Stock Market Importance

Stock is a term used to represent an investor's ownership in a company. Person who owns stock is commonly called stockholder or shareholder. A equity or stock market is the place not necessarily physical, it could be virtual too where, sellers and buyers of stocks or shares or securities traded privately or listed on a stock exchange are bought and sold. A stock exchange is a physical or virtual place or organization where traders which include individual or companies can trade in stocks of different companies or sometimes of their own company too. Companies generally want their stocks to get listed on a stock exchange as it is the next step for a company to grow big. A large company will normally have its stock listed on more than one exchanges

Value of stock is based on financial data which can be verified such as Balance Sheet, growth and sales figures available in public domain and other financial statements. For long term investments Stock market is considered to be a good choice since in general practice a well-run company continues to expand and provide dividend to its stockholders and even has stable market price of its shares. Short-term investors by investing are also ceasing their opportunities in the stock market. Market skittishness, sometimes even without a financial basis, can cause the rapid corrections in prices. Thus investor news reports, psychology, economic conditions, policy predictions and rumours, can also cause the prices of the stocks in market to either rise or

It dates back to the close of 18th century when the East India Company used to negotiate loan securities. In the 1830s, trading on corporate stocks and shares in Cotton presses and Banks took place in Bombay. However, the trading was broad but hardly few brokers were there in 1840 and 1850. A group of 22 stockbrokers informally began trading under a banyan tree opposite the Town Hall of Bombay from the mid-1850s, each investing One Rupee. This banyan tree still exists in the Horniman Circle Park, Mumbai. In 1860, the exchange number of brokers increased to 60. It was American Civil War which brought in the 'Share Mania' in India when the cotton supply from the US to Europe stopped and Indian traders flourished. Further the brokers increased to 250. The unofficial group of stockbrokers structured themselves as the Native Share and Stockbrokers Association, formally as the Bombay Stock Exchange (BSE) in 1875. It was a voluntary non-profit making Association of Persons (AOP). BSE was shifted to an old building near the Town Hall. The plot of land on which the BSE building now stands (at the intersection of Dalal Street, Samachar Marg and Hammam Street in downtown Mumbai) was acquired in 1928,, and a building was constructed and occupied in