Venkat

Financial Markets and Institutions
Bombay Stock Exchange - SENSEX
Submitted to:
Mr. T.N.Sekhar
Prepared by:
Venkatesh C
ECU-Finance
Reg no: 10153102

1.0. Introduction to BSE
Bombay Stock Exchange, popularly known as the BSE is one of the oldest stock exchange in the
Asian region with an existence of around 133 years. It was set up as the ‘Native Share and Stock
Brokers’ Association (Bseindia, n.d.) in the year 1875. BSE is the pioneer stock exchange in
India to obtain the acknowledgement from the government under the Securities Regulation Act,
1956 (Bseindia, n.d.). BSE is considered to be the pivotal force in the development of the capital
market in India which has helped the growth of the corporate sector in India by providing
proficient access to the required resources. BSE now being a demutualised entity which was
incorporated under the Companies Act, 1956 works closely with its two strategic partners
namely the Singapore exchange and the Deutsche Borse (Bseindia, n.d.). BSE is the first Indian
stock exchange to obtain the ISO 9001:2000 quality certification as well as the BS certification
on information security management (Bseindia, n.d.) for its online trading system.
Now BSE is considered to be the world’s number one stock exchange in terms of the number of
total listed companies and 5th largest in terms of volume of transactions (Bseindia, n.d.). There
are nearly around 4,700 listed companies in BSE and the total market capitalization as on 31st
Dec 2007 is US$1.79 trillion (Bseindia, n.d.).
The BSE Index which is the SENSEX, is the country’s first stock market index which is being
tracked worldwide. Other than the SENSEX, the Bombay Stock exchange offers some 21 indices
which include 12 sectoral indices (Bseindia, n.d.). The agreement with Deutsche Borse has
enabled the SENSEX to be available to investors in America and the Europe as well. SPIcE,
which is the first Exchange Traded Fund on SENSEX (Bseindia, n.d.) brings in the investors a
tool for trading and is used for trading, investment, hedging and etc.
Venkatesh C –ECU Finance Page 2

The variety of services offered by BSE includes:
 The online trading system (BOLT) which facilitates the on-line screen trading of
securities (Bseindia, n.d.).
 BSEWEBX.com: it is the first centralized exchange based internet trading system
(Bseindia, n.d.).
 Surveillance: The BOSS system constantly monitors the real time price movements,
volumes and the default risk measurements (Bseindia, n.d.).
1.1. SENSEX Calculations
SENSEX was first launched in the year 1986 and was calculated on the basis of ‘Market
capitalization weighted’ method taking into account the 30 stocks of well established, large and
financially sound companies across the key sectors.
Since Sep 2003, SENSEX is being calculated by the ‘Free-float Market Capitalization’
methodology (SENSEX, n.d.) wherein the index level reflects the market value (free float) of 30
stocks relative to the base period.
(SENSEX, n.d.)
The base period for calculating SENSEX is the year 1978-79 where the base value is considered
with 100 index points i.e. 1978-79=100.

Considering the above factors the SENSEX is calculated as below.
(SENSEX, n.d.)
The frequency of the index calculations is for every 15 seconds and the SENSEX value is
circulated in real time.
1.2. The factors affecting the SENSEX are as below:
• The increase in the Inflation rate

• Any changes in the interest rate
• Rise or increase in the crude oil prices
• Policies of the Reserve Bank of India (Central bank in India)
• Global market and environment
• Industry stock
• Company’s earning and growth

1.3. SENSEX and Volume Activity in BSE
1.3.1. SENSEX close from Apr 2008 to May 2009 of BSE
Month Close
Apr-08 17,287
SENSEX Trend
May-08 16,416 20,000
Jun-08 13,462 18,000
Jul-08 14,356 16,000
14,000
Aug-08 14,565
12,000
Sep-08 12,860 10,000
Oct-08 9,788 8,000
N
X
S
E
Nov-08 9,093 Close

6,000
Dec-08 9,647 4,000
Jan-09 9,424 2,000
Feb-09 8,892 -
Mar-09 9,709
Apr-09 11,403
May-09 13,887
Table1.0: SENSEX Close Chart1.0. SENSEX Trend from Apr08 to May-09
(Timesofindia, 2009)
 As per the chart 1.0, there exist two support levels near 9000 points which is seen over
the months from Oct 08 to Mar-09
 The other support level is seen at Jun08 to Aug 08, where the SENSEX is almost at an
average of 14000 points and this similar trend is reflected in the year 2009 with SENSEX
moving up to 14K points in the mid-may 09.

