Stock Market Terms- What is Sensex, Nifty, Share market Index

Stock market terms: In this article we will discuss in detail about Sensex and Nifty and the terms related to stock market.

 Sensex and Nifty are the major indices of BSE and NSE respectively. NSE National Stock Exchange and BSE (Bombay Stock Exchange) are the two major stock exchanges in India.

stock exchange

Stock exchange is a kind of market where shares are traded between the buyer of shares and the seller of shares, both Nifty and Sensex are also indices. Sensex is the main coordinate of Bombay Stock Exchange and Nifty is the main coordinate of National Stock Exchange. More than 5000 companies are listed on Mumbai Stock Exchange and more than 1600 companies are listed on National Stock Exchange.

To know the condition of the stock market, it is difficult to track all the companies, so indexes have been created. To know the condition of the stock market in India, there is no need to track all the companies, just by looking at Nifty and Sensex, you can know whether the market is up or down today.

When Sensex and Nifty are in green mark then you can say stock market is up today if Sensex and Nifty are in red mark then you can say that market is down today. That is, if Nifty and Sensex are in the green mark, then it is above yesterday’s closing value, whereas if Nifty and Sensex are in the red mark, then it means that today they are below the closing value of yesterday.

What is Nifty and Sensex ?

What is Sensex

Meaning of Sensex (Sensex meaning in hindi) – The word Sensex is made by combining Sensitive and Index, the first 4 letters from Sensitive and the last two letters are taken from the index, 30 best and big companies from different sectors are included in the Sensex That is, the movement of the Sensex is determined on the basis of the movement of the shares of these 30 companies.

What is Nifty

Nifty is composed of the words National and Fifty fifty because 50 companies are included in Nifty, these companies are the best and biggest companies of different sectors, which means the movement of Nifty is determined on the basis of the movement of the share price of these 50 companies. . Nifty which is the main index of NSE is also known as Nifty 50.

Whatever companies are selected in Nifty and Sensex, those companies are the leaders of their respective sectors, most of these companies are selected from different sectors, so the performance of Nifty and Sensex is considered to be the performance of the stock market.

There are many more indices of stock exchanges. There are indices of almost all sectors on NSE and BSE. Indices of any sector include the big and best companies of that sector. For example, if you want to know the condition of the banking sector, then you can find out the condition of the banking sector by looking at the performance of Bank Nifty on NSE and BSE.

There are also indices of midcap and smallcap companies on the stock exchange such as S&P BSE Small cap and S&P BSE Mid cap, NIFTY Mid Cap Fifty etc. where you can know the condition of midcap and small cap.

If a stock continues to perform poorly in Nifty and Sensex, then it is removed and replaced by a good stock and this decision is taken by the exchange itself.

Stock Market terms

Meaning of Share

Share literally means stake, it is a small stake taken in any company that you buy. For example, if you also buy a share of a company, then you become a shareholder of the value of one share of that company.

 Demat meaning

Demat means dematrilised, in the form of shares earlier you were given by writing on paper, now all the shares have been converted into digital form. Now to hold these shares, you must have a demat account, which you can open with any broker.

The demat account is like your bank account, the difference is that you keep money in the bank account whereas your shares are kept in digital form in the demat account.

Portfolio meaning –

Portfolio is a type of list which refers to the list of shares held by a portfolio investor in the stock market. For example, if an investor has 20 shares in his portfolio, it means that the list of his shares is 20 shares.

Elss meaning

ELSS full form – Equity liquid saving scheme

ELSS are a type of Mutual Funds. The main objective of which is to save the tax of the investors as well as give them maximum returns. Most of the investments of ELSS mutual funds are in equities, due to which their returns are higher than other tax saving schemes.

In 2005, SEBI and the Ministry of Finance notified the ELSS scheme as a new tax saving scheme. By investing in the ELSS scheme, you can get exemption on investment up to a maximum of ₹ 1,50,000 / – under section 80(c) of the Income Tax Act – 1961.

You can get income tax exemption for the same financial year in which you have invested in ELSS. For example, if you have invested Rs 20,000 in ELSS scheme in F/Y 2018-19, you can get a rebate of Rs 20,000 in 2018-19.

kyc full form

KYC is a process, under which all companies, banks, government schemes, financial institutions submit photo copies of their documents for the identification of their customers. This document contains information related to the name, address, identity card of the customer, so that in case of any accident in future, that person can be identified.

Meaning of share split

Stock split means the division of shares, just as split in Hindi means the division of something, in the same way, stock split means the division of shares in the stock market, it is a corporate action, which is done by companies listed in the stock market. It is not necessary that every company listed in the stock market will split its stock, the decision to split stock is a personal decision of the company.

