Trade setup for Indian equity markets for April

Equity markets trade

How do equity markets trade?

Traditionally, equity markets trade through securities or stocks. Stocks are an ownership stake in a company and they can also be traded instead of being purchased outright. Securities are rights to ownership of shares or bonds in a company. They can be traded by people buying and selling them on an open securities exchange. That is where buyers and sellers decide what price they want to buy or sell them at. Each security comes with a certain number of shares that the holder is entitled to. This is determined at the time of the creation for companies issuing new securities through initial public offerings (IPOs).

An equity market is when most types of financial assets including stocks, bonds, futures contracts, currencies etc are traded inter-actively. This is an important concept in economics, finance and trading.

The selling pressure continued in equity markets for yet another session

The selling pressure continued in equity markets for yet another session with the Sensex index falling 3572.73 points or 1.9 per cent to end Monday’s trade at 36,844.82 points (up by 0.82 per cent).

Meanwhile, the broader Nifty50 index was trading 0.68 per cent lower at 10,093.20 points. The fall in equities comes on the back of incessant run-up seen in indices as well as strong overseas cues that have stifled emerging market sentiment. This had rallied strongly earlier this year.

Recent Market trades on stock Market

Banking stocks were among the worst-hit today with Axis Bank falling 2.95 per cent and HDFC Bank 2.36 per cent. While ITC, Yes Bank and Kotak Bank were among the top gainers in the index. Though the market has fallen, experts including Rajeev Thakkar, Managing Director, KIFS Trade Capital said, “The selling has been selective. Banking stocks have emerged as the worst performers while IT counters like HCL Tech, TCS and Infosys have given very good returns despite being part of the index.”

Meanwhile, on the global front, US stock markets ended sharply lower on Monday with investors worried that a potential trade war could hurt global growth. The Dow Jones industrial average lost 4.6 per cent to 24,346.96 points while the S&P 500 fell 4.1 per cent to 2,728.94 points. Equity markets are expected to open with a positive bias after strong buying momentum in the last couple of sessions.

What benefits Does Equity Market trade provide?

A company that has issued equity shares is called an “issuer” and the holder of equity shares is called the “shareholder”. The shareholders have a certain number of equities from which they can buy or sell at any time. These equities are known as “shares”, which can be traded on an exchange or through over-the-counter (OTC) markets.

Equity markets are very popular investment avenues as they offer quick returns and good liquidity. In simple words, traders and investors can sell or buy them right away without having to wait for a long period to complete their transactions. Furthermore, they can enjoy the benefits derived from them.

Are there any risks involved in the Equity market?

It should be noted that investing in equities comes with certain risks as they are comparatively volatile. In addition, equity markets are the most volatile type of investment and their price movements can vary drastically in a single day.

Further, a primary benefit of equity markets is that they offer a great opportunity to build one’s portfolio or wealth. Those who have deposited interest into fixed deposits and are expecting to earn higher returns with their money over time can invest in these very risky instruments. It can be done as an equalizer between the capital borrowed for other purposes and your money as well. The process of investment in equities has become popular. This is because it involves high returns from the brief period it takes to make an investment decision.

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