore 712 890 4,398 8,636 6,779 11,147 6,033 70  
11
ICSE         1 545 233 55  
10
Hydrabad 1,375 1,285 480 1,860 1,276 1,237 978 41  
20
Coimbatore 1,310 2,503 2,398 2,136 395 39 0 27  
14
Madras 3,033   2,315 1,228 370 250 109 24  
15
Madhya Pradesh 118 204 12 11 1 10 2 24  
16
Vadodara 1,621 1,259 4,268 4,576 1,749  159 1 10  
13
OCTEI 365 218 221 125 142 3,588 126 4  
12
Cochine 597 1,803 1,401 1,783 773 0 187 0  
19
Bhubaneshwar 143 226 231 202 77 70 0 0  
21
Jaipur 879 1,047 1,519 431 65 2 0 0  
18
Gauhati 285 619 484 20 30 0 0 0  
 
TOTAL 169,686 239,236 688,394 1,019,944 1,128,851 2,371,247 3,313,338 1,946,865  

Stock Market reflects the economic pulse of the world. We give below the detail history of BSE Sensex. We give below the Stock Market History for the stock listed in  Indian at Mumbai Stock Exchange. (BSE SENSEX). We have chosen this since this is one of the oldest stock Exchange in the India.

SR NO  Year BSE Sensex Close Average Return per year Return From 1979
1 1979 118.76 -4.23% -4.23%
2 1980 148.25 25.47% 19.56%
3 1981 227.72 49.56% 83.65%
4 1982 235.83 -6.75% 90.19%
5 1983 252.92 6.89% 103.97%
6 1984 271.87 7.54% 119.25%
7 1985 527.36 92.88% 325.29%
8 1986 524.45 -4.55% 322.94%
9 1987 442.17 -18.43% 256.59%
10 1988 666.26 51.71% 437.31%
11 1989 778.64 18.14% 527.94%
12 1990 1048.25 33.82% 745.36%
13 1991 1908.85 91.03% 1439.40%
14 1992 2615.37 33.62% 2009.17%
15 1993 3346.06 27.82% 2598.44%
16 1994 3926.9 14.26% 3066.85%
17 1995 3110.49 -20.45% 2408.46%
18 1996 3085.2 -0.93% 2388.06%
19 1997 3658.98 18.16% 2850.79%
20 1998 3055.41 -16.48% 2364.04%
21 1999 5005.82 63.32% 3936.95%
22 2000 3972.12 -23.75% 3103.32%
23 2001 3262.33 -18.25% 2530.91%
24 2002 3398 4.17% 2640.32%
         
         
         
    Average of 24 Years >> 17.69%  
Stock Market has given average returns  per year as follow:-
  • Average return  per year from the start of the stock market  =17.69 %
  • Return since 1979                                                            = 2640.32 %
  • Average return for 2002                                                     = 4.17%
2000-2001 Total World  Turn over of Major Market = 42,076,862 Million $
US Turn Over as Worlds % of Worlds=69.02; India's Turn Over as % of Worlds = 0.59%
No of scripts available for Trading                      ~ 1259 on NSE.
Intro of 2002:-
A disappointing budget, tension on political front and uncertainty on disinvestment dragged the sensex down during the year. Among emerging countries India is best investment destination for the following reasons. Fastest growing economy  GDP forecast 5.5 %, Strong Forex Reserve  $ 68 Billion. Reform in motion for Divestment of PSU, Corporate restructuring- Tata Steel, Nelco Production cost lowest in the world. Equity valuations looks attractive with PE of 13.
1
3.5 % on 6th Feb Sensex 3427:- Speeding up of privatization and reform process improved the market sentiment leading to buying at lower levels. Sensex gains by 115 Points.
2

-3 % on 28th Feb Sensex 3147:- Adverse tax proposal on union budget resulted into hitting the lower circuit breaker of number of active scrip's. Sensex falls by 96 Points.

3
3.3 % on 1 Marc Sensex 3679:- Large circulation of positive reports on India by foreign brokerage house. That resulted into large buying by foreign funds across the board. Sensex  gained 117 Points.
4
-2.9 % on 21st May Sensex 3187:- Fear of war between India and Pakastan pushed the Sensex Down by 96 Points.
5
4.6% On 24th May Sensex 3256:- Sensex gained on hopes that a war between India and Pakistan may not happen. The market was sliding continuously since the second week of may over a war fear between the two countries. Sensex gained 142 Points.
6

-3%on 28th May Sensex 3147:- Fear of Delay of privatization and reform process. The sell off was mainly led by oil stocks like HPCL and BPCL. Sensex falls by 96 Points.

Intro of 2001:-
The conclusive ban on the age old carry forward trading and introduction of rolling settlement was a landmark development in the history of India Stock Market. There was 900 Point gyration on March 13 the wildest swing witnessed in a Day ever in 125 Years of Stock Market History. There were cases of Brokers Default and payment crises at Kolkata stock Exchange due to abnormal large trading position in so called Ketan Parekh Stocks.
 
