A financial system is combination of financial market, financial institutions (Banks), financial regulatory bodies (like RBI, World Bank etc) and their financial policies, financial players (common investors) and government bodies and their policies.

Financial markets is a part of financial system it’s  like any  other market where buying and selling of financial products like stocks, bonds , commodity, derivatives etc are  takes place.

So financial market mainly divided in to two sectors,

1) primary market    2) secondary market

Primary market is market for the company’s to rise capital from the public , here first time company goes for issuing shares to the public by          IPO( INTIAL PUBLIC OFFERING) here what companies will do is they divide their entire  capital structure in to number of portions (each portion is called  shares) and issue this shares  in to the potential buyers.

Whereas secondary market is market for buying and selling of financial instruments, here what happens the investors commonly buy and purchase a financial instruments between one another in stock exchange like NSE, BSE or other stock exchanges, so movement of stocks index in BSE is commonly called SENSEX (sensitive index) it is index of a value-weighted index composed of 30 stock.

In a secondary market there are different segments like equity market (market for equity shares) commodity market (market for commodity like metals, agriculture product), derivative market (market for financial instruments like futures contracts or options, which are derived from other forms of assets), bullion market (market for precious metals like gold and silver) and finally forex market (market for different currencies).