What is share market?

What is share market?

A share market, also known as a stock market or equity market, is a marketplace where shares of publicly traded companies are bought and sold. In a share market, investors buy shares of companies with the expectation of earning a return on their investment through dividends or capital gains.

Publicly traded companies issue shares to raise capital, which can be used to fund growth initiatives, research and development, or to pay down debt. These shares are then traded on a stock exchange, where investors can buy or sell shares based on their assessment of the company’s prospects.

The two primary types of share markets are primary markets and secondary markets. In a primary market, companies issue shares to the public through an initial public offering (IPO). The shares are then sold to investors, and the proceeds from the sale are used to fund the company’s growth initiatives. In a secondary market, shares of publicly traded companies are bought and sold between investors, and the company does not receive any of the proceeds from the transaction.

The share market plays an important role in the economy by providing a means for companies to raise capital, and by giving investors the opportunity to invest in companies and earn a return on their investment. However, investing in the share market can be risky, as share prices can be influenced by a wide range of factors, including company performance, economic conditions, and geopolitical events. As such, investors are advised to conduct thorough research and exercise caution when investing in the share market.