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Markets Glossary
Every term you'll meet in market reports, company filings, and investor conversations — defined in plain English, with the practical “so what” included.
The highest and lowest price a stock has traded at over the past year. A quick gauge of where the current price sits in its recent range — not a signal on its own.
An exchange framework that puts unusually volatile stocks under extra checks — like higher margins — to curb speculation. An ASM tag is a caution flag, not a verdict.
When a change in inflation is driven by an unusually high or low reading a year ago, not by fresh price moves this month. It's why a headline inflation number can jump or drop sharply without prices actually behaving differently now.
A large, well-established, financially sound company with a long track record — think index heavyweights. Usually lower volatility, rarely explosive growth.
Free additional shares given to existing shareholders from a company's reserves (e.g. 1:1 doubles your shares). Your stake's value is unchanged — the price adjusts down proportionally.
A company's net assets (assets minus liabilities) per share. Price-to-book compares the market price to it; useful mainly for banks and asset-heavy businesses.
The main global benchmark for oil prices. Because India imports about 85% of its crude, Brent is the single most direct channel from world events to Indian inflation, the rupee, and the trade deficit.
A sustained rising market is a bull market; a sustained falling one (commonly a 20%+ drop) is a bear market. Describes trend and mood, not a precise threshold.
The strategy of global companies diversifying supply chains away from a China-only base by adding another country. Trade and tariff shocks can accelerate 'China+1' shifts toward India, benefiting sectors like electronics manufacturing and specialty chemicals.
The maximum a stock or index can move up (upper circuit) or down (lower circuit) in a day before trading halts. Prevents runaway moves; limits vary by stock.
The main gauge of retail inflation: how much a fixed basket of household spending — food, housing, fuel, and more — costs versus a year ago. India's is compiled monthly by MOSPI on a 2012 base, combined for rural and urban.
The share of deposits banks must park in cash with the RBI, earning nothing. Raising it drains money from the system; cutting it frees banks to lend more. A liquidity lever, separate from the repo rate.
When a country imports more goods, services, and income than it exports. India runs a CAD largely because of its oil import bill, so a crude spike widens it — pressuring the rupee and, indirectly, foreign inflows into stocks.
The portion of traded shares actually settled into demat accounts rather than squared off intraday. High delivery suggests conviction rather than day-trading churn.
An electronic account that holds your shares in dematerialised (paperless) form. Required to hold Indian equities; paired with a trading account to transact.
Indian institutions — mutual funds, insurers, banks, pension funds — that invest in the markets. Their net buying/selling is tracked daily as a demand signal.
Annual dividend per share divided by the share price, as a percent. A 3% yield means ₹3 paid yearly per ₹100 invested — income, separate from price gains.
The preliminary document a company files with SEBI before an IPO, detailing its business, financials, and risks. The single best primary source before applying to an IPO.
Since 2019, banks price floating retail loans off an external benchmark — usually the RBI repo rate — plus a spread. It's why a repo cut flows through to your home-loan EMI at the next reset, instead of getting stuck at the bank.
Derivative contracts whose value derives from an underlying stock or index. Used to hedge or speculate with leverage — high risk, and most retail F&O traders lose money.
The gap between what the government spends and what it earns (excluding borrowing), in a year. It's bridged by borrowing, so a wide deficit means more debt and more interest to pay in future years. India targets a deficit of 4.4% of GDP for FY2025-26 — the single most-watched number in the Budget.
The shares actually available for public trading, excluding promoter and locked-in holdings. Index weights use free-float market cap, not total market cap.
Valuing a company by studying its business, financials, management, and industry to judge whether the price is fair. The opposite lens to technical analysis.
A bond issued by the government to borrow money. Its yield is the bedrock 'risk-free' rate that prices everything else, from home loans to corporate debt.
The unofficial, unregulated price at which an upcoming IPO's shares trade before listing. A rough sentiment gauge — often wrong, and no basis for a decision.
An escalating SEBI/exchange framework for stocks with weak fundamentals or abnormal price action, adding restrictions to protect investors. A strong caution flag.
