In the Indian equity market, two major stock exchanges handle the majority of the trading volume. They are the Bombay Stock Exchange, often called BSE, and the National Stock Exchange, or NSE. Trading financial instruments like Exchange-traded funds (ETFs), derivatives, stocks, and bonds online is made possible through these exchanges. Acting as marketplaces, they facilitate the listing of securities and transactions between traders and investors, with vital support from brokers.
BSE and NSE, the leading market exchanges in India, also hold their place as prominent players in Asia. They trail just behind the market exchanges of China, Hong Kong, and Japan in terms of size and influence.
Whether you are an investor aiming for long-term growth or a trader seeking short-term gains, comprehending the nature and nuances of BSE and NSE is vital. These stock exchanges play pivotal roles in shaping India’s financial landscape and understanding their distinctive features equips you to make informed investment decisions.
What is NSE?
India’s top stock exchange, the National Stock Exchange (NSE), takes the lead with the largest market capitalization. It was established in 1992, earned recognition as a stock exchange in 1993, and made history by introducing the country’s first fully automated electronic trading system, bidding farewell to the era of paper-based trading.
The stock market underwent a significant transformation when it transitioned from paper-based trading to electronic methods. The use of physical share certificates was no longer necessary, resulting in a more user-friendly process.
At the core of NSE stands NIFTY, also known as the National Fifty. Launched in the mid-’90s, NIFTY comprises fifty of the most actively traded companies by market capitalization on the National Stock Exchange. These fifty companies represent a cross-section of India’s diverse economy, handpicked from a pool of over sixteen hundred listed stocks.
Beyond its market capitalization, NSE shines in the derivatives segment, proudly holding the title of the world’s largest exchange in terms of contract volume. For the past twenty years, NSE has been consistently acknowledged as a leading source of indices, cementing its status as a global financial force.
What is BSE?
The Bombay Stock Exchange, which dates back to 1875, originally bore the name “The Native Share and Stock Brokers Association.” As Asia’s oldest stock exchange, it predates the NSE. Like the NSE, the BSE boasts its benchmark index called SENSEX, introduced in 1986. SENSEX represents the weighted average value determined from the top thirty companies listed on the exchange. Interestingly, SENSEX enjoys an international trading presence, with listings on prominent exchanges in China, Brazil, Russia, South Africa, and Eurex.
In 1986, the introduction of Sensex marked a significant milestone, becoming the first equity index. Its purpose was to identify the top 30 trading companies across more than 10 sectors. Alongside Sensex, BSE offers several other critical indices, including BSE FMCG, BSE Auto, BSE SMLCAP, BSE Pharma, BSE 500, BSE MIDCAP, BSE Metal, BSE PSU, BSE 100 and BSE 200
The Bombay Stock Exchange houses various subsidiaries. Notably, the BSE SME platform stands as India’s largest, featuring over 250 listed companies. Furthermore, BSE Star MF, India’s largest mutual fund platform, witnesses over 2.7 million transactions and over 2 lakh new SIPs monthly. BSE Bond also maintains a prominent position in the bond market. BSE’s headquarters are located on Dalal Street in Mumbai. My Money Panda uses BSE Star MF to get Mutual fund transactions done for its clients.
It ranks among the top 10 most valued global exchanges and notably, BSE itself conducted an IPO and is listed on the NSE. BSE’s diverse product offerings encompass equities, equity derivatives, commodities, and currency derivatives.
Get Personalized SIPs with MyMoneyPanda
Difference Between BSE and NSE
Within India’s active stock market landscape, the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE) stand out as significant pillars, each with its distinct qualities. As we venture into their distinctions, it’s apparent that while both exchanges hold crucial roles in the nation’s financial framework. They do so with individual traits that impact trading, market capitalization, and availability. We’ll now delve into the contrasting features of NSE and BSE.
| National Stock Exchange (NSE) | Bombay Stock Exchange (BSE) |
| Benchmark Index | Benchmark Index |
| NIFTY 50 | SENSEX |
| Index consists of | Index consists of |
| Top 50 market capitalization companies | Top 30 market capitalization companies |
| Listed Firms | Listed Firms |
| 1,790 listed firms | 7,400 listed corporations |
| Market Capitalization | Market Capitalization |
| A total value of 2.27 Trillion | A combined worth of 2.1 Trillion |
| SME Platform | SME Platform |
| Operates NSE Emerge | Manages BSE SME |
| Traded Products | Traded Products |
| Corporate Bonds, ETFs, IPOs, SLB Schemes, Offer for Sale, Equities, MFs, Currency Derivatives, Institutional Placement Program | Currency Derivatives, Equities, MFs, Corporate Bonds, Offer for Sale, IPOs, ETFs |
| Global Rank | Global Rank |
| Ranked 11th worldwide | Holds the 10th global position |
| Network (Trading Terminals) | Network (Trading Terminals) |
| Spans over 1,500 cities | Covers 419 cities nationwide |
| Website | Website |
| www.nseindia.com | www.bseindia.com |
| Founded In | Founded in |
| 1992 | 1875 |
Read Our Blog on-Structure Of Mutual Funds
Frequently Asked Questions
1. NSE and BSE, which is better?
Choosing between NSE and BSE depends on your specific investment goals. NSE is known for high liquidity and is often preferred by traders, while BSE is recognized for its diverse listing of companies. Figuring out which one is a better fitment, requires matching your investment strategy with your personal goals.
2. Why is there a difference in price between NSE and BSE?
Price differences between NSE and BSE can occur due to various factors. These disparities may result from variations in supply and demand, trading volumes, and market sentiment on each exchange. Additionally, differences in trading mechanisms and timings can contribute to variations in prices.
3. Who owns BSE and NSE?
BSE, or the Bombay Stock Exchange, is owned by BSE Limited, a public company. NSE, or the National Stock Exchange, is owned by a consortium of financial institutions, with no single entity holding a majority stake. Both exchanges operate independently with regulatory oversight.
4. Who are the main indices of BSE and NSE?
The main indices of BSE include SENSEX (Sensitive Index), BSE 100, BSE 200, BSE 500, and others, covering various sectors and market segments. On the other hand, the NSE features the NIFTY 50 as its primary index, along with sectoral indices like NIFTY Bank, NIFTY IT, and more. The main role of these indices is to give us a way to measure how stocks are faring on their respective exchanges.
Leave a Reply