index and stock price movement
A COMPARATIVE STUDY ON INDEX AND STOCK PRICE MOVEMENT OF VARIOUS INDUSTRIES IN EQUITY MARKET AT
SHAREKHAN
CHAPTER – 1 INTRODUCTION
CHAPTER: 1
1.1 INTRODUCTION
1.1.1 INDEX AND STOCK PRICE MOVING AVERAGE Individual stock price is compared with the stock market indices. The moving average of stock and index are compared. If the NSE index is above stock’s moving average line, the particular stock has bullish trend. The price may increase above the market average. If the nifty or sensex is below the stock’s moving average, the bearish market can be expected.
NIFTY AND SENSEX NIFTY is an Index computed from performance of top stocks from different sectors listed on NSE (National stock exchange). NIFTY consists of 50 companies from 24 different sectors. . The companies which form index of NIFTY may vary from time to time based on many considered by NSE.
1.1.3 Equities Shares are bits of equity. When companies start up they need cash for an office and employees. Perhaps the entrepreneur and sole owner behind the business puts in his lifetime savings of ₤50,000. That money represents is equity stock. But it is not enough to cover his costs so he goes to the bank. Which lends him another ₤50,000? he still owns 100% of his business but it is now financed 50% through equity(his savings) and 50% through debt(bank loan). Later, he needs more money to finance growth-a second employee perhaps. He can either ask the bank for more money or ask someone else to put some more “equity” into the business. In the case of larger companies they commonly decide to float the company on the stock
SHAREKHAN
CHAPTER – 1 INTRODUCTION
CHAPTER: 1
1.1 INTRODUCTION
1.1.1 INDEX AND STOCK PRICE MOVING AVERAGE Individual stock price is compared with the stock market indices. The moving average of stock and index are compared. If the NSE index is above stock’s moving average line, the particular stock has bullish trend. The price may increase above the market average. If the nifty or sensex is below the stock’s moving average, the bearish market can be expected.
NIFTY AND SENSEX NIFTY is an Index computed from performance of top stocks from different sectors listed on NSE (National stock exchange). NIFTY consists of 50 companies from 24 different sectors. . The companies which form index of NIFTY may vary from time to time based on many considered by NSE.
1.1.3 Equities Shares are bits of equity. When companies start up they need cash for an office and employees. Perhaps the entrepreneur and sole owner behind the business puts in his lifetime savings of ₤50,000. That money represents is equity stock. But it is not enough to cover his costs so he goes to the bank. Which lends him another ₤50,000? he still owns 100% of his business but it is now financed 50% through equity(his savings) and 50% through debt(bank loan). Later, he needs more money to finance growth-a second employee perhaps. He can either ask the bank for more money or ask someone else to put some more “equity” into the business. In the case of larger companies they commonly decide to float the company on the stock