The functioning of stock exchanges in India started in 1875. BSE is the oldest stock market in India. The history of Indian stock trading starts with 318 persons taking association in Native Share and Stock Brokers Association, which we now know by the name Bombay Stock Exchange or BSE in short. In 1965, BSE got permanent gratitude from the Government of India. National Stock Exchange approach second to BSE in terms of status. BSE and NSE represent themselves as synonyms of Indian stock market. The history of Indian stock market is almost the same as the history of BSE.

The 30 stock responsive index or Sensex was first compiled in 1986. The Sensex is compiled based on the presentation of the stocks of 30 financially sound benchmark companies. In 1990 the BSE crossed the 1000 mark for the first time. It crossed 2000, 3000 and 4000 figures in 1992. The reason for such huge surge in the stock market was the liberal financial policies declared by the then monetary minister Dr. Man Mohan Singh.

The up-beat mood of the market was unexpectedly lost with Harshad Mehta scam. It came to public knowledge that Mr. Mehta, also known as the big-bull of Indian stock market unfocused huge funds from banks through deceitful means. He played with 270 million shares of about 90 companies. Millions of small-scale saver became victims to the fraud as the Sensex fell flat shedding 570 points.

To avoid such frauds, the Government formed The Securities and Exchange Board of India, through an Act in 1992. SEBI is the constitutional body that controls and regulates the functioning of stock exchanges, brokers, sub-brokers, portfolio manager’s investment advisors etc. SEBI oblige several rigid measures to protect the attention of investors. Now with the inception of online trading and daily settlements the chances for a fraud is nil, says top officials of SEBI.

Sensex crossed the 5000 mark in 1999 and the 6000 mark in 2000. The 7000 mark was crossed in June and the 8000 mark on September 8 in 2005. Many foreign institutional investors (FII) are investing in Indian stock markets on a very large scale. The broadminded economic policies pursued by successive Governments attracted foreign institutional investors to a large scale. authority now believe the sensex can soar past 14000 mark before 2010.

The random behavior of the market gave it a tag – ‘a volatile market.’ The factors that exaggerated the market in the past were good monsoon, Bharatiya Janatha Party’s rise to power etc. The result of a cricket match between India and Pakistan also exaggerated the movements in Indian stock market. The National Democratic Alliance led by BJP, during 2004 public elections ineffectively tried to ride on the market sentiments to power. NDA was voted out of power and the sensex recorded the biggest fall in a day amidst fears that the Congress-Communist alliance would stall economic reforms. Later prime minister Man Mohan Singh’s assurance of ‘reforms with a human face’ cast off the doubts and market reacted sharply to touch the highest ever mark of 8500.

India, after United States hosts the largest number of listed companies. Global investors now passionately seek India as their favored location for investment. Once viewed with skepticism, stock market now petition to middle class Indians also. Many Indians working in foreign countries now divert their savings to stocks. This recent occurrence is the result of opening up of online trading and diminished interest rates from banks. The stockbrokers based in India are breach offices in different countries mostly to cater the needs of Non Resident Indians. The time factor also works for the NRIs. They can buy or sell stock online following returning from their work places.

The fresh incidents that led to growing interest among Indian center class are the first public offers make known by Tata Consultancy Services, Maruti Udyog Limited, ONGC and big names like that. Good monsoons always raise the market sentiments. A good monsoon means improved agricultural produce and more expenditure capacity among rural folk.

The optimistic run of the stock market can be connected with a steady growth of around 6% in GDP, the growth of Indian companies to MNCs, large possible of growth in the fields of telecommunication, mass media, education, tourism and IT sectors backed by economic reforms ensure that Indian stock market carry on its bull run.

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