Effect of Inflation on Stock markets

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Inflation, as we all know is biggest enemy of investors as well as common man. Inflation has basically has same effect in stock markets as it has in normal day to day life. Actually Inflation and Indian stock markets work hand in hand. If we see definition of inflation : "sharp and persistent rise in prices of commodities every year"

Here are effects of Inflation on stock markets:

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Indian Stock Markets | SENSEX | NIFTY closes in red

All the major Indian stock indices remained in red throughout the trading day and finally closed in red to because of global cues and China, Metals and Auto companies stock were hit the most during intraday trading. Market breadth was negative on the BSE with 743 declines against 559 advances.

The 30 share benchmark index Sensex closed at 17503.33, down by 197.57 points compared to previous close. National Stock Exchange’s Nifty also followed and closed at 5249.20, down by over 63.30 points.

BSE Midcap Index was down 0.44 per cent and BSE Smallcap Index was up 0.10 per cent.

Amongst the sectoral indices, BSE Metal Index was down 1.71 per cent, BSE Realty Index fell 1.40 per cent and BSE Auto Index slipped 1.37 per cent.

Stock Markets Investing best books

For beginners of Stock markets investing you can follow this book as it is very simple to understand and implement and save you money which you will give to your agent as commision

New to Indian Markets - Stock Trading tips for you

i was just checking out the percentage of new investors success rate in indian stock markets. There is no doubt that if you invest in proper stock without spending more then your capacity you can make double of your investment in few months or justin few trading sessions, but the important thing about investing in indian stock markets (i am talking about BSE and NSE only , regional stock exchange might be good for very small investors, i'll not talk about investing in or rather talking about investment techniques in smaller regional exchanges, so this post is to give a startup guidance to people who want to invest in stocks and that to in Bombay Stock Exchange or National Stock Exchange.

So before giving straightaway stock investing tips i would want you to first know about what a Stock market really stands for and how Stock Markets work , in one of my previou posts i wrote in detail about how the stock markets work you should first start by reading this so that some background of stock markets is clear to you before you land into investing phase.

If you actually know about the working details of Stock Markets then i will like to continue with the stock market investing tips straight away.

before starting beware that there are lots of website (some fake too) which promise free stock investing tips so beware of such sites these sites misguide starters and might ask for some money which ultimately helps the starter to go nowhere, i would like to recommend discussion forums like traderji so starting with the tips for investing in Stock markets particularly those in India like BSE and NSE. there are few evergreen stock market investing rules which have very high success rate. You can read these simple but effective rules for Stock market investing Simple investing rules. If you have completed with reading these stock investing rules then i'll like to move forward with the stock trading tips.

I hope that when you reach here your stock market basics might be clear, so i start with more stock investing tips for indian markets.

Due to globalization and opening of Indian economy the trends across various stock markets of world including the US 30 share index Dow Jones Industrials should be analyzed closely and then you should start with the indian markets as we all know that Indian Stock markets are much more volatile then any other stock markets of world. other thing to watch is how the indian rupee is placed against US$ and what is the BSE SENSEX reading at that time you can analyse this by taking a look at closing rates of BSE SENSEX and NIFTY for last year and half on my blog itself. There are two types of stocks. Preferred stocks and common stocks. Preferred stocks have slightly more risk and common stocks are the riskiest of all.

For Investing in stock markets thers are few do`s and don`t which you should strictly follow because it`s your hard earned money!

Dont's of Stock market investments :

1. You should not panic - Indian Stock Markets are very volatile and keeps on fluctuating without any real logic behind , this is just due to profit booking by short term investors, but you should not panic after investing in fundamentally strong companies.

2. You should not get greedy - greediness leads to hell is very true in stock market investments and in no case what so ever you should invest beyond you budget or capacity.

3. you should choose fundamentally strong stocks - this was also the basic principle which world's top investor Warren Bufett used (i got this after reading "The Warren Buffett way" it's real nice thing to read read warren buffett way of investing

4. recently government levied some transaction tax on shares and pay your brokers fees :)

Once you understand these four dont's then you might become world's best investor who knows!!
happy trading

i'll be back with new article soon.. do post comments/suggestions or mistakes you find in this post i'll love to correct them...