The NSE and BSE are not the same stock exchanges as you would imagine.
You hear about the NSE, BSE, and the stock market almost every day. If you want to invest in the stock market, you should understand the differences between the NSE and the BSE. Despite their many commonalities, NSE and BSE differ in a number of ways.
What is NSE?
- What is NSE?
- What is BSE?
- What is the difference between NSE and BSE?
- NSE vs BSE: key differences
- NSE or BSE: Which is Better?
- Final Thoughts
- Frequently Asked Questions
The National Stock Exchange is abbreviated as NSE. The NSE (National Stock Exchange) was founded in 1992 by banks and financial organizations such as ICICI Bank, Industrial Financing Corporation of India, IL&FS, Punjab National Bank, and General Insurance Corporation. Mumbai is the location.
SEBI recognized The National India’s Stock Market Ltd. as a stock exchange in 1993. In the next year, it operationalized its functions. The declared vision of NSE is “to facilitate the financial well-being of people”, “to continue to be a leader”, and “establish global presence”.
The NSE is India’s second-largest stock exchange by market capitalization. The products available for trading on the NSE are divided into three categories:
- Equities are listed and traded on a capital market.
- Bonds and fixed-income securities
- derivatives market
S&P CNX-50 and S&P CNX-500 are the 50-share and 500-share indexes on the NSE, respectively. In terms of trading volume, the NSE has grown to become India’s largest financial exchange and the fourth largest in the world.
Nifty 50 is the benchmark and flagship index of the National Stock Exchange, which was created in 1996. The equities of the top 50 companies listed on the exchange are known as the Nifty 50. These 50 largest corporations’ equities provide a decent representation of the Indian economy’s diverse sectors.
What do you think?
The NSE was India’s first stock exchange to provide investors a contemporary, fully automated electronic trading platform.
It is also frequently used by investors to gain insight into the Indian stock market. Among the biggest stock exchanges in the world, NSE is at the 4th position (based on equity trading volume). NSE was declared in 2019 as the world’s largest derivatives exchange by WFE (World Federation of Exchanges).
What is BSE?
The BSE (Bombay Stock Exchange) is India’s and Asia’s oldest stock market. It first opened its doors in 1875. Once, the Bombay Stock Exchange Ltd. was a regional stock market. In the year 2002, it was transformed into a national stock exchange.
Although both the BSE and the NSE provide trading platforms, the BSE is India’s largest stock exchange by market capitalization. It’s also the world’s sixth largest stock exchange by market capitalisation.
Debt instruments, derivatives, mutual funds, stocks, and currencies are all available for trade on the BSE. BSE has added the BSE SME platform for Small and Medium Businesses (SME), which has successfully listed over 250 companies.
S&P BSE SENSEX, or simply SENSEX, is an index of BSE and is India’s most widely followed stock market benchmark index. It assesses the performance of the 30 largest companies listed and traded on the BSE.
BSE also launched India’s first international exchange, India INX, which is located in GIFT CITY IFSC in Ahmedabad.
BSE’s history is impressive, and it embodies the history of India’s stock market. The Bombay Stock Exchange was the first stock exchange in the country to receive permanent recognition under the Securities Contract Regulation Act of 1956.
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Almost 75% of all equities traded in India are traded on the BSE. BSE was founded under a banyan tree and became India’s first listed stock exchange in 2017.
What is the difference between NSE and BSE?
Both the NSE and the BSE are real market indicators that are utilized by investors all over the world to gain insight into the Indian economy. There are, however, numerous distinctions between the two.
The following points summarize the major distinctions between NSE and BSE:
- The BSE is India’s oldest stock market, while the NSE is the country’s newest.
- In the Global rankings of stock exchanges, BSE is at the 10th rank while NSE is at the 11th rank.
- The Nifty 50 index tracks the top 50 firms listed on the NSE, while the Sensex index tracks the top 30 companies trading on the BSE.
- SEBI recognized NSE as a stock exchange in 1993, while BSE was recognized in 1957 (prior to the establishment of SEBI).
- NSE was the first fully automated screen-based and dematerialized electronic exchange of India whereas BSE has been in the stock market business since the second half of the 19th century.
NSE vs BSE: key differences
|Established||1992||9 July 1875|
|Total Listed Companies||1700+||5749+|
|Liquidity||NSE has more liquidity than BSE||Lower than NSE|
|Market Capitalization||$3.1 trillion||$3.2 trillion|
|Speed||Behind BSE||Fastest in the World|
|Trading||Stocks, IDRs, ETFs and units of closed-ended mutual fund schemes, derivative contracts on Equity, Indices, Currency, Interest Rates and Commodities, Government securities, Corporate Bonds, Sovereign Gold Bonds, and other debt securities||Debt instruments, derivatives, mutual funds, equity, and currencies|
NSE or BSE: Which is Better?
Both stock exchanges feature cutting-edge infrastructure that allows them to trade and deal in equities using cutting-edge technology. They are the financial market’s backbone in India. Both the NSE and the BSE use similar trading systems. To trade on exchanges, you must be a registered broker.
If the question arises, Which is better NSE or BSE?, the answer is that it is a personal decision that is based on the firm in which an investor want to invest. If someone wants to invest in Company X, which is solely listed on the BSE, he has no other options.
Similarly, if a stock is only listed on the NSE and an investor wishes to invest in it, he must do so exclusively through the NSE platform.
According to some analysts, the BSE is better for new investors or novices, whereas the NSE is better for seasoned and experienced investors.
The decision is between NSE and BSE. The major goal of exchanges like the NSE and BSE is to make it easier for investors to invest in Indian equities of publicly traded firms by providing trading facilities.
A stock market is a regulated marketplace where people can purchase and sell shares in publicly traded corporations. The Bombay Stock Exchange and the National Stock Exchange are India’s two most important stock exchanges. Despite the BSE is India’s oldest stock exchange, the NSE has grown into a significant player.
Finally, both the NSE and the BSE are secure and controlled by the government watchdog Securities and Exchange Board of India.
Frequently Asked Questions
How to invest in NSE or BSE?
You must first register an online trading and Demat account before trading on the NSE or BSE. You’ll also need to work with a SEBI-registered broker. You must then transfer monies from your bank account to your Demat account in order to invest in stocks.
How does a company get listed on NSE or BSE platforms?
If a firm wishes to list on the NSE or BSE and plans to launch an Initial Public Offering (IPO), it will be eligible to be included in the indexes if it meets the eligibility criteria. Market capitalization, impact cost, and floating stock, among other things, are among the eligibility criteria.
What is the role of SEBI in NSE and BSE?
SEBI, or the Securities and Exchange Board of India, is India’s securities and commodity market regulator. As a result, SEBI regulates the NSE and BSE.
How many companies are listed on NSE and BSE?
There are currently 5749 NSE listed firms and around 1700 BSE listed companies.