28 Th Feb Budget :-4.35 % On 28 Feb  Sensex 4247.04:- Yeshwant sinha introduced his 4 th budget Market welcome measures, calls the budget growth and reform oriented. Sensex Jumps 177.36 Points.
 
9th March CSE Payment Crises:- Anand Rathi resigns from his post as BSE president amidst allegations that he leaked sensitive information from the exchange's surveillance department to his associates. CSE registers a Rs. 50 crore payment default, with prominent brokers Harish Biyani and Dinesh Singhania defaulting. Sensex drops 174.98 Points.
 
15 March Fear of Payment default and Tehelka tapes surface:- Fears of payment default on the BSE and revelation of the Tehelka tapes sees the sensex swing over 900 points during the day making it the most volatile day in the history of Indian Stock Market. Government announces corporatisation of all stock exchanges.
 

30 th March CSE Chairman resigns, Ketan Parekh arrested:- Ketan Parekh arested by the CBI for defrauding Bank of India of Rs. 130 Crore. Eight members directors of the CSE including the president Kamal Parekh  and vice president k k Daga resign following the CSE payment crises.

 

26 th April Ban on Badla :- During market hours, Sebi group on rolling  settlement recommends a ban on all carry forward products from jul 2 nd sensex crashes 43.64 points followed by 134 point decline next day.

 
2 nd Jul Rolling Settlement options Trading Commences:- Badla was banned. Rolling settlement system comes into effect. UTI announces a six month suspension in sales and purchases in Unit scheme 64. Sensex sheds 54 points Bse volume records 4 year low and NSE volume records 5 Year Low.
 

23rd Jul Brokers Strike:- Hit by falling revenues under the newly introduced rolling settlement system, stock brokers all over the country strike work. Sensex falls by 10 Points.

 

12th Sep WTC Attack:- Terrorists crash into the WTC towers in the United States after market hours on 11 September. Echoing global panic Sensex crashes by 117.7 Points

 
17th Sep Sensex 8 Year Low Fear of American Attact on Afghanistan:- Fear of an American retaliatory attack against Afghanistan and sustained FII selling on the domestic bourses to meet redemption sees sensex decline 149.14 points to an 8 year low 2680.98.
 
9th Nov Stock Futures trading begins:-Stock futures trading in 31 scrip's prescribed by Sebi is kicked off on both the BSE and NSE. Nse sees trades of 4503 futures contracts with a value of Rs. 89.15 crore and BSE sees 432 contracts valued at Rs.9.32 crore. India becomes the 13 Th nation in the world to introduce stock futures . Sensex gains 20 Points.
 
13th Dec. Parliament Attack:- terrorists barge into the parliament house complex. The ensuing shootout with security forces sees five terrorists and 7citizrns lose their lives. Sensex sheds 103.29 Points to 3308.66 in Intraday trade but later recovers to end 23.56 points lower.
 

From 1991-2000 the markets and economy had a record expansion period. Many IPO got over subscribed. Market Capitalization grow from  110279 Crore  in 1990-91 to 1192630 Crore  in 2000 almost 10.8 times.

INTRODUCTION:-
 
Corporate Corruption:-A lot of companies inflated their profits by means of fraud and accounting loopholes and hid their debt.
 
Stocks were overvalued:-Technology Stocks  were over valued in 2000,due to  high valuation in the range  of 30-150 P/E basis.
 
A Wave of New Day traders and Momentum Investors for live screen based Trading  give traders a quick and cheap way to trade the markets.  This attracted new investors hitting the markets with little or no experience.
 
Conflict of Interest by Research Firms
Analysts and investment bankers worked very closely together.  This led to companies having favorable ratings even though the companies was in serious financial trouble. Many of the companies changed there names and associated with software to attract high valuations.  Even few Mutual funds did invest in such companies.
 
Weekly settlement, Margin Trading and Badla:- Weekly  position and Badla helped traders built big position . Again due to difference in the Settlement of different exchange the position were only shifted from one exchange to another and vice versa. This attracted investors hitting the market with little or no expirence.
Reforms after the Crash
 

New Rules for Day traders. Badla system and ALMB was stopped  Rolling settlement came into effect and that one has to squire off the position on the same day.

Options and Futures were introduced to replace the Badla system in a phased manner.

 
The NSE BSE instituted a "circuit breaker" mechanism for Index and stocks which would halt the exchange  and a stock for a specific period.

