Before starting with the question of what is NSE and BSE, it is important to know what a stock exchange is.
To clarify what a stock exchange is, a stock exchange is a marketplace where the financial securities issued by the companies are bought or sold. So in short the securities which are issued by companies such as shares and bonds are traded on the stock exchanges which means they have been issued in the primary market.
You can watch the below video to know more about What is Stock Exchange and what is NSE and BSE.
What is NSE?
Coming off to the NSE now the question pops up what is NSE and the role of NSE In the stock exchange. So NSE which is known as the National Stock Exchange of India Limited is India’s largest financial market. The exchange was incorporated in 1992. The trading on the exchange began in the year 1994 with the introduction of the wholesale debt market and a cash market segment shortly thereafter.
- The National Stock Exchange of India Limited (NSE) is the largest financial market in India and also the fourth largest market by trading volume.
- It is the first exchange that introduced fully automated electronic trading.
- It is one of the largest private wide area networks in India.
- It is the first electronic limit order book to trade derivatives and ETFs.
Knowing more about the NSE (National Stock Exchange)
Knowing more about NSE, right now it deals in the transaction in the wholesale debt, equity, and derivative markets. It is also one of the most popular offerings in the NIFTY 50 Index, which tracks the largest assets in the Indian equity market. Also, the fun fact is NSE has been the first exchange in India that provided modern, fully automated electronic trading. This was set up by a group of Indian financial institutions that has the goal of bringing greater transparency to the Indian capital market.
Benefits of the NSE
The National Stock Exchange(NSE) is the initial marketplace for the company preparing to list on the major exchange. Also, the straight volume of trading activity and application is via the automated system that helps in the transparency of the work that is happening in trade matching and the settlement process.
This is also a boost as visibility in the market develops investor confidence. The technology known as Cutting edge has allowed orders to be more efficient. This helps to result in greater liquidity and accurate prices.
What is BSE
So another question arises is what is BSE (Bombay Stock Exchange), In short explaining, The Bombay Stock Exchange (BSE) is the first largest securities market in India which was bootstrapped in the year 1875 based in Mumbai, India. The BSE list encloses the 6000 companies and is also one of the largest exchanges in the world. It comes alongside the largest exchanges just like the New York Stock Exchange (NYSE), Nasdaq, London Stock Exchange Group, Japan Exchange Group, and Shanghai Stock Exchange.
Also, the BSE has helped in the development of India’s capital market which includes the retail debt market which played a major role in the development of the Indian corporate sector. Also, the BSE is Asia’s first inventory change that has blanketed the equities buying and selling platform for small-and-medium enterprises (SMEs). The change has additionally supplied different capital marketplace offerings such as clearing, settlement, and risk management.
- The exchange started as the Native Share and Stock Brokers’ Association, which was established in 1875. BSE, the Bombay Stock Exchange is known as Asia’s first exchange and the largest securities market in India.
- The BSE has performed a major function in growing India’s capital markets by presenting an effective platform for the Indian company sector to elevate funding capital.
- The exchange is known for the electronic trading system that provides fast and efficient trade execution.
- BSE allows the investors to invest in equities, currencies, debt instruments, derivatives, and mutual funds.
- BSE helps in providing important capital market trading services. This helps in risk management, clearing, settlement, and investor education.
Working for BSE Bombay Stock Exchange
In the year 1995, the exchange switched from an open- floor to an electronic trading system. There are dozens of digital exchanges withinside the US including the New York Stock Exchange (NYSE) and Nasdaq being the maximum broadly recognized.
Talking about today’s time, the electronic trading system has dominated the financial industry. This results in fewer errors, quicker execution, and higher performance than conventional open-outcry buying and selling systems. stocks, stock futures, stock options, index futures, index options, and weekly options are covered by the BSE.
The overall performance of the BSE is commonly measured through the SENSEX that’s a benchmark index of 30 of the BSE’s biggest and maximum actively traded shares covering 12 sectors.
The BSE (Bombay Stock Exchange) is established on Dalal Street in downtown Mumbai, India.
NSE and BSE Difference
Here is an overview of the difference between the two exchanges
|NSE Benchmark Index is NIFTY 50||BSE Benchmark index is Sensex.|
|It is an NSE emerged SME platform||It is a BSE emerged SME platform|
|The market capital is 2.27 trillion||The market capital is 2.1 trillion|
|High Liquidity||Low Liquidity|
|The Global ranking is 11th||The Global ranking is 10th|
|Established in 1992||Established in 1875|
|List of the Product offered 1. Equity 2. Equity, Currency, and Commodity Derivatives 3. Exchange-Traded Funds 4. Mutual Funds 5. Security Lending & Borrowing Scheme 6. Corporate Bonds 7. Initial Public Offering (IPO) 8. Institutional Placement Program (IPP) 9. Offer for Sale||List of Products Offered 1. Equity 2. Equity, Currency, and Commodity Derivatives 3. Exchange-Traded Funds 4. Mutual Funds 5. Corporate Bonds 6. Initial Public Offering (IPO) 7. Offer for Sale|
Which One is a Better Platform
NSE or BSE which is better is a question that arises. Talking about the fact that if you are a beginner in the share market and are looking to invest in shares, NSE (National Stock Exchange) and BSE (Bombay Stock Exchange) are two stock exchanges. NSE is the biggest stock exchange while BSE is the oldest one. So there are 4 parameters on which this can be judged: NSE or BSE which one is better.
1. Trading Volume: talking about the most important factor trading volume NSE has more trading volume. This means more buyers and sellers for stocks are available. On the other hand, the BSE has a lesser trading volume.
2. Liquidity: NSE obtains more liquidity than the BSE which makes it take one step forward. More liquidity means easier trading and there are more opportunities to convert stocks into money.
3. Stocks: Compared to NSE, BSE has a bigger list of company stocks. Also, the stock which is a part of NSE is a part of BSE. So BSE offers more options.
4. Derivative Contracts: last but not least the NSE Nifty and Bank Fifty are highly traded because the liquidity they hold is higher. This implies that the NSE has monopolized the derivative contract segment with Nifty.
How many companies are listed in NSE
Almost 2000 companies are listed on NSE. In the financial year, 2020 more than 7500 companies were registered.
How many companies are listed in BSE
Talking about the total number of companies listed in BSE is around 5400 and more. BSE has more companies registered with it than NSE.