At the same time, the investor also undertakes the risk to bear loses, should the business fail to perform well.Market participants need to get registered with the stock exchange and market regulator Sebi to be able to trade in the stock market.
Buying and selling of stocks has to be done through brokers.Demat and trading accounts are provided by the two depositories, NSDL and CDSL, through brokerage firms.In order to open these accounts, one has to contact a brokerage.It is the oldest index in the country, while the Bombay Stock Exchange, now called BSE Limited, is the oldest exchange in Asia.The Sensex is managed and operated by a joint venture between BSE and S&P Dow Jones Indices, a global index manager.It is required for KYC (know your client) procedure while opening an account with the market regulator, the Securities and Exchange Board of India (Sebi).
Besides this, the government has mandated six-month bank statement along with a cancelled cheque, under the new rules to open a demat account.
First of all, the stocks must have a listing history of at least six months on BSE.
An exception may be granted if the average float-adjusted market capitalisation of a newly-listed stock ranks in the top 10 of all stocks listed on BSE.
As of September 2017, the Sensex index had the following stocks as its constituents: Wipro, Coal India, HDFC, ITC, M&M, Tata Motors, Power Grid, Maruti, Kotak Bank, HDFC Bank, TCS, ONGC, Bharti Airtel, NTPC, Asian Paint, Sun Pharma, Dr Reddy's, HUL, Infosys, Bajaj Auto, Cipla, Axis Bank, Lupin, Adani Ports, SBI, Hero Moto Corp, ICICI Bank, Reliance Industries, L&T and Tata Steel.
The stock market is a share market, however besides shares of companies, other instruments are traded too.
The Sensex, also known as the sensitivity index, is the benchmark index of BSE Limited and is the most widely tracked equity gauge in India.