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Executive Summary

The report encompasses the project undertaken with Edelweiss Financial Securities Ltd under the guidance of Mr. Om Sadani as part of Summer Internship.It gives the details of what is National Stock Exchange (N.S.E) and Bombay Stock Exchange (B.S.E) actually means. It also gives a brief about Edelweiss Financial Securities Ltd. The report contains the details of the work performed at the Edelweiss and some responsibilities under taken.

The report takes into consideration the following parameters i.e.:

Equity Research Daily Market Analysis Report Daily Sector Comparison Report

It provides with the basic of how online trading is done. It also gave a brief introduction to Indian Stock markets and its comparison with the international market. It also provided information on global markets which is being highlighted in this report.

Through this project we also came to know about the comparison between the sectors for example in this project comparison between Banking and IT sector have taken in to consideration. We also learned about option, futures, forwards and swaps. This project also highlights the behavior of investors towards a particular sector in BSE and NSE. This project gives us information about the how volatile ours share market is and how the trend of a particular sector and Equity Stock changes in a given period. This project also highlights different sectors. Through this project we also came to known about portfolio management services.

Company Profile

Edelweiss Tokio Financial Services

Edelweiss Tokio Life Insurance is a new generation Insurance company, set up with a start up capital of INR 550 Crores, thereby showing our commitment to building a long term sustainable business focused on a consumer centric approach.

The company is a joint venture between Edelweiss Financial Services, one of India's leading diversified financial services companies with business straddling across Credit, Capital Markets, Asset Management, Housing finance and Insurance and Tokio Marine Holdings Inc, one of the oldest and the biggest Insurance companies in Japan now with presence across 39 countries around the world.

As a part of the companys corporate philosophy of customer centricity, our products have been developed based on our understanding of Indian customers diverse financial needs and help them through all their life stages

Since its inception in 1996, Edelweiss has seamlessly grown into a large diversified financial services organization offering businesses ranging from Credit, Capital Market, Asset management, Housing Finance and Insurance. Currently, the groups networth is in excess of INR 2,800 Crores. Over the last decade, Edelweiss revenue has grown at a CAGR of 63% and net profit has grown at a CAGR of 76% (till the end of FY 11).

Present across 308 offices in 140 cities, the group, with over 2800 employees, and services a client base of more than 3,50,000 (Sept 11).

The Groups core brand philosophy, Ideas Create, Values Protect is translated into an approach that is led by entrepreneurship and creativity, protected by intellectual rigour, research and analysis. Edelweiss has been recognized as a Business Super brand in the year 2011 by Super Brands India, testimony to the reputation enjoyed by the brand.

Tokio Marine

Tokio Marine Holdings Inc, the holding company for Tokio Marine group is one of the oldest and biggest Insurance companies in Japan; with interests in Life, Non-Life, and Re-Insurance, it has a presence in 427 cities across 39 countries around the world.

The company has over 130 years of operational history in the Non-Life sector while it has been in Life Insurance since 1996. It has a presence in Japan, China, Singapore, Malaysia and Thailand.

The Group has booked revenues of INR 1,77,650 Crore and Net Income of INR 3,884 Crore.

In Life Insurance its Gross Written Premium (GWP) is over INR 31,834 Crore.

A highly respected company around the world, Tokio Marine adheres to Japanese high standards of quality and a robust corporate governance and risk management framework.

Tokio Marine has a successful track record of building business in developing and developed markets due to its superior capability of developing products based on research and consumer understanding.

Financial services by Edelweiss Tokio

Capital Market

Investment Banking Institutional Broking Wealth Management

Financial Planning

Asset Management

Mutual fund Alternative asset advisory

Insurance Edelweiss tokio lifeCredit Corporate credit Retail creditHousing Finance

Home lones

Fixed Income

LITERATURE REVIEWThe Indian stock market provides a unique perspective for analyzing comovements and stock market integration because of its burgeoning economy and its subsequent linkages to other economies. For instance, Modi et al.(2010) examined the stock market indices of India, Hong Kong, China, Mexico, Brazil, the UK, and the United States from July 1, 1997, to June 30, 2008. Using a multivariate analysis consisting of co-integration and principal component analysis, they found that low correlations exist between Indian stock markets and Mexico, the UK ,and the United States. Modi et al. also found that the lowest correlations exist between the India (SENSEX) and U.S. (NASDAQ) stock exchanges. The implications are that investors can diversify their portfolios by investingin stocks listed on the SENSEX and NASDAQ simultaneously. Wong et al. (2004) observed this relationship by evaluating the long run and short run relationship and linkages between the Indian Stock Exchange (BSE 200) and the United States (S&P 500), Japan (Nikkei 225), and UK(FTSE 100) from January 1, 1991, to December 31, 2003. Wong et al. found that the Indian stock market isintegrated with developed markets and sensitive to dynamics in these markets in the long run. The researchers also found that short-run stock returns in the United States and Japan Granger cause Indian stock markets but not the opposite. Granger causality is a technique that examines the relationship between two or more time series by examining whether times series are co-integrated over both the short and long run. Valadkhani, Chancharat, and Harvie (2008) studied the relationships between the stock market returns of 13 countries using principle component analysis. Monthly data from 1987 to 2007 was examined for correlations using Morgan Stanley Capital International Database. Valadkhaniet al. found that high correlations exist between countries located in the same geographic region primarily Asia. Additionally, a correlation were found to be high in developing countries as well. These findings suggest that geographic and economic development do matter with respect to comovements ofstock returns and has implications for financial portfolio diversification and reducing systemic risk. In other words, high correlations depict less diversification opportunities. The implications are that investors should seekdiversification opportunities where correlations are low. Likewise, Jin (2005) observed this relationship between Shanghai, Hong Kong, and Taiwan markets. Daily, weekly, and monthly data were retrieved from three indices in host countries from July 1997 to December 2001.The findings revealed that the Hong Kong and Taiwan stockmarkets are highly correlated while the correlations among Hong Kong, Taiwan, and Shanghai were not, even though economic integration was shown by examining trade. The researcher further suggests that the Chinese government avoid interfering with the market and allow the market to perform accordingly. He also found that thelack of correlation among Shanghai, Hong Kong, and Taiwan depicts that investors are able to diversify their portfolios by investing in Shanghai and Hong Kong or Shanghai and Taiwan stock markets simultaneously .Economic integration allows investors to diversify their portfolios. However, economic integration is not the only factor that affects co-movements.

Global events and financial crises also affect comovements. For instance, I. Meric, Ratner, Nygren, and Gulser (2007) compared the comovements of seven Latin American counties with the U.S. and Canadian equity markets 5 years before September 11, 2001, and 5 years after September 11, 2001, using maximum likelihood, principal component analysis (PCA), and Granger causality. They found that equity markets changed significantly pre-September 11 and post-September 11. The PCA indicated that all nine equity markets changed after September 11. I. Meric et al. also found Granger causality depicted that the lead/lag relationship changed significantly after September 11. I. Mericetal. found that diversification benefits diminished after September 2001in these stock markets and reduced the advantages ofglobal portfolio diversification.Article byInternational Journal of Business and Social Science Vol. 3 No. 3; February 2012COMOVEMENTS AND STOCK MARKET INTEGRATION BETWEEN INDIA AND ITS TOPTRADING PARTNERS: A MULTIVARIATE ANALYSIS OF INTERNATIONAL PORTFOLIODIVERSIFICATIONAlan Harper, Ph.D.College of Business South University Virginia Beach, Virginia 23464USAZhenhu Jin, Ph.D.College of Business Valparaiso University Valparaiso, Indiana 46385USa

RATIONALE FOR THE STUDY

In an industry plagued with skepticism and a stock market increasingly difficult to predict and contend with, if one looks hard enough there may still be a genuine aid for the Day Trader and Short Term Investor.The price of a security represents a consensus. It is the price at which one person agrees to buy and another agrees to sell. The price at which an investor is willing to buy or sell depends primarily on his expectations. If he expects the security's price to rise, he will buy it; if the investor expects the price to fall, he will sell it. These simple statements are the cause of a major challenge in forecasting security prices, because they refer to human expectations. As we all know firsthand, humans expectations are neither easily quantifiable nor predictable.If prices are based on investor expectations, then knowing what a security should sell for (i.e., fundamental analysis) becomes less important than knowing what other investors expect it to sell for. That's not to say that knowing what a security should sell for isn't important--it is. But there is usually a fairly strong consensus of a stock's future earnings that the average investor cannot disproveFundamental analysis and technical analysis can co-exist in peace and complement each other. Since all the investors in the stock market want to make the maximum profits possible, they just cannot afford to ignore either fundamental or technical analysis.

