how is the opening price of stocks in Indian stock market decided?

[durga duvvi]

[Yorky]

The relationship between the backlog of buy and sell orders decides the opening price of stocks in any fair stock exchange.

[Joe P]

While I do not have specific knowledge of the Indian stock market, I would assume it to be the same as the rest of the world markets. Limit orders to buy and to sell are paired, resulting in trades. Market orders are also matched with the best available bid or ask and trading begins. In most markets today, computers do the work. In over the counter markets, in some cases, the "specialist who trades the stock and "makes a market" offers stock at a particular price and offers to buy stock at a particular (lower) price and when there is a buyer or seller willing to meet his price, trading begins.

[Fundu Vishy]

Indian market follows the concept of Order matching, when it comes to price discovery, be it on the opening price or the price during the trading hours. This is as against the concept of 'Market Making' followed by many markets wherein there are market makers who are obligated to give buy and sell prices for the stocks.

In light of the above, the price of any stock in the Indian Market is decided by the demand and supply. Those who are participating in the market can put orders on two different price parameters both for buy or sell. One of th parameter being 'Limit Order' wherein the buyer or the seller provides the price at which he is ready to buy or sell the stock and the other being 'market price order' which is a open price wherein the buyer or seller is ready to buy / sell at any price decided by the market.

Depending on the type of orders and the price at which the order has been place, the price of the stock gets identified.

To sum up, the price is identified by the demand and supply for a stock and the price at which the stock changes hands.

--
Fundu Vishy - Your 'Mutual' Friend
Follow me on twitter @funduvishy
I blog @ http://blog.powermf.com

[cool guy]

Hi,
Honestly if we say SGX Nifty decides the opening level of Nifty then we are wrong. As there are lot many factors which comes into play. Combination of lot many parameters like SGX Nifty, Settlement level, Buyers and sellers, previous day closing, global trend etc decides the market trend.

Be it anything all stocks and market follow technical levels so you can rely on them.

[ashok a]

For the opening prices usually people rely on the extended hour trading situation which usually takes place after close of the stock exchange,privately.But that is not always holding good.All it depends on the economical environment as well as the company's performance.
Alway the opening prices are not reliable when big players are shaking the market to their advantage.You should wait till the market get settled into specific trend.