Chapters in Market Foundations
Chapter 1 of 6 · 5 min read
How the stock market works
What a share is, why companies list, and how NSE and BSE match buyers with sellers.
A share is a small slice of ownership in a company. Companies list on an exchange to raise money from the public; investors buy shares hoping the business grows and the price rises, and may also receive dividends.
India has two main exchanges: the National Stock Exchange (NSE) and the BSE (formerly Bombay Stock Exchange). Both run electronic order books that match buy and sell orders by price and time. SEBI regulates exchanges, brokers and listed companies.
Primary vs secondary market
In the primary market, a company sells new shares directly, for example through an IPO. In the secondary market, investors trade existing shares among themselves on the exchange. Daily price moves you see on screens come from the secondary market.
What moves a price
Prices move because more people want to buy than sell, or the reverse. Common triggers:
- Company results, guidance and corporate actions
- Sector news, regulation and government policy
- Interest rates, currency and commodity moves
- Large institutional buying or selling
- General sentiment and global cues
Key takeaways
- A share is fractional ownership; price is set by supply and demand.
- NSE and BSE are the two exchanges; SEBI is the regulator.
- Primary market raises new money; secondary market trades existing shares.
Put it into practice
Open the live page on Market Intelligence and see this concept on real data.
Keep learning
- Indices: Sensex, Nifty and what they track · Market Foundations
- What is an IPO and how does it work? · IPOs & Primary Market
Education only, not investment advice. Updated 2026-10-09.