The stock market refers to the buying and selling stocks, which are shares of equity ownership in companies. Stocks can be purchased from a company at an initial public offering or on the secondary market through exchanges.
A stock market combines primary, secondary, and OTC markets. Each market plays an essential role in the overall functioning of a stock market. For example, NSE, BSE, and NYSE are stock exchanges, whereas NASDAQ is an OCT market.
When people refer to the stock market going up or down, they generally refer to whether an index has gone up or down. This is because the index tracks a particular portfolio of stocks. The most commonly used indices are the NSE 50, Bank Nifty, and BSE SENSEX in India. In addition, some major global indices are S&P 500, NASDAQ, and the Dow Jones Industrial Average. Investors use these indices to compare an investment’s expected success or failure.