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Thursday, January 05, 2006

stoking the stock exchange

Those who dabble in shares wait with bated breath for the index to breach the 10K mark – it is nearing it. Last year the BSE index on 3rd January was 6679 and on the same date in 2003, it was 3357. To the commoner, these are just figures that appear in a corner of the TV screen like the cricket score or occupy hours of discussions with the knowledgeable folk on specific channels that cater to this elite group. We are occasionally treated to a view of the magnificent building of the Bombay Stock Exchange on Dalal Street. It is worthwhile to note that the name has not yet changed to MSE – Mumbai Stock Exchange.

The BSE is the hub of financial ups and downs – it is all about buying and selling and, like any other Stock Exchange, situations keep changing every micro second. There are rows of computers wired to the system and they constantly monitor the trends. The higher the index the more it reflects on the health of business, on the input from foreign institutional investments and on the downtrend in inflation. IT and pharmaceutical companies usually play a major role in maintaining stability of the index.
History - an informal group of 22 stockbrokers had been trading under a banyan tree opposite the Town Hall of Bombay from mid-1850s. This banyan tree still stands in Horniman Circle Park, Mumbai. This informal group of stockbrokers organized themselves as “The Native Share and Stockbrokers Association” which, in 1875, was formally organized as the Bombay Stock Exchange (BSE). BSE is the oldest stock exchange in Asia, the second being the Tokyo Stock Exchange, established in 1878.

http://en.wikipedia.org/wiki/Bombay_Stock_Exchange

In this context, it would be interesting to get enlightened on a couple of other global indices. First is NASDAQ. When it began trading on 8/12/1971, it was the world's first electronic stock market. On 17/7/1995 the NASDAQ stock index closed above the 1,000 mark for the first time. The index peaked at 5132.52 on 10/3/2000, which signaled the beginning of the end of the dot-com boom. NASDAQ is now the largest U.S. electronic stock market. NASDAQ (originally an acronym for National Association of Securities Dealers Automated Quotations) is a US electronic stock market. It was founded by the National Association of Securities Dealers (NASD) who divested it in a series of sales in 2000 and 2001. It is owned and operated by The Nasdaq Stock Market, Inc. NASDAQ: NDAQ which was listed on its own stock exchange in 2002.

http://en.wikipedia.org/wiki/Nasdaq

The Dow Jones Industrial Average (DJIA) is one of several stock market indices created by Wall Street Journal editor and Dow Jones & Company founder. Dow compiled the index as a way to gauge the performance of the industrial component of America's stock markets. It is the oldest continuing U.S. market index. First published on 26/5/1896, the DJIA represented the average of twelve stocks from various important American industries. Of those original twelve, only General Electric remains part of the average.

http://en.wikipedia.org/wiki/Dow_Jones_Industrial_Average

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