OBJECTIVES OF THE STUDY

Primary Objective:

To do equity analysis & Sector analysis

Sub-Objectives:.

a) To understand the movement and performance of stocks.

b) Comparison between banking & IT sector.

c) To recommend increase/decrease of investment in a particular security

INTRODUCTION TO BOMBAY STOCK EXCHANGE (B.S.E)

The Bombay Stock Exchange (BSE) (Bombay hare Bzar) (formerly, The Stock Exchange, Bombay) is a stock exchange located on Dalal Street, Mumbai and is the oldest stock exchange in Asia. The equity market capitalization of the companies listed on the BSE was US$1 trillion as of December 2011, making it the 6th largest stock exchange in Asia and the 14th largest in the world The BSE has the largest number of listed companies in the world.As of March 2012, there are over 5,133 listed Indian companies and over 8,196 scrips on the stock exchange, the Bombay Stock Exchange has a significant trading volume. The BSE SENSEX, also called "BSE 30", is a widely used market index in India and Asia. Though many other exchanges exist, BSE and the National Stock Exchange of India account for the majority of the equity trading in India. While both have similar total market capitalization (about USD 1.6 trillion), share volume in NSE is typically two times that of BSEBSE Limited is the oldest stock exchange in Asia What is now popularly known as the BSE was established as "The Native Share & Stock Brokers' Association" in 1875.

Over the past 135 years, BSE has facilitated the growth of the Indian corporate sector by providing it with an efficient capital raising platform.

Today, BSE is the world's number 1 exchange in the world in terms of the number of listed companies handled through its electronic trading system. And it is in the top ten of global exchanges in terms of the market capitalization of its listed companies (as of December 31, 2009). The companies listed on BSE command a total market capitalization of USD Trillion 1.28 as of Feb, 2010.

BSE is the first exchange in India and the second in the world to obtain an ISO 9001:2000 certification. It is also the first Exchange in the country and second in the world to receive Information Security Management System Standard BS 7799-2-2002 certification for its BSE On-Line trading System (BOLT). Presently, we are ISO 27001:2005 certified, which is a ISO version of BS 7799 for Information Security.

The BSE Index, SENSEX, is India's first and most popular Stock Market benchmark index. Exchange traded funds (ETF) on SENSEX, are listed on BSE and in Hong Kong. Futures and options on the index are also traded at BSE. (over 4900). It is the world's 5th most active in terms of number of transactions

Hours of operation

SessionTiming

Beginning of the Day Session8:30 - 9:00

Pre-open trading session9:00 - 9:15

Trading Session9:15 - 15:30

Position Transfer Session15:30 - 15:50

Closing Session15:50 - 16:05

Option Exercise Session16:05 -

The hours of operation for the BSE quoted above are stated in terms the local time (GMT + 5:30). BSE's normal trading sessions are on all days of the week except Saturday, Sundays and holidays declared by the Exchange in advance.

History

The Bombay Stock Exchange is the oldest exchange in Asia. It traces its history to the 1850s, when four Gujarati and one Parsi stockbroker would gather under banyan trees in front of Mumbai's Town Hall. The location of these meetings changed many times, as the number of brokers constantly increased. The group eventually moved to Dalal Street in 1874 and in 1875 became an official organization known as 'The Native Share & Stock Brokers Association'.

In 1956, the BSE became the first stock exchange to be recognized by the Indian Government under the Securities Contracts Regulation Act. The Bombay Stock Exchange developed the BSE SENSEX in 1986, giving the BSE a means to measure overall performance of the exchange. In 2000 the BSE used this index to open its derivatives market, trading SENSEX futures contracts. The development of SENSEX options along with equity derivatives followed in 2001 and 2002, expanding the BSE's trading platform. Historically an open outcry floor trading exchange, the Bombay Stock Exchange switched to an electronic trading system in 1995.

It took the exchange only fifty days to make this transition. This automated, screen-based trading platform called BSE On-line trading (BOLT) currently has a capacity of 8 million orders per day. The BSE has also introduced the world's first centralized exchange-based internet trading system, BSEWEBx.co.in to enable investors anywhere in the world to trade on the BSE platform. The BSE is currently housed in Phiroze Jeejeebhoy Towers at Dalal Street, Fort area.

TimelineFollowing is the timeline on the rise of the SENSEX through Indian stock market history.1830's Business on corporate stocks and shares in Bank and Cotton presses started in Mumbai.1860-1865 Cotton price bubble as a result of the American Civil War.1870 - 90's Sharp increase in share prices of jute industries followed by a boom in tea stocks and coal1978-79 Base year of SENSEX, defined to be 100.1986 SENSEX first compiled using a market Capitalization-Weighted methodology for 30 component stocks representing well-established companies across key sectors.30 October 2006 The SENSEX on October 30, 2006 crossed the magical figure of 13,000 and closed at 13,024.26 points, up 117.45 points or 0.9%. It took 135 days for the SENSEX to move from 12,000 to 13,000 and 123 days to move from 12,500 to 13,000.5 December 2006 The SENSEX on December 5, 2006 crossed the 14,000-mark to touch 14,028 points. It took 36 days for the SENSEX to move from 13,000 to the 14,000 mark.6 July 2007 The SENSEX on July 6, 2007 crossed the magical figure of 15,000 to touch 15,005 points in afternoon trade. It took seven months for the SENSEX to move from 14,000 to 15,000 points.19 September 2007 The SENSEX scaled yet another milestone during early morning trade on September 19, 2007. Within minutes after trading began, the SENSEX crossed 16,000, rising by 450 points from the previous close. The 30-share Bombay Stock Exchange's sensitive index took 53 days to reach 16,000 from 15,000. Nifty also touched a new high at 4659, up 113 points. The SENSEX finally ended with a gain of 654 points at 16,323. The NSE Nifty gained 186 points to close at 4,732.26 September 2007 The SENSEX scaled yet another height during early morning trade on September 26, 2007. Within minutes after trading began, the SENSEX crossed the 17,000-mark. Some profit taking towards the end saw the index slip into red to 16,887 - down 187 points from the day's high. The SENSEX ended with a gain of 22 points at 16,921.9 October 2007 The BSE SENSEX crossed the 18,000-mark on October 9, 2007. It took just 8 days to cross 18,000 points from the 17,000 mark. The index zoomed to a new all-time intra-day high of 18,327. It finally gained 789 points to close at an all-time high of 18,280. The market set several new records including the biggest single day gain of 789 points at close, as well as the largest intra-day gains of 993 points in absolute term backed by frenzied buying after the news of the UPA and Left meeting on October 22 put an end to the worries of an impending election.15 October 2007 The SENSEX crossed the 19,000-mark backed by revival of funds-based buying in blue chip stocks in metal, capital goods and refinery sectors. The index gained the last 1,000 points in just four trading days. The index touched a fresh all-time intra-day high of 19,096, and finally ended with a smart gain of 640 points at 19,059.The Nifty gained 242 points to close at 5,670.29 October 2007 The SENSEX crossed the 20,000 mark on the back of aggressive buying by funds ahead of the US Federal Reserve meeting. The index took only 10 trading days to gain 1,000 points after the index crossed the 19,000-mark on October 15. The major drivers of today's rally were index heavyweights Larsen and Toubro, Reliance Industries, ICICI Bank, HDFC Bank and SBI among others. The 30-share index spurted in the last five minutes of trade to fly-past the crucial level and scaled a new intra-day peak at 20,024.87 points before ending at its fresh closing high of 19,977.67, a gain of 734.50 points. The NSE Nifty rose to a record high 5,922.50 points before ending at 5,905.90, showing a hefty gain of 203.60 points.8 January 2008 The SENSEX peaks. It crossed the 21,000 mark in intra-day trading after 49 trading sessions. This was backed by high market confidence of increased FII investment and strong corporate results for the third quarter. However, it later fell back due to profit booking.13 June 2008 The SENSEX closed below 15,200 mark, Indian market suffer with major downfall from January 21, 200825 June 2008 The SENSEX touched an intra day low of 13,731 during the early trades, then pulled back and ended up at 14,220 amidst a negative sentiment generated on the Reserve Bank of India hiking CRR by 50 bps. FII outflow continued in this week.2 July 2008 The SENSEX hit an intra day low of 12,822.70 on July 2, 2008. This is the lowest that it has ever been in the past year. Six months ago, on January 10, 2008, the market had hit an all time high of 21206.70. This is a bad time for the Indian markets, although Reliance and Infosys continue to lead the way with mostly positive results.6 October 2008 The SENSEX closed at 11801.70 hitting the lowest in the past 2 years.10 October 2008 The SENSEX today closed at 10527, 800.51 points down from the previous day having seen an intraday fall of as large as 1063 points. Thus, this week turned out to be the week with largest percentage fall in the SENSEX.19 October 2010 BSE introduced the 15-minute special pre-open trading session, a mechanism under which investors can bid for stocks before the market opens. The mechanism, known as 'pre-open session call auction', lasted for 15 minutes (from 9:00-9:15 am)5 November 2010 BSE SENSEX crossed the 21000 mark (exactly 21004.96).