1.3.2. Volume Activity in BSE from Apr08 to May-09
Month Volume %Change

Apr-08
May-08
21,100
20,100
-19%
-5%
% Vo lum e Change
Jun-08 24,300 21% 60%
Jul-08 30,300 25% 40%
Aug-08 25,200 -17% 20%
Sep-08 31,700 26% 0%
Oct-08 46,400 46%
-2 0 %
Nov-08 48,300 4%
-4 0 %
Dec-08 56,300 17%
Percntag
Jan-09 61,400 9% -6 0 %
A p-r M ayJ u -n J u-l A u gSe -p O c- t N o vD e-cJ an- F e -b M arA p-r M ay
Feb-09 36,600 -40%
0 8 -0 8 0 8 0 8 -0 8 0 8 0 8 -0 8 0 8 0 9 0 9 -0 9 0 9 -0 9
Mar-09 46,000 26%
Apr-09 52,900 15% % C h an -1ge9 -5 %2 1 %2 5 %-1 7 2 6 %4 6 %4 %1 7 %9 % -4 0 2 6 %1 5 %1 1 %
May-09 58,600 11%
Table1.1: Transaction Volume Chart1.1. Volume Trend from Apr08 to May-09
 The transaction volume denotes the liquidity in the market
 Higher volume denotes higher liquidity in the market (more trading activity)

1.3.3. Linear trend in the BSE Sensex for the period Jan-08 to May-09
Month High Low Close

May-09 14930.54 11621.3 13887.15
Apr-09 11492.1 9546.29 11403.25
Mar-09 10127.09 8047.17 9708.5
Feb-09 9724.87 8619.22 8891.61
Jan-09 10469.72 8631.6 9424.24
Dec-08 10188.54 8467.43 9647.31
Nov-08 10945.41 8316.39 9092.72
Oct-08 13203.86 7697.39 9788.06
Sep-08 15107.01 12153.55 12860.43
Aug-08 15579.78 14002.43 14564.53
Jul-08 15130.09 12514.99 14355.75
Jun-08 16632.72 13405.54 13461.6
May-08 17735.7 16196.02 16415.57
Apr-08 17480.74 15297.96 17287.31
Mar-08 17227.56 14677.24 15644.44
Feb-08 18895.34 16457.74 17578.72
Jan-08 21206.77 15332.42 17648.71
Table 1.2.Sensex points from Jan-08 to May-09
Linear Trend
25000
20000
15000 High
S
n
e
10000
x
Low
s
5000 Close
0 Linear (Close)
r -0 9
r -0 8
b -0 9
p -0 8
b -0 8
l -0
8
n -0 8
r -0 9
c -0 8
r -0 8
t -0 8
g -0 8
n -0 9
v -0 8
n -08
M -0 9
y -0 8
Ju
O
M
M
Ju
Ja
Ja
D
A
A
M
N
p
p
S
e
e
A
F
F
u
e
o
a
a
a
a
y
Chart 1.2.Sensex linear trend from Jan-08 to May-09