The tax individuals pay on their salary and other income — now the government's single largest tax source, ahead of both corporation tax and GST. Under the default new regime for FY2025-26, income up to ₹12 lakh is effectively tax-free thanks to the Section 87A rebate.
A fund that mechanically mirrors an index like the Nifty 50, aiming to match its return at very low cost rather than beat it. A common core-holding for passive investors.
The market's 'fear gauge' — the expected volatility of the Nifty over the next 30 days, implied by option prices. It spikes when uncertainty rises and drifts low when the market is calm; a fast jump often precedes bigger swings.
The rate at which prices rise, so each rupee buys a little less over time. The RBI is mandated to keep CPI inflation at 4%, within a 2–6% band. Moderate inflation is normal; the danger is when it outpaces your income or savings returns.
The first sale of a private company's shares to the public, listing it on an exchange. Applications are made through ASBA at the fixed or book-built price band.
SEBI's size buckets by market cap: the top 100 companies are large-cap, 101–250 mid-cap, and the rest small-cap. Smaller usually means higher growth potential and higher risk.
The six-member RBI committee that sets the repo rate, typically meeting every two months. Its job is to hit the 4% inflation target while supporting growth — so its decisions move loan EMIs and deposit rates across the country.
NSE's benchmark index of 50 large, liquid Indian companies across sectors, weighted by free-float market cap. The most-quoted gauge of the Indian market.
Share price divided by earnings per share — how many rupees you pay per rupee of annual profit. A high P/E prices in growth; compare only within a sector.
A very low-priced small-cap share, often thinly traded and volatile. Low price ≠ cheap value; these are where most manipulation and losses concentrate.
The stake held by a company's founders/controlling group. Rising promoter holding (or pledging of shares) is a signal worth watching for alignment and risk.
The rate at which the Reserve Bank of India lends to banks — its main policy lever. Cuts tend to support equities and rate-sensitive sectors; hikes do the reverse.
What your money actually grows by after inflation (and tax) are subtracted from the headline interest rate. A 7% FD taxed at 30% with 4% inflation leaves a real return near zero — the number that decides whether savings gain or lose purchasing power.
The market's mood. 'Risk-on' means investors chase returns — equities and emerging markets rally. 'Risk-off' means they flee to safety — bonds, gold, and the dollar gain while stocks and the rupee fall. A geopolitical shock flips the switch to risk-off.
An asset money rushes into when fear rises — classically gold, the US dollar, and US Treasuries. Rising safe-haven prices are a tell that investors are turning risk-off, which usually pressures Indian equities and the rupee.
The Securities and Exchange Board of India, the market regulator. It oversees exchanges, IPOs, mutual funds, and advisers, and protects retail investors.
Investing a fixed amount at regular intervals (usually monthly) into a mutual fund. Averages your buy price over time and builds discipline; the default for most retail investors.
The share of deposits banks must hold in safe, liquid assets like government bonds. It ensures solvency and creates captive demand for government debt.
Dividing each share into several (e.g. 1:5), lowering the price and raising the share count while total value stays the same. Improves affordability and liquidity, not value.
The narrow shipping lane between the Persian Gulf and the open sea through which a large share of the world's seaborne oil — including much of India's crude — passes. A threat to close it is one of the fastest ways to spike global oil prices.
The 2013 market shock when a hint that the US Federal Reserve would slow its bond-buying sent capital fleeing emerging markets. India, with a wide current-account deficit, saw the rupee crash toward ₹68 — a lasting lesson that a shift in US policy alone can be the shock.
Studying price charts, volume, and patterns to forecast short-term moves, rather than a company's fundamentals. Popular with traders; debated for long-term investing.
When a country imports more goods than it exports, in value. India runs a persistent goods trade deficit, driven largely by crude oil, gold, and electronics imports — it's a key driver of the current account deficit and pressure on the rupee.
The price at which a stock hits its daily maximum up-move (upper) or down-move (lower) and trading pauses. Common in illiquid small-caps around big news.
A plot of government-bond yields against how long until they mature. Normally it slopes up — longer money costs more. Its shape signals where the market expects rates and growth to go.