27 December 2010 BSE SENSEX is at 20,028.93.

IndicesThe launch of SENSEX in 1986 was later followed up in January 1989 by introduction of BSE National Index (Base: 1983-84 = 100). It comprised 100 stocks listed at five major stock exchanges in India - Mumbai, Calcutta, Delhi, Ahmedabad and Madras. The BSE National Index was renamed BSE-100 Index from October 14, 1996 and since then, it is being calculated taking into consideration only the prices of stocks listed at BSE.BSE launched the dollar-linked version of BSE-100 index on May 22, 2006. BSE launched two new index series on 27 May 1994: The 'BSE-200' and the 'DOLLEX-200'. BSE-500 Index and 5 sectoral indices were launched in 1999. In 2001, BSE launched BSE-PSU Index, DOLLEX-30 and the country's first free-float based index - the BSE TECk Index.Over the years, BSE shifted all its indices to the free-float methodology (except BSE-PSU index). BSE disseminates information on the Price-Earnings Ratio, the Price to Book Value Ratio and the Dividend Yield Percentage on day-to-day basis of all its major indices. 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.All BSE Indices are reviewed periodically by the BSE Index Committee. This Committee which comprises eminent independent finance professionals frames the broad policy guidelines for the development and maintenance of all BSE indices. The BSE Index Cell carries out the day-to-day maintenance of all indices and conducts research on development of new indices. 2011 SENSEX is significantly correlated with the stock indices of other emerging markets.

The graph of SENSEX from July 1997 to March.

Awards

The World Council of Corporate Governance has awarded the Golden Peacock Global CSR Award for BSE's initiatives in Corporate Social Responsibility (CSR). The Annual Reports and Accounts of BSE for the year ended March 31, 2006 and March 31, 2007 have been awarded the ICAI awards for excellence in financial reporting. It has been cited as one of the world's best performing stock market by Reuters. The Human Resource Management at BSE has won the Asia - Pacific HRM awards for its efforts in employer branding through talent management at work, health management at work and excellence in HR through technology. Bombay Stock Exchange - Finance Learners

INTRODUCTION TO NATIONAL STOCK EXCHANGE (N.S.E )

The National Stock Exchange (NSE) (Hindi: Rashtriya hare Bzar) is a stock exchange located at Mumbai, India. It is the 16th largest stock exchange in the world by market capitalization and largest in India by daily turnover and number of trades, for both equities and derivative trading. NSE has a market capitalization of around US$985 billion and over 1,646 listings as of December 2011. Though a number of other exchanges exist, NSE and the Bombay Stock Exchange are the two most significant stock exchanges in India, and between them are responsible for the vast majority of share transactions. The NSE's key index is the S&P CNX Nifty, known as the NSE NIFTY (National Stock Exchange Fifty), an index of fifty major stocks weighted by market capitalisation.NSE is mutually owned by a set of leading financial institutions, banks, insurance companies and other financial intermediaries in India but its ownership and management operate as separate entities. There are at least 2 foreign investors NYSE Euronext and Goldman Sachs who have taken a stake in the NSE. As of 2006[update], the NSE VSAT terminals, 2799 in total, cover more than 1500 cities across India. NSE is the third largest Stock Exchange in the world in terms of the number of trades in equities. It is the second fastest growing stock exchange in the world with a recorded growth of 16.6%.The National Stock Exchange (NSE) is India's leading stock exchange covering various cities and towns across the country. NSE was set up by leading institutions to provide a modern, fully automated screen-based trading system with national reach. The Exchange has brought about unparalleled transparency, speed & efficiency, safety and market integrity. It has set up facilities that serve as a model for the securities industry in terms of systems, practices&procedures.

NSE has played a catalytic role in reforming the Indian securities market in terms of microstructure, market practices and trading volumes. The market today uses state-of-art information technology to provide an efficient and transparent trading, clearing and settlement mechanism, and has witnessed several innovations in products & services viz. demutualisation of stock exchange governance, screen based trading, compression of settlement cycles, dematerialisation and electronic transfer of securities, securities lending and borrowing, professionalization of trading members, fine-tuned risk management systems, emergence of clearing corporations to assume counterparty risks, market of debt and derivative instruments and intensive use of information technology.

OriginsThe National Stock Exchange of India was set up by Government of India on the recommendation of Pherwani Committee in 1991.Promoted by leading Financial institutions essentially led by IDBI at the behest of the Government of India, it was incorporated in November 1992 as a tax-paying company. In April 1993, it was recognized as a stock exchange under the Securities Contracts (Regulation) Act, 1956. NSE commenced operations in the Wholesale Debt Market (WDM) segment in June 1994. The Capital market (Equities) segment of the NSE commenced operations in November 1994, while operations in the Derivatives segment commenced in June 2000.PurposeCommitted to improve the financial well-being of people.VisionTo continue to be a leader, establish global presence, facilitate the financial well being of people.

ValuesNSE is committed to the following core values : Integrity Customer focussed culture Trust, respect and care for the individual Passion for excellence TeamworkMarketsCurrently, NSE has the following major segments of the capital market: Equity Futures and options Retail debt market Wholesale debt market Currency futures Mutual fund Stocks lending and borrowingIn August 2008 currency derivatives were introduced in India with the launch of Currency Futures in USD INR by NSE. Currently it has also launched currency futures in euros, pounds and yen. Interest Rate Futures were introduced for the first time in India by NSE on 31 August 2009, exactly one year after the launch of Currency Futures.NSE became the first stock exchange to get approval for interest rate futures, As recommended by SEBI-RBI committee, on 31 August 2009, a futures contract based on 7% 10 Year Government of India (Notional) was launched with quarterly maturities.

HoursNSE's normal trading sessions. 9:15 AM TO 3:15(3:30) pmMilestones November 1992 Incorporation April 1993 Recognition as a stock exchange May 1993 Formulation of business plan June 1994 Wholesale Debt Market segment goes live November 1994 Capital Market (Equities) segment goes live March 1995 Establishment of Investor Grievance Cell April 1995 Establishment of NSCCL, the first Clearing Corporation June 1995 Introduction of centralised insurance cover for all trading members July 1995 Establishment of Investor Protection Fund October 1995 Became largest stock exchange in the country April 1996 Commencement of clearing and settlement by NSCCL April 1996 Launch of S&P CNX Nifty June 1996 Establishment of Settlement Guarantee Fund November 1996 Setting up of National Securities Depository Limited, first depository in India, co-promoted by NSE November 1996 Best IT Usage award by Computer Society of India December 1996 Commencement of trading/settlement in dematerialised securities December 1996 Dataquest award for Top IT User December 1996 Launch of CNX Nifty Junior February 1997 Regional clearing facility goes live November 1997 Best IT Usage award by Computer Society of India May 1998 Promotion of joint venture, India Index Services & Products Limited (IISL) May 1998 Launch of NSE's Web-site: www.nse.co.in July 1998 Launch of NSE's Certification Programme in Financial Market August 1998 CYBER CORPORATE OF THE YEAR 1998 award yes. February 1999 Launch of Automated Lending and Borrowing Mechanism April 1999 CHIP Web Award by CHIP magazine October 1999 Setting up of NSE.IT January 2000 Launch of NSE Research Initiative February 2000 Commencement of Internet Trading June 2000 Commencement of Derivatives Trading (Index Futures) September 2000 Launch of 'Zero Coupon Yield Curve' November 2000 Launch of Broker Plaza by Dotex International, a joint venture between NSE.IT Ltd. and i-flex Solutions Ltd. December 2000 Commencement of WAP trading June 2001 Commencement of trading in Index Options July 2001 Commencement of trading in Options on Individual Securities November 2001 Commencement of trading in Futures on Individual Securities December 2001 Launch of NSE VaR for Government Securities January 2002 Launch of Exchange Traded Funds (ETFs) May 2002 NSE wins the Wharton-Infosys Business Transformation Award in the Organization-wide Transformation category October 2002 Launch of NSE Government Securities Index January 2003 Commencement of trading in Retail Debt Market June 2003 Launch of Interest Rate Futures August 2003 Launch of Futures & options in CNXIT Index June 2004 Launch of STP Interoperability August 2004 Launch of NSEs electronic interface for listed companies March 2005 India Innovation Award by EMPI Business School, New Delhi June 2005 Launch of Futures & options in BANK Nifty Index December 2006 'Derivative Exchange of the Year', by Asia Risk magazine January 2007 Launch of NSE CNBC TV 18 media centre March 2007 NSE, CRISIL announce launch of IndiaBondWatch.com June 2007 NSE launches derivatives on Nifty Junior & CNX 100 October 2007 NSE launches derivatives on Nifty Midcap 50 January 2008 Introduction of Mini Nifty derivative contracts on 1 January 2008 March 2008 Introduction of long term option contracts on S&P CNX Nifty Index April 2008 Launch of India VIX April 2008 Launch of Securities Lending & Borrowing Scheme August 2008 Launch of Currency Derivatives August 2009 Launch of Interest Rate Futures November 2009 Launch of Mutual Fund Service System December 2009 Commencement of settlement of corporate bonds February 2010 Launch of Currency Futures on additional currency pairs October 2010 Launch of 15-minute special pre-open trading session, a mechanism under which investors can bid for stocks before the market opens. October, 2010 Introduction of Currency Options on USD INR October, 2010 Introduction of European Style Stock Options November, 2010 Launch of mobile trading for all investors December, 2010 NSCCL rated 'CCR AAA' for third consecutive year. January, 2011 NSE receives "Financial Inclusion" Award. July, 2011 Commencement of trading in 91 Day GOI Treasury Bill Futures August 2011 Launch of derivatives on Global Indices September 2011 Launch of derivatives on CNX PSE and CNX Infrastructure Indices December 2011 NSCCL Rated CCR AAA for fourth consecutive year - 28th Dec 2011 March 14, 2012 NSE launches EMERGE SME Platform March 22, 2012 NSE and India Post start Unique Financial Inclusion Initiative "Jagruti"

