What is Share Market?
The share market, also known as the stock market, is a marketplace where individuals and institutions buy and sell shares of publicly traded companies. When you buy a share, you're purchasing a small ownership stake in that company. The share market serves as a platform for companies to raise capital by offering shares to the public through initial public offerings (IPOs) and for investors to earn returns on their investments through price appreciation or dividends.
There are two main types of markets in the share market:
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Primary Market: This is where new shares are issued by companies to the public for the first time, usually through an IPO. The capital raised helps the company expand its operations or fund other business activities.
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Secondary Market: After shares are initially sold in the primary market, they are traded among investors in the secondary market. This is where most of the buying and selling takes place, and prices fluctuate based on demand and supply.
The share market is influenced by various factors, including economic data, company performance, global events, and investor sentiment. It offers opportunities for wealth creation but also carries risks due to the potential for losses when stock prices fall.
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