This training module helps sales employees understand the fundamentals of the Indian stock market to better assist clients and improve product knowledge.
The Indian stock market is one of the oldest in Asia and among the fastest growing markets globally. It serves as a platform where buyers and sellers come together to trade shares of publicly listed companies.
The stock market plays a crucial role in the Indian economy by:
As a sales employee, understanding the stock market can help you better explain financial products, investment opportunities, and market trends to your clients.
The two main stock exchanges in India:
Regular trading hours: Monday to Friday, 9:15 AM to 3:30 PM
Pre-opening session: 9:00 AM to 9:15 AM
Markets are closed on weekends and specified holidays
Market indices track the performance of a selected group of stocks, providing a snapshot of market performance.
| Index | Exchange | Components | Description |
|---|---|---|---|
| SENSEX | BSE | 30 stocks | Free-float market-weighted index of 30 well-established companies |
| NIFTY 50 | NSE | 50 stocks | Benchmark index representing the weighted average of 50 Indian company stocks |
| BSE SmallCap | BSE | 700+ stocks | Tracks performance of small-cap companies |
| Nifty Bank | NSE | 12 stocks | Index of the most liquid and large banking stocks |
| Nifty IT | NSE | 10 stocks | Tracks the performance of IT sector companies |
These indices serve as benchmarks for investors to gauge market performance and compare the returns of their investments.
Established in 1992, SEBI is the primary regulatory body for the securities market in India. Its main functions include:
Institutions that hold securities in electronic form:
These have eliminated physical share certificates, making trading more efficient.
Responsible for settlement of trades:
They ensure that buyers receive securities and sellers receive payment.
Direct ownership in a company that entitles shareholders to dividends and voting rights. Risk level: High
Example: Buying shares of Reliance Industries or HDFC Bank
Professionally managed investment funds that pool money from many investors to purchase securities. Risk level: Low to High (depending on the fund)
Types: Equity funds, Debt funds, Hybrid funds, Index funds
Similar to mutual funds but traded on exchanges like individual stocks. Risk level: Moderate
Example: Nifty BeES, which tracks the NIFTY 50 index
Financial contracts deriving value from underlying assets. Risk level: Very High
Types: Futures, Options, Swaps
Fixed-income securities where investors loan money to the issuer. Risk level: Low to Moderate
Types: Government bonds, Corporate bonds, Treasury bills
Process by which a private company offers shares to the public for the first time. Risk level: High
Recent examples: LIC, Zomato, PayTM
Remember: The stock market is subject to volatility and past performance is not indicative of future results. Always encourage clients to consider their risk tolerance, investment horizon, and financial goals before investing.