IndicesNSE also set up as index services firm known as India Index Services & Products Limited (IISL) and has launched several stock indices, including: S&P CNX Nifty(Standard & Poor's CRISIL NSE Index) CNX Nifty Junior CNX 100 (= S&P CNX Nifty + CNX Nifty Junior) S&P CNX 500 (= CNX 100 + 400 major players across 72 industries) CNX Midcap (introduced on 18 July 2005 replacing CNX Midcap 200)

Graph of S&P CNX Nifty from January 1997 to March 2011

Exchange Traded Funds on NSE

NSE has a number of exchange traded funds. These are typically index funds and GOLD ETFs. Some of the popular ETF's available for trading on NSE are:Equity ETFs on NSE: Nifty Goldman Sachs Nifty Exchange Traded Scheme (NIFTYBEES) Junior Nifty Goldman Sachs Nifty Junior Exchange Traded Scheme (JUNIORBEES) Bank Goldman Sachs Banking Index Exchange Traded Scheme (BANKBEES) PSU Bank Goldman Sachs PSU Bank Exchange Traded Scheme (PSUBNKBEES) Shariah Goldman Sachs S&P CNX Nifty Shariah Index Exchange Traded Scheme (SHARIABEES) Infrastructure Goldman Sachs Infrastructure Exchange Traded Scheme (INFRABEES) S&P CNX Nifty UTI Notional Depository Receipts Scheme (UTISUNDER) KOTAK PSU Bank ETF (KOTAKPSUBK) Reliance Banking ETF (RELBANK) Quantum Index ETF (QNIFTY) KOTAK NIFTY (KOTAK NIFTY) MOSt Shares M50 ETF (M50) MOSt Shares M100 ETF (M100)Gold ETFs: AXIS MF AXIS GOLD ETF (AXISGOLD) GOLDMAN SACHS GOLD EXCHANGE TRADED SCHEME (GOLDBEES) UTI GOLD ETF (GOLDSHARE) HDFC GOLD ETF (HDFCMFGETF) ICICI PRUDENTIAL GOLD ETF (IPGETF) KOTAK GOLD ETF (KOTAKGOLD) QUANTUM GOLD FUND (QGOLDHALF) RELIANCE GOLD ETF (RELGOLD) RELIGARE GOLD ETF (RELIGAREGO) SBI MF-SBI GOLD ETS-GO (SBIGETS) IDBI GOLD ETF (IDBIGOLD) (Newly added)World Indices ETFs: GS Hang Seng BeES (HNGSNGBEES) MOSt Shares NASDAQ 100 (N100)Debt ETFs: GS Liquid BeES (LIQUIDBEES)

Certifications

NSE also conducts online examination and awards certification, under its programmes of NSE's Certification in Financial Markets (NCFM). Currently, certifications are available in 32 modules, covering different sectors of financial and capital markets, both at beginner and advanced levels. the list of the various modules can be found at the following official site of NSE India. Branches of the NSE are located throughout India. NSE, in collaboration with reputed colleges and institutes in India, has been offering a short-term course called NSE Certified Capital Market Professional (NCCMP) since August 2009, in the campuses of the respective colleges/ institutes.

INTRODUCTIONInvesting, like marriage, isn't something that should be entered into lightly. Investing in equities gives high returns but they correspondingly have higher risk also. Before we invest in a company, there are more than a few things we need to know about it.Securities AnalysisAn analysis of securities and the organization and operation of their markets. The determination of the risk reward structure of equity and debt securities and their valuation. Special emphasis on common stocks. Other topics include options, mutual fluids and technical analysis.Technical analysis is a method of predicting price movements and future market trends by studying charts of past market action which take into account price of instruments, volume of trading and, where applicable, open interest in the instruments.Fundamental analysis is a method of forecasting the future price movements of a financial instrument based on economic, political, environmental and other relevant factors and statistics that will affect the basic supply and demand of whatever underlies the financial instrument.

Main differences between the two types of analysis:

Fundamental analysisTechnical analysis

Focuses on what ought to happen in a marketFocuses on what actually happens in a market

Factors involved in price analysis:1. Supply and demand 2.Seasonal cycles 3.Weather 4. Government policyCharts are based on market action involving:1.Price2.Volume3. Open interest (futures only)

TECHNICAL ANALYSISTechnical analysis can be conditionally divided into some main parts such as: Types of charts Graphical methods Analytical methodsTechnical analysis is concerned with predicting future price trends from historical price and volume data. The underlying axiom of technical analysis is that all fundamentals (including expectations) are factored into the market and are reflected in exchange rates.A technical analysis is based on three axioms: Movement of the market considers everything Movement of prices is purposeful History repeats itselfSUPPORT AND RESISTANCESupport is a level at which bulls (i.e., buyers) take control over the prices and prevent them from falling lower.

Resistance, on the other hand, is the point at which sellers (bears) take control of prices and prevent them from rising higher. The price at which a trade takes place is the price at which a bull and bear agree to do business. It represents the consensus of their expectations.

Support levels indicate the price where the most of investors believe that prices will move higher. Resistance levels indicate the price at which the most of investors feel prices will move lower.

Role ReversalWhen a resistance level is successfully broken through, that level becomes a support level. Similarly, when a support level is successfully broken through, that level becomes a resistance level.

DOW THEORY TRENDS:The ideas of Charles Dow, the first editor of the Wall Street Journal, form the basis of technical analysis. The Dow theory is a method of interpreting and signaling changes in the stock market direction based on the monitoring of the Dow Jones Industrial and Transportation Averages. Dow created the Industrial Average, of top blue chip stocks, and a second average of top railroad stocks (now the Transport Average). He believed that the behavior of the averages reflected the hopes and fears of the entire market.The behavior patterns that he observed apply to markets throughout the world.Three MovementsMarkets fluctuate in more than one time frame at the same time:Nothing is more certain than that the market has three well defined movements which fit into each other. The first is the daily variation due to local causes and the balance of buying and selling at that particular time. The secondary movement covers a period ranging from ten days to sixty days, averaging probably between thirty and forty days. The third move is the great swing covering from four to six years.

Bull markets are broad upward movements of the market that may last several years, interrupted by secondary reactions. Bear markets are long declines interrupted by secondary rallies. These movements are referred to as the primary trend. Secondary movements normally retrace from one third to two thirds of the primary trend since the previous secondary movement. Daily fluctuations are important for short-term trading, but are unimportant in analysis of broad market movements.Various cycles have subsequently been identified within these broad categories.

Primary Movements have Three PhasesThe general conditions in the market:Bull markets Bull markets commence with reviving confidence as business conditions improve. Prices rise as the market responds to improved earnings Rampant speculation dominates the market and price advances are based on hopes and expectations rather than actual results.

