Page 68 - DCOM304_INDIAN_FINANCIAL_SYSTEM

Unit 4: Indian Capital Market

Benchmark Indices futures: BSE 30 SENSEX, BSE 100, BSE TECK, BSE Oil and Gas, BSE Metal, BSE Notes
FMCG.

National Stock Exchange (NSE)

NSE was recognised as a stock exchange in April 1993 under the Securities Contracts (Regulation)
Act. It commenced its operations in Wholesale Debt Market in June 1994. The capital market
segment commenced its operations in November 1994, whereas the derivative segment started
in 2000. NSE introduced a fully automated trading system called NEAT (National Exchange for
Automated Trading) that operated on a strict price/time priority. This system enabled efficient
trade and the ease with which trade was done. NEAT had lent considerable depth in the market
by enabling large number of members all over the country to trade simultaneously, narrowing
the spreads significantly.
The derivatives trading on NSE commenced with S&P CNX Nifty Index futures on June 12, 2000.
The futures contract on NSE is based on S&P CNX Nifty Index. The Futures and Options trading
system of NSE, called NEAT-F&O trading system, provides a fully automated screen based
trading for S&P CNX Nifty futures on a nationwide basis and an online monitoring and
surveillance mechanism. It supports an order-driven market and provides complete transparency
of trading operations.
Benchmark Indices futures: Nifty Midcap 50 futures, S&P CNX Nifty futures, CNX Nifty Junior,
CNX IT futures, CNX 100 futures, Bank Nifty futures.

International Exchanges

Due to increasing globalization, the development at macro and micro levels in international
markets is compulsorily incorporated in the performance of domestic indices and individual
stock performance, directly or indirectly. Therefore, it is important to keep track of international
financial markets for better perspective and intelligent investment.

NASDAQ (National Association of Securities Dealers Automated Quotations)

NASDAQ is an American stock exchange. It is an electronic screen-based equity securities trading
market in the US. It was founded in 1971 by the National Association of Securities Dealers
(NASD). However, it is owned and operated by NASDAQ OMX group, the stock of which was
listed on its own stock exchange in 2002. The exchange is monitored by the Securities and
Exchange Commission (SEC), the regulatory authority for the securities markets in the United
States.
NASDAQ is the world leader in the arena of securities trading, with 3,900 companies (NASDAQ
site) being listed. There are four major indices of NASDAQ that are followed closely by the
investor class, internationally.
NASDAQ Composite: It is an index of common stocks and similar stocks like ADRs, tracking
stocks and limited partnership interests listed on the NASDAQ stock market. It is estimated that
the total components count of the Index is over 3,000 stocks and it includes stocks of US and non-
US companies, which makes it an international index. It is highly followed in the US and is an
indicator of performance of technology and growth companies. When launched in 1971, the
index was set at a base value of 100 points. Over the years, it saw new highs; for instance, in July
1995, it closed above 1,000-mark and in March 2000, it touched 5048.62. The decline from this
peak signaled the end of the dotcom stock market bubble. The Index never reached the 2000
level afterwards. It was trading at 1316.12 on November 20, 2008.

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