1.4. BSE-30 Index companies with the % weightage in SENSEX and the free float factor
Weightage (%) in Free float

SENSEX as on 29th Apr Adj.Factor as on 29th
Company 09 Apr 09
ACC LTD. 0.83 0.55
BHARAT HEAVY ELECTRICALS LTD. 3.47 0.35
BHARTI AIRTEL LTD. 6.1 0.35
DLF LIMITED 0.72 0.15
GRASIM INDUSTRIES LTD 1.5 0.75
HDFC BANK LTD 4.87 0.85
HINDALCO INDUSTRIES LTD 0.73 0.65
HINDUSTAN UNILEVER LTD. 3.13 0.5
HOUSING DEVELOPMENT FIN. CORPN.
LTD 5.13 0.85
ICICI BANK LTD. 6.51 1
INFOSYS TECHNOLOGIES LTD. 8.99 0.85
ITC LTD. 6.12 0.7
JAIPRAKASH ASSOCIATES LIMITED 1.11 0.55
LARSEN & TOUBRO LTD. 5.68 0.9
MAHINDRA & MAHINDRA LTD 1.25 0.75
MARUTI SUZUKI INDIA LIMITED 1.44 0.5
NTPC LTD. 2.88 0.15
ONGC CORPN 4.53 0.2
RANBAXY LABORATORIES LTD 0.34 0.4
RELIANCE COMMUNICATIONS LTD. 1.9 0.35
RELIANCE INDUSTRIES LTD. 17.37 0.5
RELIANCE INFRASTRUCTURE LTD 1.25 0.65
SUN PHARMACEUTICAL INDUSTRIES
LIMITED 1.29 0.4
STATE BANK OF INDIA 4.47 0.45
STERLITE INDUSTRIES. 1.42 0.4
TATA CONSULTANCY SERVICES
LIMITED 1.87 0.25
TATA MOTORS LTD. 0.73 0.55
TATA POWER CO. LTD. 1.7 0.7
TATA STEEL LIMITED. 1.49 0.7
WIPRO LTD. 1.19 0.2
(Bseindia, n.d.)

2.0. Analysis and Predictions
2.1. Week 1
Week Days Date Opening Closing

1 Monday 13-Apr-09 10803.86 10967.22
Tuesday 14-Apr-09 10967.22 10967.22
Wednesday 15-Apr-09 10967.22 11284.73
Thursday 16-Apr-09 11284.73 10947.40
Friday 17-Apr-09 10947.40 11023.09
Table 1.3.Week 1 SENSEX
(Timesofindia, 2009) , (businessweek bse-sensex, 2009)
The major events which took place during the week are as below:
13th April 09
 The world crude oil prices surged below the US$ 52 per barrel due to the demand
downgrade by the International Energy agency (Oil Slides, 2009)
 Pantaloon shares surge high by 22% ahead of the board meeting for considering the
restructure of the business (creating of separate legal entities) (Pantaloon, 2009).
 The Satyam Company’s share surged more than 16% ahead of the bidder announcement
for acquiring Satyam. The share prices move to Rs. 54.90 from Rs.49.

 The SENSEX closed at 163 points up or 1.51% mainly due to the aggressive buying of
funds keeping in mind the government stimulus packages that might help to revive the
economy.
 Foreign institutions money poured into the Indian equity market with share worth Rs
580.49 crore was bought.
14th April 09
 No market on 14th April due to public holiday
 BSE Sensex to take its cue for the next day market based on earnings results of Infosys
Technologies. The revenue guidance of Infosys for the coming year will decide on the
Sensex trend for the remaining days of the week.
15th April 09
 The BSE Sensex fell by 248 points which is 2% as the Infosys earnings outlook falls and
dampened the sentiment in the market. Infosys showed a 4.1% decline in its dollar
revenue and the forecasts for Q4 earnings were missed leading to weakening of the share
prices of the IT major.
With Infosys having a higher weightage in Sensex, the adverse sentiments arising from
its downslide earnings have impacted the Sensex to fall adversely by around 248 points.
 Rise in share prices of banking companies is expected in coming days ahead of the
announcement of RBI’s monetary policies (expected cut in interest rates) scheduled next
week.

 Sharp rise in the volumes of small and mid cap with roughly 499 stocks in the ‘B’
segment. The small and mid cap indices increased 5.32% and 3.95% outperforming the
Sensex increase of overall 2.9% (317.51 points up)
 The foreign institutions total net purchases of share in India was almost Rs 685 crors
 For the first time in 6 months the Sensex crossed over 11,000-mark outperforming the
markets in Europe and Asia.
16th April 09
 Major Index stocks such as the DLF, Reliance Infra, Tata Motors and etc which had a
good run in the past few weeks almost shed by around 8-14%.
 Total Indian equity shares worth bought by foreign institutions is worth around Rs 479
crore.
17th April 09
 Successful share placement by Unitech to the institutional investors
 1,362 shares were advanced as against the 1,1194 shares that fell, overall the market
breadth was in favour of the gainers in BSE
 BSE Mid- cap index gained around 1% which performed better than the benchmark, but
the small cap stock was comparatively passive
 Increase in the stock by 72% over a period of 1 month for RDB Inds driven by a UK
based cigarette maker Company to hold some stakes in the company.