Bear markets Bear markets start with abandonment of the hopes and expectations that sustained inflated prices. Prices decline in response to disappointing earnings. Distress selling follows as speculators attempt to close out their positions and securities are sold without regard to their true value.

TrendsBull TrendsA bull trend is identified by a series of rallies where each rally exceeds the highest point of the previous rally. The decline, between rallies, ends above the lowest point of the previous decline.

Successive higher highs and higher lows.

The start of an up trend is signaled when price makes a higher low (trough), followed by a rally above the previous high (peak):Start = higher Low + break above previous High.The end is signaled by a lower high (peak), followed by a decline below the previous low (trough): End = lower High + break below previous Low.

A bear trend starts at the end of a bull trend: when a rally ends with a lower peak and then retreats below the previous low. The end of a bear trend is identical to the start of a bull trend.

FUNDAMENTAL ANALYSIS

Fundamental analysis refers to the study of the core underlying elements that influence the economy of a particular entity. It is a method of study that attempts to predict price action and market trends by analyzing economic indicators, government policy and societal factors (to name just a few elements) within a business cycle framework.I. ECONOMIC ANALYSIS:POLITICO-ECONOMIC ANALYSIS:No industry or company can exist in isolation. It may have splendid managers and a tremendous product. However, its sales and its costs are affected by factors, some of which are beyond its control - the world economy, price inflation, taxes and a host of others. It is important, therefore, to have an appreciation of the politico-economic factors that affect an industry and a company.II. INDUSTRY ANALYSISThe importance of industry analysis is now dawning on the Indian investor as never before.1. BARRIER TO ENTRYNew entrants increase the capacity in an industry and the inflow of funds. The question that arises is how easy is it to enter an industry ?There are some barriers to entry:a) Economies of scaleb) Product differentiationc) Capital requirementd) Government policy

2. THE THREAT OF SUBSTITUTIONNew inventions are always taking place and new and better products replace existing ones. An industry that can be replaced by substitutes or is threatened by substitutes is normally an industry one must be careful of investing in. An industry where this occurs constantly is the packaging industry -bottles replaced by cans, cans replaced by plastic bottles, and the like. To ward off the threat of substitution, companies often have to spend large sums of money in advertising and promotion.

3. BARGAINING POWER OF THE BUYERSIn an industry where buyers have control, i.e. in a buyer's market, buyers are constantly forcing prices down, demanding better services or higher quality and this often erodes profitability.4. BARGAINING POWER FOR THE SUPPLIERSAn industry unduly controlled by its suppliers is also under threat.5. RIVALRY AMONG COMPETITORSRivalry among competitors can cause an industry great harm. This occurs mainly by price cuts, heavy advertising, additional high cost services or offers, and the like.III. COMPANY ANALYSIS:At the final stage of fundamental analysis, the investor analyzes the company. This analysis has two thrusts:How has the company performed vis--vis other similar companies andHow has the company performed in comparison to earlier yearsIt is imperative that one completes the politico economic analysis and the industry analysis before a company is analyzed because the company's performance at a period of time is to an extent a reflection of the economy, the political situation and the industry. What does one look at when analyzing a company?The different issues regarding a company that should be examined are:The ManagementThe CompanyThe Annual ReportRatios

THE MANAGEMENT:The single most important factor one should consider when investing in a company and one often never considered is its management.In India management can be broadlydivided in two types:Family ManagementProfessional Manageme

RESEARCH METHODOLOGY & DESIGN

TYPE OF STUDY

The research has been based on primary as well as secondary data analysis. The study has been exploratory as it aims at examining the secondary data for analyzing the previous researches that have been done in the area of technical and fundamental analysis of stocks. The knowledge thus gained from this preliminary study forms the basis for the further detailed Descriptive research. In the exploratory study, the various technical indicators that are important for analyzing stock were actually identified and important ones short listed.

SAMPLE DESIGN

The sample of the stocks for the purpose of collecting secondary data has been selected on the basis of Random Sampling. The stocks are chosen in an unbiased manner and each stock is chosen independent of the other stocks chosen. The stocks are chosen from the Different Sector.

SAMPLE SIZE

The sample size for the number of stocks is taken as 3 in each sector for technical analysis and fundamental analysis of stocks as fundamental analysis is very exhaustive and requires detailed study.

Sector analysisBanking sector

STATE BANK OF INDIAState Bank of India (SBI) (NSE: SBIN, BSE: 500112, LSE: SBID) is the largest banking and financial services company in India by revenue, assets and market capitalisation. It is a state-owned corporation with its headquarters in Mumbai, Maharashtra. As of March 2012, it had assets of US$360 billion with over 13,577 outlets including 157 overseas branches and agents globally. The bank traces its ancestry to British India, through the Imperial Bank of India, to the founding in 1806 of the Bank of Calcutta, making it the oldest commercial bank in the Indian Subcontinent. Bank of Madras merged into the other two presidency banksBank of Calcutta and Bank of Bombayto form the Imperial Bank of India, which in turn became the State Bank of India. The Government of India nationalised the Imperial Bank of India in 1955, with the Reserve Bank of India taking a 60% stake, and renamed it the State Bank of India. In 2008, the government took over the stake held by the Reserve Bank of India. SBI has been ranked 285th in the Fortune Global 500 rankings of the world's biggest corporations for the year 2012.SBI provides a range of banking products through its vast network of branches in India and overseas, including products aimed at non-resident Indians (NRIs). The State Bank Group, with over 18,324 branches, has the largest banking branch network in India. SBI has 14 local head offices situated at Chandigarh, Delhi, Lucknow, Patna, Kolkata, Guwahati (North East Circle), Bhuwaneshwar, Hyderabad, Chennai, Trivandram, Banglore, Mumbai, Bhopal & Ahmedabad and 57 Zonal Offices that are located at important cities throughout the country. It also has 157 branches overseas.SBI is a regional banking behemoth and is one of the largest financial institutions in the world. It has a market share among Indian commercial banks of about 20% in deposits and loans. The State Bank of India is the 29th most reputed company in the world according to Forbes Also, SBI is the only bank featured in the coveted "top 10 brands of India" list in an annual survey conducted by Brand Finance and The Economic Times in 2010

State Bank of India

TypePublic

IndustryBanking, Financial services

Founded1 July 1955

HeadquartersMumbai, Maharashtra, India

Key peoplePratip Chaudhuri

ProductsCredit cards, Consumer banking, corporate banking, finance and insurance, investment banking, mortgage loans, private banking, wealth management

RevenueUS$ 36.950 billion (2012)

ProfitUS$ 03.202 billion (2012)

Total assetsUS$ 359.237 billion (2012)

Total equityUS$ 20.854 billion (2012)

Owner(s)Government of India

Employees292,215 (2012)

Share Holding Pattern in (%)

Sep' 11Jun' 11Mar' 11Dec' 10

Promoter59.4059.4059.4059.40

FII8.6510.8812.8013.36

DII18.5417.4516.5715.59

Others13.4112.2711.2311.65

Total100.00100.00100.00100.00

Income Statement

(Mar '12)Quarterly(Mar '12)Yearly

Net Sales28695.50106521.45

Other Income5264.0414351.45

PBDIT23448.1394803.91

Net Profit4050.2711707.29

Balance Sheet(Mar '12)(In Rs Cr)

Total Share Capital671.04

Net Worth83951.20

Total Debt1170652.93

Net Block5133.87

Investments312197.61

Net Current Assets805918.48

Total Assets1335519.24

52 Week High2529.7052 Week Low1571.10

Returns

BANKS1 Month3 Month6 Month1 Year3 Year5 Year

1) SBI-3.85 %-8.37 %16.60 %-10.54 %9.97 %51.99 %

SBI Comprising The Nifty & Sensex

1 Month3 Month6 Month1 Year3 Year5 Year

SBI-3.85 %-8.37 %16.60 %-10.54 %9.97 %51.99 %

SENSEX-5.8125 %-8.1144 %1.1702 %-11.841 %11.5341 %11.9513 %

NIFTY-5.6667 %-8.0674 %2.4565 %-10.960 %11.2790 %16.022 %

INTERPRETATION

The table shows that the SBI stock have provided a better returns to the investors as it has shown a growth of around 51.99% in 5 years. It shows a very volatile trend, in first month SBI stock shown a negative trend and it continues to the same till 1 year and then becomes positive in the 5 th year. This states that it is a long term investment call or long term investment stock. ICICI BANK

