HELLO READERS,
Hope you all
are doing great. Here, I covered a really important topic from knowledge point
of view and it’s about the Stock Exchanges.
Stock
Exchanges are playing very crucial part in an investors life as well as in the
Indian Financial System. So, let us understand what the stock exchanges are.
STOCK EXCHANGE
Stock
Exchange is a regulated market place where the financial securities like
shares, bonds, etc. are allowed to bought and sold. These financial securities
are to be listed on the stock exchanges for trading purpose.
Brokers and
Dealers are the regulated professionals who specialise in trading securities on
the stock exchanges. Basically, a broker helps the security holder to buy and
sell securities and receives commission (i.e. brokerage) for the services
rendered.
All the
stock exchanges are regulated and monitored by Stock and Exchange Board of
India (SEBI).
India has
two major stock exchanges-
1.National
Stock Exchange of India (NSE)
2.Bombay
Stock Exchange of India (BSE)
1. National Stock Exchange of India
(NSE)
NSE was
founded in the year 1992. It is the leading stock exchange in India. On this
exchange all types of securities can be traded through screen based electronic
trading system.
The screen
based electronic trading system refers to fully computerised trading system
that ensures transparency in the trading process. It offered easy trading
facility to the investors spread across the country.
The current
Market Capitalisation of NSE is US$2.27 trillion (as on April 2018). And the
total 1,952 companies are listing on NSE.
2. Bombay Stock Exchange of India
(BSE)
BSE was
established in the year 1875. It is the Asia’s first stock exchange and one of
the world’s fastest stock exchanges. Also, BSE is the 10th Biggest
stock exchange in the world. The screen based electronic trading system is
there in BSE as well as in NSE formation which made the equity market more
efficient.
The current
Market Capitalisation of BSE Listed Companies is Rs. 1,47,160.51 billion
(US$2.2 trillion-as on April 2018). And total 5,439 companies are publicly
traded on BSE.
In addition
to these exchanges, the Over the counter Exchange of India (OCTEI) was
established in the year 1990 with the aim to help small and medium enterprises
raise capital for business expansion.
Market Indexes
An index (or
indices) can be defined as a statistical indicator of change in a securities
market. It can be considered as a measure for a particular market.
A stock
market index (or stock index) is basically a measurement which shows the price
movements of shares. Generally, people have tracked the market’s daily ups and
down using various indexes of the overall market performance.
Considering
stock exchanges in mind, India has the two best known indexes:
1.SENSEX
Sensex is
the stock market index for BSE. It is made of 30 stocks representing a sample
of large, liquid and representative companies. The base year of SENSEX is
1978-79 and the base value is 100.
2.NIFTY
NIFTY is the
stock market index for NSE. It represents the weighted average of 50 Indian
company stocks in 12 sectors and is one of the two main stock indices used in
India. The base year of NIFTY is 1995 and the base value was set at 1000.
There are
other indices also, like BSE 500, BSE FMCG, BSE IT, BSE PHARMA, BSE METAL, etc.
Thank you
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