Sensex Trend for Week 1
Week1
11400
11300
11200
11100
11000
10900
N
X
S
10800
E
10700
13-Apr -09 14-Apr -09 15-Apr -09 16-Apr -09 17-Apr -09
Series1 10967.22 10967.22 11284.73 10947.40 11023.09
The major up and downward slope in Sensex from 14th April to 16th April is explained by the fact
that the expectation on earnings outlook of Infosys pushed the Sensex points on 15th and the
same pulled down by 248 points on 16th when the expected results of Infosys dampened the
market sentiments.
Prediction for Week 2

The Sensex for the Week 1 ended at 11023.09 points and is expected to rise to the level of 11500
say a 500 points increase for the Week 2. The reasons can be attributed to:
 Reliance industry profits may show an encouraging signs and the financial performance
will fall below the market expectations.
 Expected cut down in the repo and reverse repo rates by RBI
3. Week 2

2 Monday 20-Apr-09 11023.09 10979.50
Tuesday 21-Apr-09 10979.50 10898.11
Wednesday 22-Apr-09 10898.11 10817.54
Thursday 23-Apr-09 10817.54 11134.99
Friday 24-Apr-09 11134.99 11329.05
The weekly explanations are as below
20th April 09 to 24th April 09
(businessweek bse-sensex, 2009)
 For the week ended 24th April 09, the stock market ended on a positive note for the
continuous seventh week in line. The market was a more of bullish rather than bearish
with existence of sustained buying seen in the foreign funds in the midst of improvement
signs in the Indian economy and possibility of reduction in the interest rates.

 As a part of the annual credit policy, the short term rates were cut by 25 basis by the RBI
to increase the growth of the economy.
 The Axis bank announced higher than expected results with the net profit of around Rs
581 crore for the last quarter of 2009.The higher profit is attributed to the higher other
income which included the Rs 166 crore traded profits booked to the accounts during the
4th quarter.
 The net profit of HDFC for the fourth quarter was in line with the market expectations in
spite of increase in fee income and the bad debts. Overall HDFC reported a 34% increase
in the net profit for the quarter.
 Reliance Infrastructure had a 5% increase in the net profits compared over previous year
with the net profits at Rs 1,139 crore. There was a 52% increase in total operating income
and it declared a dividend of Rs 7 per share. The main drivers behind this included the
high growth in sales of the power units and revenue growth in the construction and the
engineering division. But in contrast, though the net profit of RIL was down by 1%
compared over last year with standings at Rs 3,874 Cr., there were significant gains in the
EBIT despite a fall in the gross margins. So overall RIL exceeds the market expectations.
 The consolidated net profit of Wipro technologies increases by 14.77% and stood at Rs.
1,010 Cr for the fourth quarter.
 Tata Consultancy Services (TCS) consolidated net profits were up by 7%, but the quarter
over quarter profits fell by 2.1%. On the whole it had an adverse impact in the market
sentiments.

 Maruti Suzuki fourth quarter results posted a huge disappointment for the Dalal Street as
the net profit fell 18.32%. On the other hand Hero Honda had good results exceeding the
market expectations with a good product mix and volume growth of 13% YOY. The
revenue growth was 23% year over year.
 In the cash segment the foreign institutional investors remained as the buyers with a value
of Rs. 583 Cr.
 The repo rates and the reverse repo rates have been cut by 25 basis points by the RBI
with repo rate at 3.25% and the reverse repo rate is at 4.75%.
 The WPI inflation was at 0.26% in the current reported week as against 0.18% in the last
week.
(market update, 2009)
Week 1 vs. Week 2 Comparison
Change
On 17th Apr 09 On 24h Apr 09 Points %
SENSEX 11023.09 11329.05 305.96 2.78%
(market update, 2009)
Week 2 Sensex Trend

Week2
11400
11200
11000
10800
N
X
S
E
10600
10400
Series1 10979.50 10898.11 10817.54 11134.99 11329.05
The Major upward movement in the Sensex for the whole week is driven by good overall
financial results by most of the companies.
The prediction for week 2 was estimated with 200 points more, but the major fall in Sensex is
from the unexpected fall in the financial performance of large cap companies. Fall in RIL profit
not expected, and RIL having a high weightage % in Sensex, the impact was significant.
 Markets are expected to be more unstable keeping in mind the elections on the way and
will impact the market movements.
 Investors can increase the exposure to equities in a tottered method to benefit from the
equity market in 2 years down the line.
 The Sensex close for the coming week is expected to be of 11,200 mark.

