When it comes to India's equities market, the two main stock exchanges account for the majority of the trading volume. One is the Bombay Stock Exchange (BSE), while the other is the National Stock Exchange (NSE). These are India's two main stock markets and among the largest in Asia after Japan, China, and Hong Kong.
Whether you are an investor or a trader, you must grasp what these stock exchanges are and the fundamental distinctions between BSE and NSE. In this essay, we will look at the differences between the NSE and the BSE.
What is NSE?
The National Stock Exchange (NSE) is India's largest stock exchange and the second-largest globally in equity share trades. Established in 1992, it was the first electronic exchange without member ownership. It began operations in 1994 in the wholesale debt market segment. The NSE has several indices, including the Nifty and Bank Nifty. The flagship index, the NIFTY 50, is widely used by investors to gauge Indian capital markets. With a total market capitalization of over $3.5T trillion, the NSE ranks as the 8th largest stock exchange globally. As of September 2023, it had 33.3 million active investors.
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What is BSE?
The Bombay Stock Exchange (BSE), established in 1875, is a prominent Indian stock exchange with a rich history of trading. It has evolved from an open-outcry system to electronic trading and is known for its iconic Phiroze Jeejeebhoy Towers. BSE has diversified its financial products and services, including bonds, derivatives, mutual funds, and ETFs. Its benchmark index is the SENSEX, which includes 30 of the largest and most actively traded stocks. As of November 9, 2023, BSE had a total market capitalisation of ₹3,20,76,062 crore with 4,812 companies, making it one of the most prominent stock exchanges in India and globally.
Difference Between NSE and BSE
Now that you've learned more about these two stock exchanges, here's some further information that explains the distinction between the BSE and the NSE.
| Comparison Aspect | Bombay Stock Exchange (BSE) | National Stock Exchange (NSE) |
| Introduction | Being the oldest stock exchange, BSE boasts a rich history. | NSE, a relatively younger stock exchange, is a pioneer in introducing a fully automated electronic trading system. |
| Year of Establishment | BSE was founded in 1875. | NSE was established in 1992. |
| Management | Mr Ashishkumar Chauhan, Managing Director and CEO. | Mr Vikram Limaye, Managing Director and CEO. |
| Key Index | BSE’s benchmark index is known as Sensex 30. | NSE’s benchmark index is the Nifty 50. |
| Listed Companies | BSE has more than 4,000 listed companies. | NSE has more than 1,600 listed companies. |
| Global Ranking (2023) | BSE is ranked 9th globally. | NSE holds the 8th position in the global ranking. |
| Electronic Trading Platform | BOLT (BSE Online Trading) was incorporated in 1995. | NSE started the electronic trading platform in 1992. |
| Depository | CDSL | NSDL |
| Trading Network Coverage | BSE facilitates trading across 419 cities. | NSE’s network extends to over 1500 cities. |
| Liquidity Comparison | BSE generally exhibits lower liquidity compared to NSE. | NSE enjoys higher liquidity due to significantly higher trading volumes. |
Conclusion
The NSE and BSE are India's principal stock exchanges, where different financial products such as stocks, derivatives, ETFs, mutual funds, corporate bonds, and so on are listed and traded electronically.
The NSE is India's largest stock exchange in terms of market capitalisation. Its benchmark index is the NIFTY 50, which measures the fifty largest and most liquid equities among the 1600+ listed businesses on the NSE. Similarly, the BSE's benchmark index, SENSEX, measures the top thirty most established businesses on the Bombay Stock Exchange.
Frequently Asked Questions
In terms of trade volume, the NSE is a larger stock market than the BSE. It also has a greater market capitalisation than the BSE.
Both exchanges are open from 9:00 AM to 3:30 PM, Monday through Friday, with a Pre-Open session from 9:00 AM to 9:15 AM.
The difference in stock prices between the NSE and BSE is owing to the NSE's larger trading volume, which results in lower price disparities due to more buyers and sellers.
The decision between NSE and BSE is based on your experience and interests. Beginners may favour BSE, whilst experienced investors may prefer NSE.
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