Difference between NSE and BSE

When you step into the world of stock market, knowing the big names is a must. When you are working in the Indian Stock market, you should know about BSE and NSE. These are the names that strike you first when you think about Indian stocks.

BSE (Bombay Stock Exchange) and NSE (National Stock Exchange) are big names in the Indian Economy. They play a vital role, and as an investor, you need to understand the difference between them. “Knowledge is power”, and as the adage goes, here we will share information on what the major indices in the Indian Economy – Nifty and Sensex, their working, and other important details.
But before we get to it, you need to understand the meaning of a stock exchange fully. A place where investors can buy and sell stocks in a regulated manner is a stock exchange.

Major stock exchanges in India are BSE and NSE. Knowing the difference between the two can impact your decision to invest through the BSE or the NSE.

BSE is the oldest stock exchange, not in India alone but also the oldest stock exchange in Asia. On the other hand, NSE is larger in comparison with BSE. This enormousness is in terms of everyday turnovers and the number of trades that happen on the index.

When it comes to capitalisation, BSE garners a rank 10 in the world. The NSE is not too far behind in this as it garners a rank 11. Talking about listings, BSE has more than 6000 companies listed. NSE has more than 1600 companies.

In order to raise capital, BSE registers companies that issue shares. These issued shares are then traded on the exchange. However, NSE is still a private limited company and is getting ready to come up with its own IPO soon.

When you look at the timeline, NSE’s capital market operations started only a couple of decades ago, that is in 1994. BSE had its capital market operations running since 1875.

NSE is known to be the first stock exchange in India that started to provide a fully automated trading system which was screen-based. Before the inception of NSE, trading membership was a confined group of brokers. Investment in shares was not accessible to the general public. NSE changed this and made the stock market available to the masses.

Even in the matter of liquidity, NSE clearly is a winner. This is because volumes traded in NSE are higher compared to BSE. This is what puts NSE in favour of Intraday Investors. But if you are a long-term investor, you would know that BSE comes in handy. Long-term investors do not buy and sell shares on a daily basis, and that is why BSE is beneficial for them.

The benchmark of NSE is Nifty. 50 listed stocks make the Nifty. In the case of BSE, the benchmark is Sensex. 30 major listed stocks make the Sensex. These benchmark indices are regularly reviewed, and the stocks that do not satisfy the criteria laid down by these benchmarks are replaced.

This is how you distinctly identify the difference between BSE and NSE. And once you have made out the difference, it becomes easier for you to choose, based on your decision and your choices.

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