4. Week 3

3 Monday 27-Apr-09 11329.05 11371.85
Tuesday 28-Apr-09 11371.85 11001.75
Wednesday 29-Apr-09 11001.75 11403.25
Thursday 30-Apr-09 11403.25 11403.25
Friday 1-May-09 11403.25 11403.25
The weekly explanations as below:
 The BSE Sensex gained on the beginning of the market on 27th Apr with high purchases
of strong stocks of banking and capital goods companies.
 The volatility in the market for this week is increased due to the expiry of the F & O.
 Global cues and strong buying from the Foreign Institutional investors is triggering a
solid move in the Sensex points. The FII gave strong 3168 points or which is 38% surge
to the BSE-30 Index for the April 09 month from a low figure during the March month.

 There was worldwide dumping of shares by the investors on 28th April, due to the swine
Flu epidemic which can choke the global economy recovery.
 Sensex stocks was in the red as it was down by almost 370 points driven by fall in the
prices for major players like Tata Steel, HDFC and etc.
 More selling in the market as the domestic and foreign institutional investors remained as
net sellers.
 Expected scope of 50-100 basis points cut in the deposit and the lending rates.
 Aditya Birla Nuvo posted a net loss of Rs. 141.15 Cr. and the shares fell by 10.54%. The
loss was attributed to the aggressive growth initiatives of the company giving a gestating
impact.
 Markets closed on 30th April and 1st of May due to the election results declaration in
Maharashtra and Labour Day on May 1st.
(wordpress, 2009)
Week 3 Sensex Trend

Week3
11600
11400
11200
N
X
S
E
11000
10800
27-Apr -09 28-Apr -09 29-Apr -09 30-Apr -09 1-May -09
27-Apr -09 28-Apr -09 29-Apr -09 30-Apr -09 1-May -09
Series1 11371.85 11001.75 11403.25 11403.25 11403.25
The Week 3 Sensex closed 200 points higher than the prediction made in Week 2, majorly driven
by high purchasing volumes of strong stocks of capital goods and banking companies. But there
was some offset too from the high volatility, major companies share price fall and the swine flu
outbreak.
The Sensex for week 3 closed at 11403.25 and the expected Sensex for the week 4 would be
around some 300 points increase and may close at a rough figure of 11700.

5. Week 4

4 Monday 4-May-09 11403.25 12113.29
Tuesday 5-May-09 12113.29 12092.96
Wednesday 6-May-09 12092.96 11952.75
Thursday 7-May-09 11952.75 12116.94
Friday 8-May-09 12116.94 11876.43
The weekly highlights:
 The Sensex on 4th May touched a seven month high recording the biggest gain in a day.
The Sensex was up by 731.50 points
 The current upsurge in the market was driven by the increase in the shares of banking,
technology and metal companies.
 DLF Ltd, India’s biggest real estate company reported a 92.69% fall in the Q4 net profits
and an overall 41% decline in full year profits due to financial meltdown (real estate
sector worst affected.
 The oil prices stood at US$ 54.07 a barrel and there was a slight increase in the domestic
markets.
 Indian exports had an impact due to the low inflation and exports dropped by 33.3%.

 Ranbaxy shares surged up by around 6.65% over the prior close in the BSE.
 Bearish sentiments prevailed as the shares in the IT, refinery, FMCG sectors reported hey
losses.
 High selling pressures at the counters for Reliance, Infosys, SBI, TCS and HDFC which
together hold nearly 37% weigtage in the Sensex
 SBI and L&T fell after an increase of about 36% over the past 3 days on the anticipation
that the government will press on higher infrastructure spending and asset sales.
 ICICI Bank and Reliance Industries shares fell as the revival of the economy faded out
when the Federal reserve of the US cut the forecasts of economic growth.
 The metal index has increased by 8.77% mainly driven by the rise in the stock prices of
Tata Steel and the Sterlite Industries.
 Increase in the Sensex was partially supported by the foreign funds (mainly being
buyers), helped in bringing back the retail investors confidence.
Week 4 Sensex Trend