ICICI Bank Limited (NSE: ICICIBANK, BSE: 532174, NYSE: IBN) is an Indian diversified financial services company headquartered in Mumbai, Maharashtra. It is the second largest bank in India by assets and third largest by market capitalization. It offers a wide range of banking products and financial services to corporate and retail customers through a variety of delivery channels and through its specialized subsidiaries in the areas of investment banking, life and non-life insurance, venture capital and asset management. The Bank has a network of 2,630 branches and 8,003 ATM's in India, and has a presence in 19 countries, including IndiaThe bank has subsidiaries in the United Kingdom, Russia, and Canada; branches in United States, Singapore, Bahrain, Hong Kong, Sri Lanka, Qatar and Dubai International Finance Centre; and representative offices in United Arab Emirates, China, South Africa, Bangladesh, Thailand, Malaysia and Indonesia. The company's UK subsidiary has established branches in Belgium and GermanyICICI Bank was established in 1996 by the Industrial Credit and Investment Corporation of India, an Indian financial institution, as a wholly owned subsidiary. The parent company was formed in 1955 as a joint-venture of the World Bank, India's public-sector banks and public-sector insurance companies to provide project financing to Indian industry The bank was initially known as the Industrial Credit and Investment Corporation of India Bank, before it changed its name to the abbreviated ICICI Bank. The parent company was later merged into ICICI Bank

TypePublic

Traded asBSE: 532174NSE: ICICIBANK


Founded1955


Key peopleK. V. Kamath(Chairman)Chanda Kochhar(MD & CEO)

ProductsCredit cards, Consumer banking, corporate banking, finance and insurance, investment banking, mortgage loans, private banking, wealth management





Employees79,978 (2011)

Websitewww.icicibank.com



Promoter0.000.000.000.00

FII38.1738.6138.6239.23

DII25.2425.1424.1923.43

Others36.5936.2537.1937.34

Total100.00100.00100.00100.00

Income Statement

(Mar '12)Quarterly(Mar '12)Yearly

Net Sales9174.6433542.65


PBDIT8712.1631611.93

Net Profit1901.766465.26



Net Worth60402.86

Total Debt395664.87

Net Block4614.69

Investments159560.04



52 Week High1111.8052Week Low641.00

Returns


ICICI BANK-11.02 %-13.48 %9.82 %-27.78 %5.88 %-14.64 %

ICICI BANK Comprising with Nifty & Sensex


ICICI BANK-11.02 %-13.48 %9.82 %-27.78 %5.88 %-14.64 %

SENSEX-5.8125 %-8.1144 %1.1702 %-11.841 %11.5341 %11.9513 %

NIFTY-5.6667 %-8.0674 %2.4565 %-10.960 %11.2790 %16.022 %

INTERPRETATION

The indices have shown volatile trend in past as shown in the table. Sensex and Nifty both were negative till the 3 month and then becomes positive in 6 month which again shows am positive trend till the 5th year. This states that the stock currently is performing well and will provide good returns to investors.

HDFC BANK

HDFC Bank Limited (BSE: 500180, NSE: HDFCBANK, NYSE: HDB) is an Indian financial services company that was incorporated in August 1994. HDFC Bank is the fifth or sixth largest bank in India by assets and the second largest bank by market capitalization as of February 24, 2012. The bank was promoted by the Housing Development Finance Corporation, a premier housing finance company (set up in 1977) of India. HDFC Bank has 1,986 branches and over 5,471 ATMs, in 996 cities in India, and all branches of the bank are linked on an online real-time basis. As of 30 September 2008 the bank had total assets of Rs.1006.82 billion.[3] For the fiscal year 2010-11, the bank has reported net profit of 3,926.30 crore (US$710.66 million), up 33.1% from the previous fiscal. Total annual earnings of the bank increased by 20.37% reaching at 24,263.4 crore (US$4.39 billion) in 2010-11.[4] HDFC Bank is one of the Big Four banks of India, along with: State Bank of India, ICICI Bank and Punjab National Bank.HDFC Bank was incorporated in 1994 by Housing Development Finance Corporation Limited (HDFC), India's largest housing finance company. It was among the first companies to receive an 'in principle' approval from the Reserve Bank of India (RBI) to set up a bank in the private sector. The Bank started operations as a scheduled commercial bank in January 1995 under the RBI's liberalisation policies.Times Bank Limited (owned by Bennett, Coleman & Co. / Times Group) was merged with HDFC Bank Ltd., in 2000. This was the first merger of two private banks in India. Shareholders of Times Bank received 1 share of HDFC Bank for every 5.75 shares of Times Bank.In 2008 HDFC Bank acquired Centurion Bank of Punjab taking its total branches to more than 1,000. The amalgamated bank emerged with a base of about Rs. 1,22,000 crore and net advances of about Rs.89,000 crore. The balance sheet size of the combined entity is more than Rs. 1,63,000 crore

TypePublic

Traded asBSE: 500180NSE: HDFCBANKNYSE: HDBBSE SENSEX Constituent


FoundedAugust 1994


Key peopleAditya Puri (MD)

ProductsCredit cards, consumer banking, corporate banking, finance and insurance, investment banking, mortgage loans, private banking, private equity, wealth management


ProfitUS$ 0923.8 million (2011)


Total equityUS$ 07.769 million (2011)

Employees55,752 (2011)

WebsiteHDFCBank.com



Promoter23.2323.2823.3523.40

FII29.3029.2328.5329.37

DII10.9711.1411.6110.86

Others36.5036.3536.5136.37

Total100.00100.00100.00100.00

Income Statement

(Jun '12)Quarterly(Mar '12)Yearly

Net Sales8007.4227286.35


PBDIT6617.0022502.73

Net Profit1417.395167.07



Net Worth29924.38

Total Debt270552.96

Net Block2347.19

Investments97482.91




Returns


HDFC BANK-2.81%3.379%2.018%-4.29%17.33%75.66%

HDFC BANK Comprising with Nifty & Sensex


HDFC BANK-2.81%3.379%2.018%-4.29%17.33%75.66%

SENSEX-5.815 %-8.1144 %1.1702 %-11.841 %11.5341 %11.9513 %

NIFTY-5.666 %-8.0674 %2.4565 %-10.960 %11.2790 %16.022 %

INTERPRETATION

The above data shows the volatility in HDFC equity stock. In the year 2008 - 2009 It has fallen and shown negative trend but after that it shows a upward moving curve which states that the stock is performing well and has provided satisfactory returns to the investors. The growth up to 75.66008% have been recorded in the current year as compared to the year 2007

Comprising chart of returns of SBI , ICICI & HDFC Bank (%)

INTERPRETATION

According to graph, the ICICI bank equity has fallen more as compared to the SBI and HDFC and continues to show a negative trend till the current year. The SBI equity stock is highly volatile as compared to the other two. As compared to year 2007 the SBI stock grown up to 137.84% in 2010 2011 but currently is fallen down to 67.71%. The HDFC equity has shown a positive upward moving trend consistently after 2009 till the current year which states that stock is less volatile.

Banking Index

52 week High11451.2152 week Low7766.67

Returns from Banking Sector1 Month3 Month6 Month1 Year3 Year5 Year

-8.1328-9.35%10.23%-14.33%27.30%47.40%

Returns from sensex1 Month3 Month6 Month1 Year3 Year5 Year

-5.81252-8.11%1.17%-11.84%11.53%11.95%

Returns from Nifty1 Month3 Month6 Month1 Year3 Year5 Year

-5.66676-8.06%2.45%-10.96%11.24%16.02%

INTERPRETATION

In the long the banking sector have provided the returns on investment was around 47.4050 which is nearer to 50%. This states that the fund invested in banking sector will grow up to time i.e. 50% in the long run. Further Sensex and nifty both have provided better returns as compared to the other sectors. As stock banking sector are volatile one must invest for longer period of time. Investor must not get afraid with the volatile trend. As per records the Banking Sector will provide a better returns in longer duration of investment

IT SECTOR

INFOSYS

Infosys Limited formerly Infosys Technologies Limited (BSE: 500209, NSE: INFY, NASDAQ: INFY) is an Indian provider of business consulting, technology, engineering and outsourcing services. Its headquartered in Bangalore, India. It has offices in 30 countries and development centers in India, US, China, Australia, UK, Canada, Japan and many other countriesInfosys was co-founded in 1981 by N. R. Narayana Murthy, Nandan Nilekani, N. S. Raghavan, S. Gopalakrishnan, S. D. Shibulal, K Dinesh and Ashok Arora after they resigned from Patni Computer Systems. Today, Infosys is a global leader in the "next generation" of IT and consulting with revenues of billion (FY12). Infosys ranked among the most innovative companies in a Forbes survey, leading technology companies in a report by The Boston Consulting Group and top ten green companies in Newsweek's Green RankingsInfosys was voted India's most admired company in The Wall Street Journal Asia 200 every year since 2000. The corporate governance practices were recognized by The Asset Platinum award and the IR Global Rankings.Infosys was also ranked as the 15th most trusted brand in India by The Brand Trust Report In 1996, Infosys established the Infosys Foundation, operating in the areas of health care, social rehabilitation and rural uplift, education, arts and culture. Since then, this foundation has spread its activities from its headquarters in Karnataka to the Indian states of Tamil Nadu, Andhra Pradesh, Maharashtra, Kerala, Orissa and Punjab in a phased manner.A dedicated team at the Foundation identifies programs in the areas of Healthcare, Education, Culture, Destitute Care and Rural Development

