The Indian Financial Market Scenario

The financial market for any nation depends on the well-being of the money market and the investors in long-term and short-term investments. But why should investments occur? For a nation to witness growth and harness the power of its resources, investments are essential and thus to start up any business unit for that matter, investments are of a key concern. This not only depends on the ready availability of the money in the market, but also to a great deal on the mechanism of transmission of such funds and the interaction between the lenders and borrowers.

The Indian financial market essentially comprises of two major segments: The money market and the capital market. The money market deals with short-term investments and turnover of money, whereas the capital market deals with long-term investments and thus the turnover of long-term credit. The money market does not deal with a specific location or a certain amount of money. Instead it deals with a whole lot of financial institutions and other organizations that are involved in the transactions of the funds and short-term investments.

Money market also takes into account the various investors in the market who tend to supply the various funds and the other dealings that happen over telephone, e-mail and more. The Reserve Bank of India, Co-operative banks and other NBFCs form a major part of the money market as well. Well-known common examples of money market transaction involve the short-term deposits and investments that happen in any common bank. Commercial bills, Treasury bills, Call money and much more form a part of these transactions in the money market.

Another popular term associated with the money market is the intraday. What is intraday? In simple words, intraday can be defined as the ups and lows of the security. For instance, a new intraday refers to the upliftment in the value of the security in the money market. So, turnovers and new intradays are ideal signs of a vital money market in the country.

Capital Market on the other hand deals with medium and long-term funds, mostly stocks and shares. It requires the involvement of financial organizations that require pledging of investments for borrowing money. The most common and popular mode of investment is the equity sharemarket, that is involved in the upbringing of new organizations. The only disadvantage of such a sharemarket is that unlike the preference shares, once declined, there is no means of retrieval.

Reliance Share Price in the Indian market has been the most popular amongst investors ever since the industry plunged into the making of cellular phones and had their shares boosted up in the equity as well as the preferential markets. But, the present scenario doesn’t seem to work well for the Ambanis. Reliance share price has been facing a constant set back in the market with prices dropping as low as 13% and even more day by day. Latest news that have crept up state that Reliance Capital have decided to sell away their stake to Nippon Japan, one of the leading investment stake holders in the foreign investment sector of the share market India.

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