THE STOCK EXCHANGE, MUMBAI:-It is one of the oldest in the Asia. It was established in the year 1875 as : The Native Share and Stockbrokers Association has evolved over the year into its present status as the prime Stock Exchange in the country. BSE Index comprises of 30 Stocks
National Stock Exchange:-It is now India's Largest Stock Exchange. NSE was promoted by leading Financial Institutions at the behest of the Government of India and was incorporated in November 1992 as a tax-paying company unlike other stock exchanges in the country. The Capital Market (Equities) segment commenced operations in November 1994 and operations in Derivatives segment commenced in June 2000. NSE Nifty comprises of 50 Stocks
The New York Stock Exchange (NYSE) traces its origins to a founding agreement in 1792. The NYSE registered as a national securities exchange with the U.S. Securities and Exchange Commission on October 1, 1934. The Governing Committee was the primary governing body until 1938, at which time The Exchange hired its first paid president and created a thirty-three member Board of Governors. The Board included Exchange members, non-member partners from both New York and out-of-town firms, as well as public representatives.
The Nasdaq Stock Market Inc. has been the industry innovator since its inception in 1971. Introduced as the world’s first electronic stock market, Nasdaq long ago set a precedent for technological trading innovation that is unrivaled.
Now poised to become truly the world's first global market, the Nasdaq Stock Market is the market of choice for business industry leaders worldwide. By providing an efficient environment for raising capital, Nasdaq has helped thousands of companies achieve their desired growth and successfully make the leap into public ownership.
The American Stock Exchange (AMEX) has a significant presence in common stocks, index shares, and equity derivative securities. As the nation's second largest floor-based exchange, Amex trading is conducted through an advanced centralized specialist system, combining the speed of computer-delivered orders with the liquidity of customer-driven markets. Today Amex is on the leading edge of exchanges worldwide in developing successful new investment products and innovative services for companies and investors.
The Philadelphia Stock Exchange (PHLX) was the first securities exchange in the United States. The tradition of innovation that has characterized the PHLX since its inception in 1790 has carried on throughout the years as the Exchange continues to respond to the ever changing needs of the investment community.
In addition to being the first organized exchange in the U.S., the PHLX can proudly boast a long list of other "firsts" that have had an equally significant impact on the securities industry, one of them being the first U.S. securities exchange to enter cyberspace with its own site on the World Wide Web.
The Pacific Exchange (PCX) is a marketplace where individual and institutional investors, professional broker-dealers, and registered member firms meet to buy and sell more than 2,500 stocks, bonds, and other securities issued by publicly traded companies, as well as options on more than 800 stocks. The Pacific also trades options on the Morgan Stanley Emerging GrowthSM index (EGI). The PCX is the third most active stock exchange in the country and the third largest stock options exchange in the world.
The Chicago Board Options Exchange (CBOE), founded in 1973, revolutionized options trading by creating standardized, listed stock options. Prior to that time, options were traded on an unregulated basis and did not have to adhere to the principle of "fair and orderly markets." The quick acceptance of listed options propelled CBOE to become the second largest securities exchange in the country and the world's largest options exchange. Today, CBOE accounts for more than 51 percent of all U.S. options trading and 91 percent of all index options trading.

Global History of Stock Market:-

The roots of organized stock trading in the United States are grounded in a scandal. During the 1700s, brokers gathered near Wall Street, along a 12-foot-high wood stockade in Lower Manhattan, to trade stocks.

Nasdaq

Nasdaq, the National Association of Securities Dealers Automated Quotation, began in 1971. It was formed after the Securities and Exchange Commission, the stock market policing agency, decided that the over-the-counter securities industry needed to be automated.

The commission proposed automation as the solution and put the National Association of Securities Dealers Inc. in charge of making the change, thus creating the first electronic stock market.

Stock indexes

There are several indexes that show how a select group of stock is doing. Some take a narrow view of the market, such as the Dow, an index of 30 blue-chip stocks. Other indexes take a broad view, such as the S&P 500 index, which includes the stocks of 500 leading U.S. companies, including the 30 stocks in the Dow.

Here's a look at those and other indexes:

Dow Jones Industrial Average

Many market watchers equate the Dow with Wall Street, but the index tracks only 30 stocks. Regardless of its narrow view, the Dow is Wall Street's most recognized barometer.

Standard & Poor's

Standard & Poor's Corp. also has popular indexes. Perhaps the best known is the S&P 500.

But size didn't keep Standard & Poor's from adding to the index. More publicly traded companies were included, and on March 4, 1957, the S&P 500 debuted.

There are eight other S&P indexes, including the 100, MidCap 400, SmallCap 600, Financials, Transportation, Industrials, Utilities and Super Composite 1500.

Russell

There also are Russell indexes. The first with this name was started by Frank Russell Co., a Tacoma, Wash., investment management company that wanted to evaluate investment managers.

In late 1978, the company unveiled three indexes -- the Russell 1000, 2000 and 3000 -- each measuring the stock performance of U.S. companies.

Members of the Russell 3000 also appear in either the Russell 1000 or 2000. The Russell 1000 tracks the largest companies in the Russell 3000, making it a large-market capitalization indicator. That is, an indicator for companies worth $178.2 million to $407.2 billion.

The remaining stocks are part of the Russell 2000, an indicator for mid- and small-cap stocks. The average market capitalization is about $526.4 million.

Wilshire

Other indexes bear the Wilshire name. Of all the indexes created to measure U.S. stock performance, perhaps the Wilshire 5000 gives the biggest picture.

The index is a product of Dennis Tito, who at 23 helped develop trajectories for Mariner spacecraft to reach Mars and Venus. Tito then applied the same methodology to the stock market in the early 1970s and created the basis for the Wilshire indexes.