Every country’s economy is dependent on its markets. This not limited to the fruit and vegetable markets, but also those that have trading of stocks and shares and foreign exchange.
What exactly is a market? A market is that region where trading occurs, implying where exchanges happen. In the ancient days the market was a place where barter exchanges happened. Then with the development of coins, all goods and objects were bought and sold for a price in the form of the coins.
Today, the India markets are organized. There is a definite system of operation. Wherein most situations the rates of object are fixed, in other areas bargaining or auctioning also does take place. Though not every market deals in cash payments, as the stock exchange and commodity exchanges deal in contracts, against which payments are made on pre-determined date.
India markets function at various levels, broadly divided as the retail and wholesale market. Apart from this there are the exchanges – stock and commodity – wherein, there is no real exchange of cash and tangible goods.
Major Indian Markets
India is largest democracy in the world with a developing economy. For long, India has been far behind in the economical race, amongst all nations. However, the trend has been changing with country progressing rapidly. This is primarily because from the traditional and unorganized markets, today the major Indian markets are shifting to becoming modern and organized.
This shift is enticing more and more nations to take India seriously. Superpowers can no longer take advantage of Indian markets, thinking that the traders are in hand-and-mouth existence and so can be exploited. Instead, an increasing number of associations are changing the face of the major Indian markets.
Examples of progress and development in the major Indian markets are the Stock exchanges across the nation that are inviting foreign investors to participate in the trading. This is possible because of the high-end networking happening. The commodity markets are another example. The forex market that has shifted into being an organized sector is inviting the trust of increasing number of people. Even the food markets with the departmental stores, food bazaars and marked market areas have shifted it from being an area of noise to buzzing cash counters.
The major Indian markets are surely changing the face of India on the economical map of the world.
What does market analysis comprise of? Basically it is studying the market scenario in terms of demand and supply of the product, which then causes a price fluctuation. The most important factor that determines pricing is the ratio of demand and supply. When the demand is more than the supply then the price is generally higher, as a deterrent to reduce the demand. On the other hand when the supply out does the demand then the price is usually lower to attract consumers.
Market analysis is a vital stage when launching a product. This is because when the researchers analyze the market movement and demand for a product they would be able to determine the approximate sales they could possibly make. Market analysis of prevalent goods in the same category help them find better ways to market their product, also providing something better to the consumer.
Market analysis in the stock market is of immense important. There are professionals known as chartists or analyst who study the movement trends of the various stocks and shares to know in which one, one can make an investment, and what kind of investment being – day-trading, short-term investing, medium-term investing or long-term investing.
The base work for any analyst is the market research one does. The market research helps one find out the demand-supply situation that is prevalent. This type of research helps one to find ways to increase sales, and therefore reap in more profits. It also helps companies improve their products.
There are certain companies that specialize in market research. They hire a team of professionals who prepare special inventories pertaining to the kind of research that needs to be conducted for the client. They also determine the target subjects, along with the number. They then send out a team of people to carry out interviews amongst the subjects. They then compile the data and present their findings to the client.
Apart from the private companies conducting market research, even the various Governmental departments carry out such research from time-to-time for various reasons.
Market research is considered one of the vital instruments to perk up a company’s profits, as well as a means to rectify mistakes. Before a dissatisfied market moves away from the product, opting for a competitor the company can pull up their socks keeping the market’s likes and dislikes.
India essentially being an agricultural based economy has a huge farmer market spread across the length and breadth of the nation. This market operates at various levels and has products to take care of every farmer’s needs. The farmer market not only trades the seeds and harvests, but also all tools and equipment required by farmers.
Some of the farmer markets are run by the local Government. This is of immense value as then products required for farming are usually available at a subsidized rate for the member farmers. In fact, the Government-run farmer market is a great boon for those in the agricultural sector, as the Government subsidizes all products required for farming, and assures returns for the harvest. They also provide various other benefits for the farmers.
The farmer market is also a meeting place for farmers from various areas. Here, the farmers gather to sell their harvest. They usually first barter with each other to take care of their domestic needs and then sell the rest in the open market.
The foods market operate largely at three levels being:
- The retail foods market
- The wholesale foods market
- The export-import foods market
Every city in India has all three types of foods markets.
The retail foods market combines of those areas earmarked in the city as market places for the local market. Some of these markets are large enough to cater to all consumer needs. The unorganized retail food markets consists of the open air ones where vendors sell their food stuff stock in baskets or on moveable carts. Another form of the retail foods market is the departmental stores or what are known as ‘food bazaars’.
The wholesale foods market comprises of those zones where manufacturers and bulk distributors sell their food stuff to the retails and others. Consumers can also make bulk purchases from such markets and avail of the wholesale prices. They just need to make the effort to travel the distance to these markets.
The export-import foods markets are the most organized of all the markets. Here the orders are also large, definitely not catering to the local needs. This market is meant for the international trade of food products.
If you are traveling abroad then you need to purchase the foreign currency. There are a number of touts that are available all over the place, carrying stacks of foreign currency. However, preferably one should avoid dealing with touts when it comes to foreign exchange. This is because you may, without realizing, come across a crook who gives you counterfeit currency notes in exchange for all that you have paid. Another factor is that if the currency is genuine the touts charge you a marked up exchange rate. This is known as black-marketing in the forex market.
The forex market is actually an organized sector of foreign currency exchange, or foreign currency buying. There are authorized forex dealers, who set up shop for those seeking foreign currency. They are registered with the Reserve Bank of India and sell foreign currencies at the actual rate announced officially.
Some dealers in the forex market may also charge an additional fee for their services. They also charge extra for the tax imposed on foreign exchange trades. The advantage of dealing with official forex dealers is that one is assured genuine currency at actual exchange rate. This is better than taking a risk with a forex tout.
The money market largely functions on the basis of what is known as the debt instrument, which is of varying types. In the ancient days whenever someone would borrow money from a moneylender there would be an agreement between the borrower and the lender. This agreement is known as the debt instrument.
As per the technical definition of money market: It is the market where short-term money requirements are met. And the instruments of the money market are classified as those with a maturity period ranging to any time span that is less than or equal to a year.
The largely traded instruments in the money market are:
- Commercial Papers – CP
- Certificates of Deposit – CD
- Treasury Bills – T-Bills
The key features of all money market instruments are:
- Can be easily liquidated
- Are easy to trade
- There is no tax deducted at source, as far as the interest is concerned
- Stock market The stock market is one place where one can buy and sell companies in a single day. No, not literally as owner; but in the form of the stocks and shares. Each share that one buys on the stock exchange makes them a part owner of that particular company. For instance a person buys 500 shares of xyz company, becomes a part owner of that company as long as he/she owns the shares. The purchase is validated by the issuing of what is known as share certificates.
As owner of the shares the person will earn profits on his investments, which is given in the form of dividends if the company has earned profits in that financial years. And as long as the individual owns the shares of the company he/she is entitled to the dividends.
Trading on the stock market is a matter of risk-taking. This is because when the going is good the company’s share value keeps increasing. On the other hand if things swing the other way and the rate falls below that at which the purchase was made then losses are incurred.
When the stock market in general faces an upward swing then it is known as a bullish market or market for the bulls, which implies the best time to buy in anticipation that the market will further rise to increase profits. On the other hand when the market is swinging downwards then it is known as a bearish market or market for the bears, which means it is the best time to sell in anticipation that market will further fall to curtail losses.