Growth and Development of Indian Stock Exchange 2018

By:Tushar Walia 2018-02-06

Stock Exchange is a wider term when we start to think about. It plays a major role in India’s economy. It is a place where stock brokers and traders can buy and sell the stocks and securities. It can also be called as a kind of continuous auction. Mainly, the two important Indian Stock Exchange markets are Bombay Stock exchange (BSE) also known as the Bull market and National Stock Exchange (NSE) also known as the bear market. They both play a crucial role in the Indian stock market.

The Boom

Indian Stock exchange market witnessed a boom in 2017. This became easier because of various reasons. Like, India’s economic fundamentals improved gradually and the Government of India seriously intended for the economic reforms.

The year 2017 was pretty good for Indian stock market. Sensex achieved a gain of 28 per cent at 34,057 points. Similarly, Nifty attained a gain of 29 per cent at 10,531 points. This was a record closing procured by the investors in the last year. Introduction of GST and the Insolvency & Bankruptcy Code (IBC) was a remarkable step taken by the government.

Bombay Stock Exchange

Talking about the Bombay Stock Exchange, the Dalal Street investors bagged approximately five million crores.  By this achieved gain, BSE’s market capitalization is 157 lakh crore currently. The experts declared that the last year could also be termed as that of small and mid-cap stocks. This is because, the BSE’s small–cap index is up by 60 per cent and mid cap index is up by 48 per cent. Whereas the pharma stock lost substantial ground, the real estate stocks made a distinctive comeback.

The year 2017 also witnessed as many as 153 initial public offers hitting the Indian stock market and also raised 11.6 billion US dollars. An EY report said that this IPO activity “looks well” for the year 2018 also. Return of foreign institutional investors will create a bullish investment climate. India will be made a highly attractive emerging market in the coming time, by the combination of primary market growth and overall growth.

However, the market players declared that the coming year might not be as smooth as the previous one. At the time where India’s revenue collection is declining, the Government has increased its borrowing from other nations. This is a major increasing macro concern along with growing fiscal deficit. Also the prices of crude are rallying leading to a huge rise in inflation. Inflation sometimes leads to insidious impact on the stock market. When there is uncertainty, the risk premium tends to increase, which leads to higher expected returns from the stock market. If inflation will keep on increasing, the minimum return on stock investment will also increase by which the market valuation will become less. If the estimated earnings will not reach to a certain break up point share prices will continue to fall.

Overall, it can be said that last year the market was dominated by the bull whereas this year it is likely to be overtaken by the bear market.

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