What Is NSE, BSE Meaning | Difference Between NSE and BSE in Share Market | What Is NSE, BSE Full Form
Although everyone is aware that both the NSE BSE are tied to assets such as stock shares and bonds, what is the precise definition of a stock exchange? Let’s have a look at this article.
Table of Contents
About NSE
The National Stock Exchange (NSE) is India’s largest stock exchange in terms of market capitalization. It was founded in 1992, granted stock exchange status in 1993, and began operations in 1994. By introducing electronic or screen-based trading in India, it transformed the trading business.
NSE launched Nifty 50, the company’s benchmark index, in the years 1995–96. Out of the more than 1600 stocks registered on the NSE, the Nifty 50 tracks the top 50 largest and most liquid stocks. The Indian economy is represented by these 50 largest corporations, which represent various industrial sectors.
Following the Nifty 50 will provide you with a clear picture of India’s stock market and economic trends as a whole.
The National Stock Exchange has reached numerous milestones over the last 20 years, and has recently received the following awards:
- World’s Largest Derivative Exchange in terms of contracts traded.
- ETF Index Provider of the year.
- Index provider of the year.
About BSE
The Bombay Stock Exchange (BSE) was established in 1875 and is Asia’s first stock exchange. BSE has come a long way in 140 years and now offers trading in financial instruments such as stocks, currencies, debt securities, derivatives, and mutual funds. BSE has several subsidiaries, including BSE SME, India’s largest SME Platform, which has over 250 companies listed. With over 2.7 million transactions and over 2 lakh new SIPs every month, BSE StAR MF is India’s largest mutual fund platform. In the financial year 2017–2018, BSE Bond was the market leader in the bond market, raising 2.09 lakh crores from 530 issuances.
BSE’s benchmark index, the Sensex, is also known as the Sensitive Index. It follows the performance of 30 significant, well-established corporations from various industries, which represent the Indian economy and stock market as a whole. The Sensex is traded on Eurex and a number of other major exchanges in Brazil, China, Russia, and South Africa.
How can we differentiate between BSE and NSE?
The National Stock Exchange (NSE) and the Bombay Stock Exchange(BSE) are the two primary stock exchange markets in India.
The ‘Bombay Stock Exchange’ is abbreviated as BSE. The Bombay Stock Exchange (BSE) was established in 1875 and is India’s earliest and largest stock exchange. It was previously known as the ‘Native Share and Stock Brokers Association’. However, under the Securities Contract Regulation Act, 1956, the Government of India recognized this stock market as India’s principal stock exchange after 1957.
The ‘National Stock Exchange’ is abbreviated as NSE. Founded in 1972, somewhat later than BSE, and offers a similar country-wide stock market to BSE. While the BSE is the older of the two, the NSE is the larger of the two, with a higher number of daily deals and a higher turnover rate.
In 1986, SENSEX was launched as India’s first stock index, providing an identifying base for the top 30 exchange trading businesses. BSE online trading (BOLT) was developed in 1995, with a capacity of 8 million transactions per day at the time.
Difference Between NSE and BSE
| BSE | NSE | |
| Full-Form | BSE Full-Form – Bombay Stock Exchange | NSE Full-Form – National Stock Exchange |
| Incorporation | BSE was established in 1875 | NSE was established in 1992 |
| Headquarters | BSE is also located in Mumbai. | NSE is located in Mumbai. |
| Benchmark Index | SENSEX | NIFTY 50 |
| Companies listed | 5749 companies are listed on BSE. | 1696 companies are listed on NSE. |
| Products | 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 | 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 |
| SME Platform | BSE SME | NSE Emerge |
| Market Capitalization | 2.1 Trillion | 2.27 Trillion |
| Global Rank | 10th | 11th |
| Liquidity | Low Liquidity | High Liquidity |
| Index Value (as of 23rd November 2020) | 43,834 | 12,848 |
| Website | www.bseindia.com | www.nseindia.com |
FAQ’s
Yes, you can buy and sell intraday and deliverable shares on the NSE and BSE. Arbitrage trading is the term for it.
Yes, the prices of the identical stock on the NSE and BSE differ slightly. For example, if XYZ stock is trading at 50 on the NSE, it may be trading at 49.5 on the BSE, depending on the stock’s liquidity. The price gap between illiquid and liquid equities may be greater.
Both the BSE and the NSE are appropriate for beginners, but which is preferable depends on the type of investor the novice is. If you’re a beginner looking to trade on an intraday basis, the NSE is the way to go because it has more volume and liquidity.
If you are a seasoned investor, the BSE would be a good fit for you because it has low daily volume and excellent liquidity.
On the BSE, there are 5749 businesses listed, while the NSE has 1696.
If you are an intraday trader or wish to trade derivatives, you should invest through the NSE (futures and options). If you’re a seasoned investor who buys today and sells in a month, year, or a decade, BSE is the way to go.
The formula for calculating the NSE (Index) is mentioned below:
Total free-float market capitalization / Base market capitalization x Base index value is the formula used to compute the BSE (Index).
Companies listed on the BSE or NSE by issuing shares through Initial Public Offerings (IPOs) on the respective exchanges.
Yes, a corporation can trade on both the BSE and the NSE. In fact, most large corporations are traded on both the BSE and the NSE.
The BSE and NSE both trade equities at the same time, from 9:15 a.m. to 3:30 p.m.
Because it introduced derivatives, such as futures and options, the NSE grew more popular than the BSE. By providing electronic or screen-based trading in India, the NSE transformed the trading business. Electronic trading increased the industry’s openness and, as a result, garnered investors’ trust.