Stock Exchanges: BSE & NSE

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 10^th 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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