What is Share Market? Complete Guide with History, Working & Benefits

Introduction: What is Share Market?

The Share Market is one of the most popular investment platforms in the world. It allows investors to buy and sell shares of companies to create wealth.

But do you know What is Share Market, how it works, and what factors affect the share prices daily?

In this blog, we will cover everything in detail.

History of Share Market

Global History:

The concept of the share market started in 1602 with the Amsterdam Stock Exchange.
It was the world’s first official stock exchange.

History of Share Market in India:

Bombay Stock Exchange (BSE) was established in 1875 — the first stock exchange in Asia.
National Stock Exchange (NSE) started in 1992 with an electronic trading system.

How Does Share Market Work?

The Share Market operates in two segments:

1. Primary Market:

Where companies issue new shares through IPO (Initial Public Offering).

2. Secondary Market:

Where existing shares are bought and sold by investors.

Benefits of Share Market Investment

High Returns in Long-Term
Passive Income through Dividends
Ownership in Big Companies
Beat Inflation
Portfolio Diversification

Risks in Share Market Investment

Market Volatility
Loss due to Wrong Decision
Global Economic Conditions
Lack of Proper Knowledge
Price Fluctuation

How to Invest in Share Market?

Step-By-Step Process:

Open a Demat and Trading Account (With brokers like Zerodha, Upstox).
Complete your KYC process.
Study the Stock Market basics.
Start Investing with small amounts.
Focus on fundamentally strong companies.
Invest for the long term.
Keep patience and avoid panic selling.

Factors That Affect the Share Market

The Share Market is influenced by many external and internal factors. Let’s understand them in detail.

1. Economic Conditions

GDP Growth Rate
Inflation Rate
Interest Rates
Unemployment Rate

A strong economy boosts investor confidence, while a weak economy brings the market down.

2. Government Policies

Taxation Policy
Budget Announcements
Foreign Investment Policy (FDI)
Industry-Specific Regulations

Changes in policies directly affect specific sectors.

3. Global Events

International Wars or Conflicts
Oil Price Fluctuations
Global Market Trends (USA, Europe, Asia Markets)
Foreign Exchange Rate

Indian Share Market is sensitive to global events.

4. Company Performance

Quarterly Results
Profit or Loss Report
New Product Launch
Management Changes

Company-specific news directly affects the stock price.

5. Political Stability

A stable government provides positive market sentiment, whereas political uncertainty creates fear in the market.

6. Investor Sentiment

Positive News Increases Buying
Negative News Creates Panic Selling
Media Influence on Stock Market Trends

Conclusion

Now you have a complete understanding of What is Share Market, its history, working, benefits, risks, and the various factors that impact the Share Market.

Investment in the stock market is a smart way to build wealth, but it requires knowledge, patience, and research.

Stay updated with market trends, invest wisely, and create your path to financial freedom.