A Guide to Stock Exchanges of India…!!
The stock market has allured the people from centuries. It’s one of the simplest and easiest ways to get rich, if you pick the rhythm of the market. But for an early investor, the stock market is like a puzzle. For some these are just tickers of prices going up and down. If your ticker goes up, you make some money and if it goes down, you lose. That’s the start and end of the story. But that’s not a stock market.
A stock market is basically a platform, where traders or investors come to trade in financial instruments like shares, bonds and derivatives. All the rules as well as regulations related to the stock market is controlled by the exchange. There are mainly two stock exchanges in India:
- NSE (National Stock Exchange)
- BSE (Bombay Stock Exchange)
NSE (National Stock Exchange)
NSE is the India’s largest stock exchange market in terms of total and average turnover of equity shares. It is incorporated in 1992 and located in Mumbai. It is the first exchange in the country to provide fully automated screen electronic based system. It has more than 1600 companies listed on the exchange. It’s currently 11th largest stock exchange in the world with a market capitalization of more than $1.4 trillion. The main objective of the NSE is to provide trading facilities all around the country. Apart from that it also introduced Nifty 50, the 50 base companies in which is extensively utilized as Indian capital market’s barometer by Indian investors.
BSE (Bombay Stock Exchange)
BSE is the India oldest stock exchange was established in 1875. Previously, it was popularly known as “The Native share and stock broker association “. However, After Securities Contract Regulation of 1956, the Government of India recognizes BSE as a premier stock exchange of India. It is the world’s 10th largest stock exchange in India with having a market cap of $2.2 trillion. There are more than 5000 companies listed on the Bombay stock exchange. It has a record of only stock exchange with having highest number of listed companies in the world. These are very large, financially sound and well establishing companies from the main sectors. It provides a unique and excellent platform for trading in equities, debt, currencies, debt instruments, mutual funds and derivatives.
But an investor always puzzles about the difference about the NSE and BSE. Let’s look at the difference between them.
- NSE is the youngest stock exchange while BSE is the oldest stock exchange.
- NSE has got 11 position in the world stock exchange list while BSE has got the 10th position in the list.
- NSE has got its own index of Nifty 50, which represent top 50 companies, while BSE has got its own index of Sensex, gives top 30 index.
- BSE becomes recognized stock in 1957, while NSE is recognized in 1993.
These two constitute an important pillar of the Indian Capital Market. Each day, thousands of trader trades on these stock exchanges under the guidance of SEBI. They both are situated in Mumbai, Maharashtra.
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