TypePublic

IndustryIT services, IT consulting

Founder(s)N. R. Narayana MurthyNandan NilekaniN. S. RaghavanS. GopalakrishnanS. D. Shibulal

ServicesIT, business consulting and outsourcing services


Operating incomeUS$ 2.01 billion (2012)




Employees151,151 (2012)

DivisionsInfosys BPO, Infosys China

Websitewww.infosys.com



Promoter16.0416.0416.0416.04

FII36.6636.8836.1236.60

DII10.719.849.008.43

Others36.5937.2438.8438.93

Total100.00100.00100.00100.00

Income Statement(In Rs Cr)


Net Sales8909.0031254.00


PBDIT3261.0011890.00

Net Profit2204.008470.00



Net Worth29757.00

Total Debt0.00

Net Block4061.00

Investments1409.00


Total Assets


Returns

IT1 Month3 Month6 Month1 Year3 Year5 Year

INFOSYS-0.932%-15.14%-6.43%-12.06%52.30%27.05%

INFOSYS Comprising with Nifty & Sensex


INFOSYS-O.932%-15.14%-6.43%-12.06%52.30%27.05%

SENSEX-5.815 %-8.1144 %1.1702 %-11.841 %11.5341 %11.9513 %

NIFTY-5.666 %-8.0674 %2.4565 %-10.960 %11.2790 %16.022 %

INTERPRETATION

The Infosys stock has not shown a consistent growth. In the 3rd year it moved up to 52.30% but has fallen down and remained on 27.05% of growth in the current year which states that the it is not performing well currently as compared to the past years.

Tata Consultancy Services Limited

Tata Consultancy Services Limited (TCS) (BSE: 532540, NSE: TCS) is an Indian provider of information technology (IT) services, business solutions and outsourcing services. It is a subsidiary of Tata Group conglomerate headquartered at Mumbai, Maharashtra, India. TCS is one of India's most valuable companiesOn August 9, 2004 TCS became a publicly listed company.In 2005 TCS ventured into a new area for an Indian IT services companyBioinformatics.[12]In 2006 TCS designed the ERP for IRCTC.In 2008 TCS went through an internal restructuring exercise that executives claim would bring about agility to the organization. TCS entered the Small and medium enterprises (SME) market for the first time in 2011, with cloud-based offerings. In the 2011 fiscal year TCS achieved U$10 billion in annual revenues for the first time. Tata Consultancy Services signed a Rs 94-crore deal with the Karnataka government for six-year period to automate its treasury and finance department operations. Deutsche Bank has selected TCS as a strategic partner for their Production Management Transformation Initiative, within their Capital Markets Business Unit. TCS has got contract from Credit Union Australia. TCS has received a multi-year, multi-million dollar contract to provide application support, maintenance and development services to the gases company Air Liquide.[20] A book titled The TCS Story... and Beyond published by the Penguin Group,was authored by S Ramadorai, now TCSs Vice-chairman and launched in September 2011.The book covers the 43 years journey of TCS. On the Last Trading Day of Year 2011, TCS overtook RIL to be anointed as the country's most valued firm. On February 6, 2012, TCS signed a multi-year, multi-million euro contract with European car rental company Europcar for the deployment of IT services in France

TypePublic


Founded1968

Founder(s)JRD Tata


Key peopleRatan Tata(Chairman)N. Chandrasekaran(CEO & MD)




Employees243,545 (2012)

ParentTata Group

Websitewww.tcs.com


Dec' 11Sep' 11Jun' 11Mar' 11

Promoter74.0874.0874.0874.05

FII13.4112.8112.8012.64

DII7.678.108.108.11

Others4.845.015.025.20

Total100.00100.00100.00100.00

Income Statement


Net Sales11410.6538858.54


PBDIT3621.1114070.90

Net Profit2797.5910975.98



Net Worth24856.63

Total Debt96.23

Net Block4063.62

Investments5688.39




Returns


TCS1.001 %0.261%11.63%7.636%58.37%105.84%

TCS Comprising with Nifty & Sensex


TCS1.001 %0.261%11.63%7.636%58.37%105.84%

SENSEX-5.8125 %-8.1144 %1.1702 %-11.841 %11.5341 %11.9513 %

NIFTY-5.666 %-8.0674 %2.4565 %-10.960 %11.2790 %16.022 %

INTERPRETATION

In the Long run the TCS equity stock has provided wonderful returns of 105.84 %. But the graph shows the volatility with steep fall in the year 2009- 2010. Though it has recovered after that moved up but currently it is not so consistent.

WIPROWipro Limited (formerly Western India Products Limited) (NASDAQ: WIT, NYSE: WIT, BSE: 507685) is an Indian multinational provider of Information technology (IT) services, consulting and outsourcing services. It is headquartered in Bangalore, India. As of 2012, the company has over 130,000 employees and a worldwide presence with global centers across 54 countriesThe company operates in four segments: IT products and services, Consumer care and lighting, Healthcare and Infrastructure engineeringIn February 2001, Wipro became the first software technology and services company in India to be certified for ISO 14001 certification. [16]Wipro also achieved ISO 9000 certification to become the first software company to get SEI CMM Level 5 in 2002. Wipro Consumer Care and Lighting Group entered the market of Compact Fluorescent Lamps, with the launch of a range of CFL, under the brand name of Wipro Smartlite. As the company grew, a study revealed that Wipro was the fastest wealth creator for 5 years (1997-2002). The same year witnessed the launch of Wipros own laptops with Intel's Centrino mobile processor. Wipro also entered into an exclusive agreement with the owners of Chandrika for marketing of their soap in select states in India. It set up a wholly owned subsidiary company viz. Wipro Consumer Care Limited to manufacture consumer care and lighting products. [25]In 2004, Wipro joined the billion dollar club. It also partnered with Intel for i-shiksha. The year 2006 saw Wipro acquire cMango Inc., a US based Technology Infrastructure Consulting firm Enabler, and a Europe based retail solutions provider.[31] In 2007, Wipro inked a large deal with Lockheed Martin. It also entered into a definitive agreement to acquire Oki Techno Centre Singapore Pte Ltd (OTCS) and signed an R&D partnership contract with Nokia Siemens Networks in Germany. The year 2008 saw Wipros foray into the clean energy business with Wipro Eco Energy. In April 2011, Wipro signed an agreement with Science Applications International Corporation (SAIC) for the acquisition of their global oil and gas information technology practice of the commercial business services business unit. The year 2012 saw Wipro make its 17th acquisition in IT business when it acquired Australian analytics product firm Promax Applications Group (PAG) for $35 million

TypePublic limited company


Founder(s)M.H. Hasham Premji

HeadquartersBangalore, India


RevenueUS$ 7.30 billion (2012)[1]

Operating incomeUS$ 1.25 billion (2012)

Total assetsUS$ 8.55 billion (2012)[1]

Total equityUS$ 5.60 billion (2012)[1]

Employees135,920 (2012)

DivisionsWipro Consumer Care & LightingWipro Infrastructure EngineeringWipro GE Medical Systems LimitedWipro Technology Services Limited


Sep' 11Jun' 11Sep' 10

Promoter79.1779.2379.36

FII5.085.375.28

DII4.153.743.52

Others11.6011.6611.84

Total100.00100.00100.00

Income Statement(In Rs Cr)


Net Sales8932.6032053.60

Other Income-5.10856.70

PBDIT1838.107270.40

Net Profit1158.004685.10



Net Worth24352.50

Total Debt5243.20

Net Block4649.80

Investments10335.20




Returns


WIPRO3.395%0.257%-3.63%29.92%-8.06%-21.81%

WIPRO Comprising with Nifty & Sensex


WIPRO3.395%0.257%-3.63%29.92%-8.06%-21.81%

SENSEX-5.8125 %-8.1144 %1.1702 %-11.841 %11.5341 %11.9513 %

NIFTY-5.666 %-8.0674 %2.4565 %-10.960 %11.2790 %16.022 %

INTERPRETATION

As compared to the year 2007 the Wipro equity have fallen to negative side and has not shown any satisfactory results in terms of growth. It has fallen down to -21.8166% which provided the negative returns to the investors. In the year 2009-10 it has moved up to certain extent on positive side. But again have shown a downward fall.