As we understand from the stock split example, if an ABC company splits its stock in the ratio 1: 1 then every person who is an investor in that company will split its shares in the ratio 1: 1 and each of its shares will now be divided into two. will be converted into shares.

Time value of money

Whenever you invest your money, most of the time you get more money than your investment means the more time you invest your money, with time our invested amount will increase. Price is rising.

Therefore we can say that the value of money is also based on time or money also includes some time value which is called Time Value of Money.

Assets meaning

Assets are those goods and services that can be measured in future in rupees. Assets are those resources that help in generating profit i.e. profit in any business. Assets are similar to yours which provide you benefits in future.

 Trading account

Whenever you open your demat account, you are also given the option of opening a trading account.

Debentures meaning in hindi

Debentures are called loan letters in Hindi i.e. debt. The company needs money to increase its business, then it can issue shares to raise funds, but if the company does not want to distribute its stake, because the issue of shares is a way to sell the company’s stake, then that company takes a loan from the bank. Can borrow or ask for money from the public.

If the company decides to ask for a loan or loan from the people, then for this the company has to issue a certificate which is called letter of credit or Debenture.

What is Nav in Sip

Net Asset Value (NAV) of Mutual Fund refers to the market value of the investment. Net Asset Value is determined on the basis of per unit of investment in Mutual Funds (MFs). To arrive at the NAV per unit, the total amount held with Mutual Funds (MFs) including the total market value of all the shares in the portfolio, after deducting the liabilities, is calculated by dividing the NAV by the total number of units. is | Asset Management Company calculates the NAV of any fund at the end of every trading day. Explain that the NAV of only ETFs present in the market moves along with the market.

 NAV = (Assets-Liabilities) / Total Number of Units

Mutual fund direct vs regular

       

Regular fund –

Regular funds are those in which there is no direct relationship between the AMC (Asset Management Company) / fund house and the investor but a midiator. The mediator can be an agent, advisor or broker. This mediator acts as an agent for that fund house and in return he gets his commission. That is, their job is to sell the products of the fund house. For example, we can think of it like an LIC agent.

 AMCs charge a little extra from the investors for paying fees, commissions to these agents which is called the expenses ratio.

And the amount of this expense ratio is deducted from the NAV received by the investor.

Direct fund –

Direct plans are offered directly to the investor by the fund houses or mutual fund company. There is no mediator, agent or broker here. Till 2013, there were only regular plans. Till that time the facility of direct plan was not provided by the fund house.

But from January 2013, as per SEBI guidelines, all fund houses were asked to launch direct plans along with regular plans.

There is no commission in Direct Plans as there is no agent between the fund house and the investor.

Due to not having a mediator, direct plans have a lower expense ratio than regular plans. But all the investment related work has to be done by the investor himself.

Esop meaning

Esop is a for-profit scheme designed in the interest of the employees. Under this plan, the employee can become entitled to the shares of the company. ESOP provides special benefits to the employees as compared to other schemes. Many companies in India and abroad are using this plan to keep the employees engaged with the company. This method is most prevalent in IT companies.

stock valuation

Stock valuation is to find out the fair value of a company or its stock. With this, the investor is able to know about the correct price of the share. This adds to the profit and loss of the investor. The reason is that if you buy a stock at an expensive price, then it also affects the return. At the same time, the return can be increased by buying the stock at the right price. In this context there is a very popular statement of warren buffet “Price is what you pay. & Value is what you get” i.e. what you pay is the price and what you get in return is the value.

Arbitrage funds meaning

This is a part of the equity scheme of mutual funds. However, in this, only 65 per cent of the fund is invested in stocks. Such funds mainly make profit by taking advantage of the difference in the price of shares in the cash market and derivatives market. This fund performs better in times of high volatility in the stock market. This is perfect for investors who do not want to take a lot of risk.

PE Ratio

The PE ratio is used to find out whether a stock is expensive or cheap. It shows how much an investor is willing to pay for his (that company’s) share for every rupee profit of the company. A stock that has a low pe ratio is considered cheap, while a stock with a high pe is considered expensive. However, in the condition of the stock market right now, there is no correct estimate of the market from the PE ratio.

PEG Ratio

It is considered better to use the price to earning growth (PEG) ratio for selecting stocks due to any discrepancy in the PE ratio. Stocks that have a PEG ratio of less than one are considered undervalued. At the same time, a stock with a PEG ratio of more than one is considered overvalued. If the PEG is one, it means that the stock is trading at the correct valuation.

In this article, we have tried to give detailed information about Nifty and Sensex, both stock exchange, BSE and NSE and stock market terms, how will this article help you. Put ? Do write your valuable thoughts in the comment section below, thank you.