Stock exchange is an association, organization or body of individuals, whether incorporated or not, established for the purpose of assisting and controlling the business of buying, selling and dealing in securities.
Without an efficient stock exchange, the saving of the community, which are essential for economic progress would not be able for the business community. It provides for a mechanism in buying and selling the securities. It assists in reasonably correct evaluation of securities in terms of the real worth. In evaluating the prices on the exchange, the operators take into account all the relevant factors, present and prospective, concerning the particular enterprise and industry. It is because of this the price of one company's share is different than the other company's share price. This price difference can be attributed to the difference between the profitability and the future prospects of the two companies.
Stock exchanges constitute a market for trading in the listed securities and they also facilitate listing of new securities for trading. They also provide a reasonable degree of safety and fair dealing to the investors.
The stock markets are affected by practically anything, especially in India. Mr. Armstrong an authority of market says, "The wind that play upon stock exchanges are as varying and inconsistent as those that blow upon the ocean are. They are frequently just as disturbing". Basically two sets of factors affect the stock exchanges, one is known as fundamental factor and other is technical factor. The fundamental factor are related to the industry and are economic and financial in nature. The technical factor are related to techniques of stock evaluation methods.
The governing body of a recognised stock exchange has wide powers and is the decision making body of the exchange. It has the power, subject to government approval, to make, amend and suspend the operation of the rules, bylaws and regulations of the exchanges. It also has complete jurisdiction over all members and in practice, its power of management and control is almost absolute. The governing body has the power has the power to admit and expel members, to warn, censure, fine and suspend members,