Comprising chart of returns of Infosys , Tcs & Wipro (%)

INTERPRETATIONIn the year 2009-2010 the stocks of all three companies have fallen down to the extent of -61.26% due to global recession and then recovered to the positive side as value of USD appreciated. As compared to the other two TCS has outperformed and has touched the level of 122.85 % of growth in the current year, as compared to year 2007.

IT Index

52 week High6362.4152 week Low4638.80

Returns of IT Sector


-8.30 %-6.3510%-9.80 %-13.3351%37.30%42.40%

Returns from sensex


-5.812%-8.114%1.1702%-11.84%11.53%11.955%

Returns from Nifty


-5.66676%-8.06748%2.4565%-10.96%11.27%16.02%

INTERPRETATION

The Indices shown that, in the Long run the IT sector provided a return of 42% on investment in 5 years. Which is lesser than the banking sector? Further the stock are volatile but not shown a higher growth rate than the Banking. Which means the sector provides a returns but not as greater as the banking sector

Questionnaire

Que.1. Do you investing in Equity Market? [ ]Yes [ ] No

INTERPRETATION

As per the survey all 30 observations have invested in the equity market and banking and IT sector.

Que.2. Which factors motivate you for investing in Equity Market?

[ ] Return [ ] Liquidity [ ] Safety [ ] Capital Appreciation [ ] Other _____________

INTERPRETATION

From the total observation 75% do invest in the equity market because of Returns factor. Which means the Return on Investment factor motivates the maximum investors. 10% of the investors says that they invest for liquidity. 10% of the investors do invest in equity for capital appreciation and 5% of the investors invest in the market because of the factors other than listed above.

Que.3. What is the rate of return expected by you from Equity Market in a year?

[ ] 5% 10 %[ ] 10% 15 % [ ] 15% 20%[ ] 20% 25%[ ] 25% 30%[ ] 30% and above

INTERPRETATION

60% of the investors expect 20% - 25% returns from the equity market on their investments. 20% of the investors as per the survey expects 25% - 30% returns on their investments. 10% of the investors expects a ,lower return of 15-20% and 10% of the investors expect a higher return of 30% and above on their invested fund.

Que.4. Are you satisfied with the current performance of the Equity Market in terms of expected return?

[ ] Fully Satisfied [ ] Satisfied[ ] Neutral[ ] Unsatisfied [ ] Fully Unsatisfied

INTERPRETATION

As per the survey 50% of the investors are satisfied with performance of the share market. 10% of the investors from the total observation are very bullish about the market that means they are fully satisfied with the performance of the market and the returns they got on their investment. 20% of the investors are neutral about the market that means they are neither bullish nor bearish about the market.20% of the total observations are unsatisfied with performance of the market and no one from the observation is fully unsatisfied with market.

Que.5. Which Sectors do you prefer the most?

(Here, I have decided to study only these TWO sectors.)

INTERPRETATION

As per the survey 60% of the investors prefer to invest in banking sector in the equity market which states that banking sector attracts the investors to invest in the companies of the sector as compare to the IT sector . Only 40% of the total observation prefer to invest in IT sector.

Que.6. In which company, in your preferred sector, you invest your funds?

Banking Sector IT sector

HDFC [ ] TCS [ ] SBI [ ] Infosys [ ]ICICI [ ] Wipro [ ] Others [ ] Others [ ]

INTERPRETATION

Out of the 40% of the observation whom preferred IT sector for investment in Q.5 , 50% of them Prefer to invest in TCS, 25% of them invest in Infosys, 10% prefer to invest in Wipro and 15% prefer to invest in other stocks of the IT sector . Out of the 60% of the people who preferred banking sector in Q.5,of this survey, 50% of them prefer to invest in equity stock 0f SBI in banking sector, 25% of them prefer to0 invest in HDFC, 15% prefer to invest in ICICI and 10% prefer to invest in other stock of different companies in the banking sectors.

Que.7. How much returns you got from your preferred Sector in long run?

[ ] 5% 10 %[ ] 10% 15 % [ ] 15% 20%[ ] 20% 25%[ ] 25% 30%[ ] 30% and above

INTERPRETATION

As per the survey people who invested in banking sector. 50% of them have got 25%-30% returns on their investment in the long run, 10% of them have got 15% - 20%,10% of them got 20%-25% on their investment and 30% have earned a return of 30% and above.People who preferred and invested in IT sector, 40% of them have got 25%-30% return on their investment in the long run and 10% of them have got 30% and above .25% of them have earned a return of 154-20% & other 25% investors earned around 20-25% of return.Que.8. Which Factors do you consider most important while selecting the Sectors?

[ ] Market Trend [ ] Profitability [ ] Economic Condition [ ] Industry Condition [ ] Government Policy [ ] If any other please specify ________

INTERPRETATION

40% of the investors says they consider market trend , economic & company condition while selecting a sector.30% says they consider profitability & industry condition to choose a particular sector for investment. And 30% of the total observation says that they consider government policy, economic condition, profitability while selecting a sector for investment.

Que.9. Are you satisfied with the returns provided by your preferred sector?

YES [ ] NO [ ]

INTERPRETATION

80% of the investor as per the survey are satisfied with the returns they earned from the sector they invested in. 20% of them are not satisfied with their returns given by the sector they invested in.

Que.10. What according to you are the reasons for the performance of your preferred sector?Comment.________________________________________________________________________________________________________________________________________________________________________________________________________________________

INTERPRETATION

Majority of the people says that the timely return whether in terms of returns or the services provided by the sector to the stakeholder is the most important reason for the performance of their preferred sector

HYPOTHESIS

Ho = Null Hypothesis Ha = Hypothesis

Ho :- Banking sector does not provide better returns on investment than IT sector.

Ha. :- Banking sector provides better returns on investment than the IT sector.

As per the secondary data and the past records of market trends, a compared to the IT sector, banking sector have provided better returns to the investors. Equity Stock indices of the Banking Sector is much volatile than the than IT sector. Further the Primary data of survey shows that 60% of the total investors surveyed prefer to invest in the banking sector for better returns over the IT sector.

Thus Hypothesis can be proved as Banking Sector provides better returns on investment than the IT sector

Findings & Conclusion

Findings

In this research , comparison between banking and IT sector , both the sectors given the good returns in long term but in short term banking sector given good returns From the above chart , banking given 28.19% returns on investment & 29.3% on SIP . IT sector given 18.04% returns on investment & 13.3% on SIP. From the chart & returns , it clearly seen that banking sector is performing better than IT sector. Banks was the clear out performer among all giving a 12x return in just 5 yrs . Thats very good return . Energy sector came second and FMCG and IT sector gave the least returns out of all . Bank has given 3x return after the crash of 2008-09 . Look at the big spike upwards . Till the crash Energy sector was performing same to same as Banks , but after the crash, performance of Energy sector deteriorated and it didnt match up with Bank IT sector performed very badly after the crash , but in the recent bull run , it has performed very well and gave superior upside

Conclusion

Current scenario suggests, markets are on a bullish run, especially in case of Banking Industry. Analysis suggests that all the chosen stocks ie ICICI Bank, HDFC Bank and SBI are going to perform well, with huge potential of earnings for equity holders. Both Banking & IT sectors given the good returns in long term but in short term banking sector given good returns then IT sector As per the secondary data and the past records of market trends, a compared to the IT sector, banking sector have provided better returns to the investors. Equity Stock indices of the Banking Sector is much volatile than the than IT sector. Further the Primary data of survey shows that 60% of the total investors surveyed prefer to invest in the banking sector for better returns over the IT sector. It is recommended to increase the investment in Banks.

BIBLIOGRAPHY

Books

C.R.Kothari,Research Methodology, Methods & Techniques, 2nd edition, 2004, New Age International Publication. India's Financial Markets: An Insider's Guide to How the Markets WorkBy Ajay Shah, Susan Thomas, Michael Gorham Banking and financial markets in India, 1947 to 2007, New Century Publications ,01-Jul-2007

Newspaper, journal, periodical

The Hindu Business Line Sunday,- Banking sector in india

Websites Referred

www.moneycontrol.com www.myiris.com www.indiaearnings.moneycontrol.com http://finance.yahoo.com www.wikipedia.org www.reuters.com www.kotaklifeinsurance.com www.hdfcbank.com www.investopedia.com

company reports

Annual report of SBI, ICICI, HDFC BANK 2010-11

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