How the Stock Market Works
BSE, NSE, what you're actually buying — and why prices move.
What is a stock?
When a company needs money to grow, it can sell small pieces of ownership to the public. Each piece is called a share or stock. When you buy one share of Reliance Industries, you own a tiny fraction of that company.
If the company does well — profits go up, it expands — the value of your share rises. If it struggles, the share price falls. It's that simple at the core.
Where does trading happen?
India has two main stock exchanges:
- NSE (National Stock Exchange) — handles ~90% of equity and almost all F&O volume.
- BSE (Bombay Stock Exchange) — the older exchange; listed on it too, but most trading happens on NSE.
You don't go to the exchange directly. You use a broker (Zerodha, Groww, Upstox, etc.) who connects you to the exchange electronically.
How a trade flows — from company to you
What moves the price?
What drives that demand? A mix of things:
- Company results — profits, revenue, guidance
- Economy — RBI rate decisions, GDP data, inflation
- Global events — US Fed, oil prices, geopolitical news
- Investor sentiment — fear and greed cycles
A historical example
In early February 2021, Tata Motors reported strong quarterly results, driven by its JLR (Jaguar Land Rover) division. The share price rose ~15% in a few days — not because anything about the physical cars changed overnight, but because investors updated their view of future profits and wanted to own more of the company.
This is how markets work: price = what investors collectively believe the future is worth, updated every second.
Key market timings (NSE/BSE)
| Session | Time (IST) | What happens |
|---|---|---|
| Pre-open | 09:00 – 09:15 | Orders collected, opening price discovered |
| Regular market | 09:15 – 15:30 | Live trading, prices update second by second |
| Closing session | 15:30 – 15:40 | Closing price calculated (weighted average) |
| After-hours | Closed | Orders can be placed for next day |
- A share = fractional ownership of a company.
- Trading happens on NSE and BSE via a broker.
- Prices move because of supply and demand — driven by news, results, and sentiment.
- Market hours are 09:15–15:30 IST on weekdays (except holidays).