The week 4 predicted point was at 11,700 as against the 11,876 points as per the market. The
increase of roughly around 176 point can be attributed not taken into account is the upsurge in
the metal and the banking sector and as well as the foreign funds buyers.
The Week 5 expected Sensex is to be around 12,200 points.
6. Week 5

5 Monday 11-May-09 11876.43 11682.99
Tuesday 12-May-09 11682.99 12158.03
Wednesday 13-May-09 12158.03 12019.65
Thursday 14-May-09 12019.65 11872.91
Friday 15-May-09 11872.91 12173.42

The highlights of 11th May 09
 The market opened at 11,876.43 which was down by 240 points with nearly 26
company’s stock been declined.
 The oil prices was slipped to a US$ 58.43 per barrel as on 11th May
 Major indices continued to be on the losing streak with stocks declining nearly 2%.The
fall in the Sensex attributed to the doubts over the domestic market recovery and
downward trend in the world markets.
 Real estate sector performed badly with the BSE Realty index was down over 5%.
Figure 1.0.Intraday movement of Sensex on 11th May 09
12th May 09

 The industrial output index fell by 2.3% pulled by a drop of around 3.3% in the output of
the manufacturing sector. This dip did not affect the stock market in rallying up to a high
for a seven month period.
 Surplus liquidity available in the system is considered as a major factor, plus a hedge
funds which has helped in limiting the exposure to Taiwanese share and the money being
redeployed in India.
 Poll results due in the coming week act as trigger for the upsurge.
 Shares worth R 452 cr. made out of foreign funds on the net basis.
 Domestic Mutual Funds worth Rs 177 Cr. bought.
Figure 1.1.Intraday movement on 12th May-09
13th May 09
 The inflation has dropped to 0.48 percent

 The Crude oil in Asian Market was quoting at around US 57 per barrel as compared to
$58 a barrel previous day.
 Shares of FMCG, automobile and realty sector showed signs of improvement with DLF
Ltd shares gained by 7.18% and Maruti by 0.75% respectively.
 Banking and IT shares dropped with the doubts of no political may gain majority.
 Most investors adopted the trading strategy based on the volatility and the same been
applied to equity options by taking into consideration of high volatility in the month of
May.
 Overall Sensex down by 138.38 points
14th May 09
 The equity benchmarks ended low and the profits were booked by the investors after the
exit poll. Sensex was down by 146.74 points.
 The share performance of shipping and related shipping construction companies
performed better due to the good performance of the Baltic dry freight index.
15th May 09
 The Sensex had increased 300.51 points after falling for the past two days. The upsurge is
driven by good performance of the bank stocks from RBI’s plan to enhance the growth.

 The reality and the automobile sector which are sensitive to interest rates also contributed
to the increase.
 ICICI Bank and the SBI stocks surged by 7.3% and 3.5% respectively.
 The banking, metal and consumer durables index rose by 3.86%, 1.76% and 3.185
respectively.
Week 5 Sensex Trend

The Sensex for Week 5 ended at 12,173.42 as against the prediction made in Week 4 to the
extent of 12,200. The variation is not much in comparison and it can attributed to the exit poll
factor and the expectation of a stable government will pull up the stocks to rise and giving a rise
in the Sensex points.

7.0. 5 day and 7 day Moving Average of Closing BSE SENSEX
Date SensexClosing 5dayMovingAverage 7dayMovingAverage

13-Apr-09 10,967.22
14-Apr-09 10,967.22
15-Apr-09 11,284.73 11,037.93
16-Apr-09 10,947.40 11,040.39 11,009.61
17-Apr-09 11,023.09 11,026.57 10,988.23
20-Apr-09 10,979.50 10,933.13 11,012.19
21-Apr-09 10,898.11 10,970.65 11,018.53
22-Apr-09 10,817.54 11,031.84 11,079.16
23-Apr-09 11,134.99 11,110.31 11,076.11
24-Apr-09 11,329.05 11,131.04 11,136.65
27-Apr-09 11,371.85 11,248.18 11,208.81
28-Apr-09 11,001.75 11,301.83 11,292.48
29-Apr-09 11,403.25 11,316.67 11,432.24
30-Apr-09 11,403.25 11,464.96 11,541.37
1-May-09 11,403.25 11,683.20 11,624.36
4-May-09 12,113.29 11,793.10 11,783.67
5-May-09 12,092.96 11,935.84 11,851.27
6-May-09 11,952.75 12,030.47 11,891.23
7-May-09 12,116.94 11,944.41 11,999.06
8-May-09 11,876.43 11,957.43 11,985.68
11-May-09 11,682.99 11,970.81 11,954.24
12-May-09 12,158.03 11,922.00 11,985.77
13-May-09 12,019.65 11,981.40
14-May-09 11,872.91
15-May-09 12,173.42
Moving Average Trend

