SHARETIPSINFO >> Articles Directory >>- Common Influences in The Stock Market

The definition of stock in financial market is nothing but the capital raised by a company by issuing of shares. The shares are issues by a company in primary market by IPO (Initial Public Offer). There is a bid price for the shares in IPO. When the shares are issued through IPO, after that the investors can trade these shares in the secondary market through the stock exchange. The person who hold the shares are known as the shareholder of the company. The market capitalization of the company can be measured by multiplying the market value of the shares with the number of shares. Shares can be of different types when it comes to Indian stock market. It may be ordinary shares or may be a preference shares or may be the combination of both. Common shares and ordinary shares are the most usual and commonly held form of shares by the investors. So let us have a look at the common influences in the stock market.

Treasury stock
The shareholder of the ordinary shares has the voting right in different decision of the companies. The shareholder got the benefit if the company got the profit but at the same time they incurred loss if the company is in loss. Preference stock or the preference shares are having preference over the distribution of dividend etc. The preference shareholder has no voting right in the company. There is one other type of stock which is known as treasury stock. This is the stock which is bought back from the company. These are considered as issued but not as outstanding shares.

Expansion of business
As we know after issuing the shares in the stock market it can be traded in the secondary market through the stock exchange. The investors have to invest through broker, who executes the order. The traders can trade in two different ways. One is the traditional method where transactions are carried out on a trading floor in some physical locations. In the other method, trades are made electronically by the use of computer terminals. For companies to raise money stock market is one of the most important sources. The stock market allows a company to go public or the company can raise money for the expansion of the business. It is important to know the functions of NSE, BSE…etc.

On the other hand from the point of investor side it is also one of the investment option as it offers the liquidity. This means that investors have the ability to sell their securities easily. From the liquidity point of vies stock market is one of the good investment option as compared to less liquidity investment option like real estate. Stock market acts as a barometer for the economy of a country. When the stock market goes up or down it indicates whether the economy of a country is a healthy or unhealthy. For smooth functioning of the stock market to eliminate the default on transaction stock markets are regulated by a regulator body. In India the regulation body is known as SEBI (Security Exchange Board of India).There are several stock exchanges available in different countries like London Stock Exchange, NASDAQ, Shanghai Stock Exchange etc. In India some of the stock exchanges are Bombay stock Exchange, National stock Exchange. In Bombay stock Exchange 30 companies are listed and in National Stock Exchange 50 companies are listed. Bombay Stock Exchange is one of the oldest stock exchange in Asia with a great heritage. Sensex is the sensitivity index and it is the common name for Bombay stock exchange sensitivity index. The base of the Sensex is 100 on April, 1979.  So you have come to know about the common influences in the stock market

 

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