History Of Stock Market

IN THE USA : History of stock market trading in the United States can be traced back to over 200 years ago . Then , the colonial government decided to finance the war by selling bonds , government notes promising to pay out at profit at a later date . At around the same time , private banks began to raise money by issuing stocks , or shares of the company to raise their own money . This was a new market , and a new form of investing money , and a great scheme for the rich to get richer . A little further on the history timeline , more specifically in 1792 , a meeting of twenty four large merchants resulted into a creation of a market known as the New York Stock Exchange . At the meeting , the merchants agreed to meet daily on Wall Street to daily stocks and Bonds .
Further in history , in the mid 1800’s , the United States was experiencing rapid growth . Companies needed funds to assist in expansion required to meet the new demand . Companies also realized that investors would be interested in buying stock i.e., partial ownership in the company . History has shown that stocks have facilitated the expansion of the companies and the great potential of the recently founded stock market was becoming increasingly apparent to both the investors and the companies .
By 1900 , millions of dollars worth of stocks were traded on the street market . In 1921 , after twenty years of street trading , the stock market moved indoors . History brought us the Industrial Revolution , which also played a role in changing the face of the market . New form of investing began to emerge when people started to realize that profits could be made by re-selling the stock to others who saw a value in a company . This was a beginning of the secondary market , known before , because it was now fueled by highly subjective speculation about the company’s future .
This was the pretext for the appearance of such stock market giants as NYSE . History books tells us that the reason why NYSE is so highly regarded among stock markets is that they only trade in the very large and well-established companies . I acted as a more stable investment alternative for people interested in throwing their capital into the stock market arena . The smaller companies making up the stock market formed into what eventually became the American Stock Exchange . Contrary to the 80-year old history , today NYSE , AMEX and hundreds of other exchange markets make a significant contribution to the national and global economy .
The growth in the number of the market participants led the government to decide that more regulation of the stock market was needed to protect those investing in the stock . History was made in 1934 , when following the Great Crash , Congress passed the Securities and the Exchange Act . This act formed the securities and the Exchange Commission , just like SEBI in India , which through the act and succeeding amendments , regulates the American Stock market with the help of the exchanges . It also includes overseeing the requirements for a company to issue a stock shares to the public and ensures that the company offers relevant information to potential investors . SEC also oversees the daily actions of market exchanges and how they trade the securities offered .
Although historically , investing in the stocks was a “ hobby “ for the rich , an average person too soon came to realize the value of the investment as compared to traditional assets like land or a house .

IN INDIA : The working of the stock exchanges in India started in 1875 . BSE is the oldest stock market in India . The history of the Indian stock trading starts with 318 persons taking the membership in the Native Share and Stock Brokers Association , which we now know by the name of Bombay Stock Exchange , or BSE in short . In 1965 , BSE got permanent recognition from the Government of India . National Stock Exchange comes second to BSE in terms of popularity . BSE and NSE represent themselves as synonyms of Indian stock market . The history of Indian stock market is almost the same as the history of BSE .
Many foreign institutional investors are investing in Indian stock markets on a very large scale . The liberal economic policies pursued by successive Governments attracted foreign institutional investors in a large scale .
India , after United States hosts the largest number of listed companies . Global investors now ardently seek India as their preferred location for investment . Once viewed with skepticism stock market now appeals to middle class Indian also . Many Indians working in the foreign countries now divert their savings to stocks . This recent phenomena is the result of opening up of online trading and diminished interest rates from the banks . The stockbrokers based in India are opening offices in different countries mainly to cater the needs of Non-Resident Indians . The time factor also works for the NRIs . They can buy or sell a stock online after returning from their work places .