A stock market is a place where buyers and sellers interact with each other for trading purposes. Five stockbrokers started BSE, one of the renowned stock exchanges in Asia. Currently, there are 5400 shares listed on BSE. After the Harshad Mehta scam in 1992, the National Stock Exchange began to function. It is the fourth-largest in the world and one of the leading stock exchanges in India. At present, there are more than 1600 trade stocks listed on NSE.

Various Stocks That One Can Invest Through Stock Market:

1. Blue Chip Stocks:

The top hundred companies with the largest market capitalization and high-quality products and services mainly hold blue-chip stocks. These companies usually provide huge dividends to their shareholders. Blue-chip stocks have a good record of delivering high returns during economic recessions and adverse market situations. These stocks represent a significant chunk of the stock market, and the stockholders also appreciate their effective management practices.

2. Growth Stocks:

The stocks with the potential and ability to perform very well in the future are known as growth stocks. It is because the companies that have already generated considerably high returns are always ready to provide sustainable returns in the future.

3. Value Stocks:

A value stock is when the market price is below the inherent value. Value stocks are considerably undervalued, but sometimes, they can generate their actual intrinsic value. By evaluating the financial statements excluding intangible assets, investors can calculate the actual inherent value of the stocks.

4. Small-cap stocks:

Small-cap companies have the opportunities and strong potential to earn huge returns from the stock market. But these companies are mainly early-stage startups or small entrepreneurial ventures with low revenues and inconsistent returns. Sometimes, investment in small-cap stocks is very risky for trading account holders.

5. Mid-cap stocks:

Companies with a market capitalization between Rs 5000 crores and 20000 crores are the mid-cap stockholders. As there is a possibility of earning substantial returns in the long run, traders can easily get attracted by the mid-cap stocks. But conservative traders should avoid such shares because they cannot judge the stores’ potential.

6. Large-cap stocks:

Many well-established companies with more than Rs 20 thousand crores market capitalization are large-cap stockholders. These stocks have a strong presence in the market. Large-cap stocks are generally less risky as they provide complete and stable returns from the stock market every year.

Importance Of Using Various Stock Market Indices:

We use different Stock market trade indices to track the overall movements in the prices of the shares listed in the stock market. In addition, using a hypothetical portfolio of a basket of securities belonging to a particular industry, these indexes can also compare the current prices with past prices. In other words, it works as an indicator for capturing the changes in the stock market.

Nifty 50 is the collection of the fifty largest and most active stocks on the National Stock Exchange. The index represents the weighted average of the 50 largest Indian companies listed on NSE and helps investors gauge overall market sentiments by trading online. Sensex is the Bombay Stock Exchange’s flagship index and the collection of the thirty biggest, most well-established, and financially sound companies. These companies have the most actively traded stocks that are already on BSE. The term Sensex is also known as the sensitivity index.