Mumbai16 minutes ago
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The stock market dropped 1048 points this week.
The market value of Reliance Industries, the country’s largest private sector company, has come down by Rs 59,799 crore this week (May 5-9) amidst Indo-Pak tension. Now it is ₹ 18.64 lakh crore. Last week it was Rs 19.24 crore.
Banking shares had more selling. The value of ICICI Bank decreased by ₹ 30,185 crore to ₹ 9.90 lakh crore, HDFC Bank value has come down to ₹ 14.46 lakh crore to ₹ 14.46 lakh crore and State Bank of India (SBI) value has come down to ₹ 18,429 crore to ₹ 6.96 lakh crore.
Infosys-ITC benefits in this week’s business
The market value of the software company Infosys increased by ₹ 415 crore to ₹ 6.26 lakh crore in the business run from May 5 to May 9. At the same time, the value of FMCG company Hindustan Unilever (HUL) has increased ₹ 2,538 crore to ₹ 5.48 lakh crore during this period.
The market was closed on Friday
The stock market declined on the last trading day of the week i.e. Friday, May 9. The Sensex fell 880 points (1.10%) to close at 79,454. The Nifty also declined by 266 points (1.10%), it closed at 24,008 levels.
The Sensex declined 25 out of 30 shares. ICICI Bank came down 3.24%. A total of 16 stocks, including Power Grid, Ultratech Cement, Bajaj Finance, Reliance, closed down nearly 3%. However, Titan, Larsen and Toubro, Tata Motors and SBI climbed by 4.25%.
38 out of 50 shares of Nifty declined. The realty sector declined 2.38%, financial services 1.76%, private bank 1.29% and oil and gas declined by 0.78%. Whereas, the government banking index closed 1.59% media 0.95% and Consumer Durables closed up 0.92%.
What is a market capitalization?
Market cap is the value of any company’s total outstanding stocks, ie all the shares that its shareholders currently have. Its calculation is done by multiplying the total number of issued shares of the company by their price.
Understand this with an example …
Suppose … People have purchased in 1 crore stock market of company ‘A’. If the price of a share is Rs 20, then the company’s market value will be Rs 1 crore x 20 or 20 crores.
The market value of companies increases due to increase in share prices or decreases. There are many other reasons for this …
How does the market value grow?
- Share price- Increased demand for shares in the market leads to competition, due to which prices rise.
- Strong Financial Performance: The company attracts investors in things like earnings, revenue, profits.
- Positive News or Event- Product launch, acquisition, new contract or regulatory approval increases demand for shares.
- Market Service- Bulish market trends or sector specific expectations such as IT sector estimate attracts investors.
- Issuing shares at high price: If a company issues new shares at a high price, the market cap increases without decreasing the value.
How does the market value decrease?
- Decline in share price- Due to lack of demand, the price of shares falls, it directly affects the market cap.
- Bad results- Investors sell shares due to decrease in earnings, losses or losses in a financial year or quarter.
- Negative News- Any negative news related to scandal, legal action, product failure or leadership reduces investment.
- Economy or market decline- The recession, increase in interest rates and below can drop market shares.
- Share buyback or delisting: If a company purchases shares back or becomes private, the number of outstanding shares decreases.
- Industry Challenge: The demand for shares decreases due to regulatory change, technological disorder or declining demand for a sector.
How does the market cap use?
- The market cap is used to catarise the shares of companies, so that investors will help in choosing them according to their risk profiles. Such as large cap, mid cap and small cap companies.
- Whether or not a company will get a profit in shares, it is estimated by looking at many factors. One of these factor is also a market cap. Investors can find out how big the company is by looking at the market cap.
- The higher the market cap of the company, the better it is considered to be a good company. According to demand and supply, stock prices rise and decrease. Therefore, the market cap is the public’s public percevad value.
