Stock Market: What is it? A stock market is a marketplace where securities , such as stocks (equities) , bonds , and derivatives , are bought and sold. It enables companies to raise capital by issuing shares to the public, and provides investors with a platform to trade these securities. The market operates on the principles of supply and demand , where investors can buy and sell shares of publicly listed companies. Origin of the Stock Market: The concept of the stock market originated in Europe and was later adapted in other countries like the United States and India. Origin of the Concept (16th-17th Century): The first concept of trading shares began in Amsterdam, Netherlands , during the Dutch East India Company in the early 1600s. This company issued the first publicly traded shares, allowing citizens to buy and sell portions of the company. The London Stock Exchange (LSE) was established in the late 1600s and became a major center for stock trading. Stock Market in India: Th...

The Nifty 50 and Sensex are the two main stock market indices in India that represent the performance of the stock market. These indices are calculated daily using a formula based on market capitalization and free-float methodology . 🔹 1. Nifty 50 Calculation (NSE) The Nifty 50 index is managed by the National Stock Exchange (NSE) and represents the performance of the top 50 stocks across various sectors. 1.1 Formula for Nifty 50 Calculation Nifty 50 is calculated using the free-float market capitalization-weighted method : NIFTY 50 Index = ( ∑ ( Stock Price × Number of Shares × Free Float Factor ) Base Market Capitalization ) × 1000 \text{NIFTY 50 Index} = \left( \frac{\sum (\text{Stock Price} \times \text{Number of Shares} \times \text{Free Float Factor})}{\text{Base Market Capitalization}} \right) \times 1000 ✅ Where: Free Float Market Cap = Market price of a stock × Number of shares available for trading (free float). Base Market C...