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Equities Market

 

The stock market is a mechanism for channeling funds from investors to companies thereby enabling raising of non-debt funds. Basically, companies avail this source of finance to fulfill their funding requirements. Equities do not carry any fixed coupon, but are rewarded with dividends based on the performance of the company. The risk associated with such investments is higher as compared to debt investments.

The primary market for equities consists of IPO (Initial Public Offerings) by new as well as existing listed companies who are looking to raise funds by offering equity to the public. Apart from the conventional modes, Qualified Institutions’ Placement (QIP) was also used by many listed companies to meet their financing requirements.

In India, trading in the Equity market is facilitated through stock exchanges such as NSE, BSE and MSEI. The exchanges also provide a trading platform for the derivative contracts (futures and options). Generally, trading in securities listed on exchanges is done with the tick size of 5 paise. Separately, to restrict volatility in equities, Circuit Breakers have been introduced. The index-based market-wide circuit breaker system applies at 3 stages of the index movement, either way viz. at 10%, 15% and 20%. These circuit breakers when triggered bring about a coordinated trading halt in all equity and equity derivative markets nationwide. The market-wide circuit breakers are triggered by movement of either the BSE Sensex or the Nifty 50, whichever is breached earlier.

NSE operates on the 'National Exchange for Automated Trading' (NEAT) system, a fully automated screen based trading system, which adopts the principle of an order driven market. Through this technology, members can trade remotely from their offices located in any part of the country. BSE too, provides a separate online platform, BOLT for equity trading. Equity trades are settled on T+2 basis, wherein the counterparty due to make funds payment is required to make it available on T+1 itself. Trading hours for equities segment is from 9.15 am to 3.30 pm on Monday to Friday.

Buoyant secondary market performance, supported by strong macro-economic fundamentals, favorable investment climate and encouraging corporate results, has attracted domestic as well as international investors to Indian equity market. It has also encouraged a number of companies to raise capital from the primary market.

Recently, STCI PD diversified its operations and started trading in Equity and Equity F&O markets. Trading however, is conducted only on proprietary basis.

 
 

Latest News

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RBI slashed the Statutory Liquidity Ratio by 50 bps from 20.0% to 19.5% of banks NDTL. The ceiling on SLR security’s under HTM will also be reduced from 20.25% to 19.50% in a phased manner by March 31, 2018
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In its Fourth Bi-monthly policy, the MPC panel kept the policy rates unchanged at 6.00% while maintaining a neutral policy stance
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Consequently, the policy rates are as follows: Repo rate: 6%, Reverse Repo rate: 5.75%, MSF rate: 6.25%
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The panel revised its inflation projection upwards for the second half of FY18 to 4.2-4.6% from 4.0%-4.5% in the previous policy
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India’s eight-core sector growth came in at 4.9% compared to 2.6% observed in the previous month mainly aided by a sequential increase in output of coal, fertilizers, steel and electricity
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Real GVA growth has been revised downwards to 6.7% for FY18 from 7.3% previously
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Surprising on the downside, headline CPI for Sep-17 came in at 3.28% as food prices saw a sharp decline. Additionally, the print for Aug-17 was also revised downwards to 3.28% compared to 3.36% estimated previously.
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Core inflation, however, stood 11 bps higher at 4.61% compared to 4.50% as implementation of HRA under the 7th CPC continued to impact housing prices.
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IIP registered a 4.3% growth in Aug as compared to 1.2% observed in July led by broad based growth across all sectors, viz. Manufacturing at 3.5%, Electricity at 2.3% and Mining at 0.3%.
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