12,500.00
12,000.00
11,500.00
Sensex Closing
11,000.00
N
X
S
E
5 day Moving Average

10,500.00
7 day Moving Average
10,000.00
Linear (Sensex Closing)
-0
9
-0
9
-0
9
-0
9
-0
9
-0
9
-0
9
-0
9
-0
9
-0
9
-0
9
-0
9
-0
9
-0
9
-0
9
-0
9
-0
9
1 -A
5 -A
7 -A
9 -A
1 -A
3 -A
5 -A
7 -A
9 -A
p
p
p
p
p
p
p
p
p
1 -M
3 -M
5 -M
1-M
3-M
5-M
7-M
9-M
r
r
r
r
r
r
r
r
r
a
a
a
y
y
y
a
a
a
a
a
y
y
y
y
y
3
1
1
1
2
2
2
2
2
1
1
(economictimes, 2009)

Based on the Moving average Trend, it is seen that both the 5 day and the 7 day moving average
move along the same pattern with the trend line nearing the moving averages.
According to given chart the trend of Sensex is showing an upward trend. But market is quite
uncertain because of the election result which is to be declared in the coming week. But investors
can do a day trading by using levels and restrict losses. In case of any investor(s) looking for
long term investment, they should wait till the election result is declared. Most investors are
bullish for the market because there is an expectance that the UPA government can be back to
power again and there can be a boom in the market.
Levels:
Resistance Levels
 12,000
 12,500
Support Level
 11500
 11000

Q1. Did the report reflect your own individual work (so that no plagiarism is involved)?
Yes, the report on the SENSEX completely represents my individual effort and work and does
not contain any views or opinions of the peers. (Grade A)
Q2. Were normal referencing conventions observed in writing this report?
Yes, the APA style of referencing have been observed and due credit has been given to
secondary context data used in writing the report. (Grade B)
Q3. Were there a minimum amount of editorial errors (eg. spelling errors, grammatical
errors, etc) in the report?
The editorial errors like the spelling mistakes and the grammatical errors have been thoroughly
checked and avoided using the spell check and grammar check options, so as to provide a good
quality report. (Grade A)
Q4. Was an outline provided of the theory related to what determines prices in your area?
A clear cut outline was provided in terms of the theory and the same has been applied in the
analysis made at my end on the stock price movements. Based on the movements seen in the stoc
prices and other applicable factors the analysis was made(Grade C)
Q5. Were the specific factors that you considered influenced the market each week clearly
identified?
Yes, the factors that were considered at my end as an influential factor in the Sock Market have
affected the movements in the Sensex and has been clearly identified an explained. (Grade B)

Q6. Was there evidence in your assignment that you analysed the available information
from your sources (rather than just simply listing what these sources said) in making your
decisions?
In the weekly analysis made to determine the movements of the Sensex, I have analysed the
available information and provided some inputs on the movements. (Grade B)
Q7. Was a clear statement given of how your predictions actually turned out each week?
Yes, a statement has been written at my end on how the predictions turned out for each and every
week by comparing it against the actual. (Grade B)
Q8. Was a detailed explanation given of why the weekly results differed from those you
expected?
A detailed explanation was has been written for each and every week to explain why my
predictions differed against the actual data. (Grade B)
Q9. In each case it is appropriate to construct a chart of the price activity over the period
being considered. That is for the currency and the Share market index plot a chart showing
the value each week (day?). This information can be found either in the newspaper or from
various web sites.
The graphs have been constructed using the data taken from e-papers like economic times and
this graphs, other related information can be cross verified with those sites from where the data
was retrieved. (Grade B)

