Mumbai2 hours ago
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In terms of market capitalization, the value of 4 out of the top-10 companies in the country has increased by Rs 1 lakh crore in the last week. During this time Reliance Industries was a gainer. The company’s market cap has increased by Rs 30,786 crore to Rs 19.53 lakh crore.
HDFC Bank’s value increased 26,668 crore, Bajaj Finance’s ₹ 12,322 crore and ICICI Bank’s ₹ 9,790 crore has increased. Here, the value of Tata Consultancy Services (TCS) has come down by Rs 28,510 crore to Rs 12.24 lakh crore.
The market was gaining momentum last week
After the cut in interest rates of RBI’s Monetary Policy Committee, the stock market was boom today i.e. on June 6. The Sensex closed at 82,188 with a gain of 746 points. At the same time, the Nifty also increased by 252 points. It closed at 25,003.
Banking, finance, auto and metal shares increased more today in today’s business. Shriram Finance’s stock closed up to 5.46% and Bajaj Finance’s stock climbed by 4.90%. JSW Steel shares rose by 3.56%.
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.
