Indian Stock Market Tips

Indian Stock Market Tips

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HomeNRI CornerIndian Stock Market Tips

Indian Stock Market Tips

If you are thinking of investing in the Indian stock market you should have full information on the stock market trends in India, trading on BSE and NSE, BSE live, BSE online, BSE Sensex, NSE live, BSE stock exchange, NSE stock exchange, online trading, etc. The two stock exchanges in India are the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE). Both the stock exchanges are located in Mumbai, India.

There are a few trends that favor investing in the Indian stock market.

  • BSE has the third largest number of listed companies in the world. The total number of listed companies in 2010 was 4900. There are more than 7700 scrips on the stock exchange. The BSE SENSEX is a very popular market index in India.
  • The NSE is the largest stock exchange in India in terms of daily turnover and total trading in equities and derivatives. The NSE’s key index is the S&P CNX Nifty. This index represents fifty major stocks weighted by market capitalization.

Tips to understand the Indian Stock Market

Understand your financial goals. Are you comfortable in investing in stocks where the price changes each day? Do you have a stomach to take a hit on one trading day and jubilate on the following day? If you do not fit this profile, perhaps you should consider other investment options. There are several theories on the risk-reward ratio in the stock market. While some theorists postulate that higher risk can result in higher rewards, it is better to work towards your own financial goals and within your propensity to take risk.

  • The Indian stock market is growing faster than the U.S. market. However, the Indian stock market is more volatile and less mature than the U.S. stock market. The advantage of volatility is more returns but the cost can result in losses as well.
  • The regulations are different in both the countries. Be careful about foreign currency transactions.
  • Analyze a company, event, and overall market conditions before making an investment on the BSE or NSE.
  • NRIs cannot buy stocks directly and have to go through an RBI-approved agency. On the brighter side, mutual funds can be bought directly.
  • Recently a transaction cost has also been added for online trading.
  • It is possible to do online trading on both BSE and NSE.
  • Gather financial information before trading on the BSE or NSE. Learn how to read financial news and track stock charts. Set up Google alerts on your favorite companies. Use Google Finance for functions like getting real time stock quotes, currency conversions, portfolio analysis, etc.
  • Both BSE and NSE share information on the Price-Earnings Ratio, the Price to Book Value Ratio and the Dividend Yield Percentage every day for all its major indices. For example, the values of all BSE indices are updated on real time basis during market hours and displayed through the BOLT system, BSE website and news wire agencies.
  • If you have a smart phone, you can access Indian stock market trends anywhere, anytime. There are several applications on IPhone, HTC EVO 4 G, Blackberry, etc.
  • Get insider news about companies and company events that are likely to affect stock prices. Always follow major national events in India. For example, after the Budget is presented each year, there is a definite impact on the Indian stock market.
  • Look out for growing stocks that are likely to win in the long run. Focus on the product and service offerings of the companies. Diversify your portfolio by investing in safe Indian stocks, mutual funds, and pension plans and also put money on growing sectors like alternative energy, biochem, pharma, infrastructure, hotel industry, etc.
  • Always evaluate a company’s performance in the light of the investing environment. For example, if the political system in stable in India, it will be favorable for the stock markets. On the other hand, watch out for social and economic factors in the environment that would affect your wealth building objectives negatively.

Be mindful of your investments. Technology has made it so must easier to invest in India while living in the U.S. Once you pick up the tricks of the play you will enjoy investing in India. After all diversification and betting on growing economies is the need of the hour!

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