POLITICAL IMPLICATIONS:-
During the last elections, the political environment has affected the stocks a lot. As the government changed against the people’s expectations, the prices of the scripts went down steeply than expected.
NDA government was expected and instead Congress was the ruling one. When it wasn’t yet decided who will be the next prime minister, the markets went down to the lowest in the last 8 years. There was a drop of about 800 points on 17th May, the black Monday. The markets were closed after a 500 drop at 11:10 p.m. for two hours and were re-opened and closed again due to a constant fall in sensex. This affected the turnover highly and many investors especially those dealing with derivatives just decided to be out of this volatile and risky market.
Even, new investors who wanted to start investing or had just started investing were stepped back by this fall. Some of the local brokers had to stop their business or borrow from others.
Also, there was a very high lot size of 2, 50,000 shares of Reliance Industries Limited ready for sale in the market and transactions were executed every minute. Then, again when Mr. Manmohan Singh became the PM, markets gained. Right now, the markets are still volatile, suited more for intra-day trading than investments.
ECONOMIC IMPLICATIONS:-
The budgets affect the stock markets heavily. It has a relation to stock market as people’s income is connected to it. The tax brackets play an important part in this. If a person has high income and falls under the 30% tax bracket, he would not opt for online trading (as higher the profits, higher the tax he has to pay).
In such economic environment, people prefer to trade offline, wherein their profits remain un-booked as per their wish.
Online trading is being adapted by more and more people each day. Youngsters have started trading in large numbers too. The society as a whole is moving towards technology in this digital revolution age. Women in corporate world or housewives have started earning through this way of smart trading sitting at home or in their offices. Thus, in this changing technological scenario, e-trading clicks in people’s mind along with e-shopping, e-governance. Globalization has brought about a change in consumers who want ease and comfort in trading everywhere they move.
Again, it’s a different story during black Mondays or at the time of losses, when the income from the main business gets lost in the stock markets. These affect the society in the sense that people have given their lives loosing in stock markets. This is an adverse implication of stock market as a whole.
TECHNOLOGICAL IMPLICATIONS:-
As this is online trading, one has to be constantly in touch of the latest developments in the technological field. If the competitor has a better portal due to developments in software, then there is a chance of loosing market share. Recently, applet-based software is used which is enabled by Java to get the basic portal. Even, the speed of execution and internet connection used by the company affects the customers. Some online trading accounts demand a particular browser, so one has to be continuously upgraded with new technological developments in the market.