References
Bseindia. (n.d.). Retrieved May 2, 2009, from Bseindia Web site:

http://www.bseindia.com/about/introbse.asp
businessweek bse-sensex. (2009). Retrieved April 2009, from businessweek Web Site:
http://bx.businessweek.com/bse-sensex/news/
economictimes. (2009). Retrieved Apr 2009, from economictimes Web site:

http://economictimes.indiatimes.com/default1.cms
market update. (2009). Retrieved from Kotakmutual Web site:

http://www.kotakmutual.com/kmw/downloads/weekly_market_update/weekly_market_up
date.pdf
Oil Slides. (2009). Retrieved April 13, 2009, from Financial Express:
http://www.financialexpress.com/news/oil-slides-below-usd-52-per-barrel/446388/
Pantaloon. (2009). Retrieved April 13, 2009, from Financial Express:

http://www.financialexpress.com/livearchive/business-news/13/4/2009/
SENSEX. (n.d.). Retrieved May 2, 2009, from Bseindia:

http://www.bseindia.com/about/abindices/bse30.asp
Timesofindia. (2009). Retrieved from Timesofindia Web Site:

http://epaper.timesofindia.com/Default/Client.asp?
skin=pastissues2&enter=LowLevel&AW=1243373582953
wordpress. (2009). Retrieved May 2009, from Wordpress Web site:

http://marketcalls.wordpress.com/2009/04/25/weekly-stock-market-forecast-report-27-4-
09-to-29-4-09/

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Financial Markets and Institutions

Bombay Stock Exchange - SENSEX

Reg no: 10153102

1.0. Introduction to BSE

Dec 2007 is US$1.79 trillion (Bseindia, n.d.).

Venkatesh C –ECU Finance Page 2

The variety of services offered by BSE includes:

securities (Bseindia, n.d.).

 BSEWEBX.com: it is the first centralized exchange based internet trading system

volumes and the default risk measurements (Bseindia, n.d.).

1.1. SENSEX Calculations

financially sound companies across the key sectors.

stocks relative to the base period.

with 100 index points i.e. 1978-79=100.

Venkatesh C –ECU Finance Page 3

Considering the above factors the SENSEX is calculated as below.

circulated in real time.

1.2. The factors affecting the SENSEX are as below:

• The increase in the Inflation rate

Venkatesh C –ECU Finance Page 4

1.3. SENSEX and Volume Activity in BSE

1.3.1. SENSEX close from Apr 2008 to May 2009 of BSE

Nov-08 9,093 Close

Table1.0: SENSEX Close Chart1.0. SENSEX Trend from Apr08 to May-09

the months from Oct 08 to Mar-09

moving up to 14K points in the mid-may 09.

Venkatesh C –ECU Finance Page 5

1.3.2. Volume Activity in BSE from Apr08 to May-09

Month Volume %Change

Table1.1: Transaction Volume Chart1.1. Volume Trend from Apr08 to May-09

 The transaction volume denotes the liquidity in the market

Venkatesh C –ECU Finance Page 6

Month High Low Close

Chart 1.2.Sensex linear trend from Jan-08 to May-09

Venkatesh C –ECU Finance Page 7

Weightage (%) in Free float

Venkatesh C –ECU Finance Page 8

2.0. Analysis and Predictions

Week Days Date Opening Closing

(Timesofindia, 2009) , (businessweek bse-sensex, 2009)

downgrade by the International Energy agency (Oil Slides, 2009)

restructure of the business (creating of separate legal entities) (Pantaloon, 2009).

Venkatesh C –ECU Finance Page 9

580.49 crore was bought.

 No market on 14th April due to public holiday

Sensex trend for the remaining days of the week.

prices of the IT major.

Venkatesh C –ECU Finance Page 10

Sensex increase of overall 2.9% (317.51 points up)

markets in Europe and Asia.

 Successful share placement by Unitech to the institutional investors

breadth was in favour of the gainers in BSE

the small cap stock was comparatively passive

based cigarette maker Company to hold some stakes in the company.

Venkatesh C –ECU Finance Page 11

Sensex Trend for Week 1

Prediction for Week 2

Venkatesh C –ECU Finance Page 12

will fall below the market expectations.

Week Days Date Opening Closing

The weekly explanations are as below

20th April 09 to 24th April 09