The National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE) are India’s main stock exchanges. The BSE is located in Mumbai and was established in 1875, while the NSE is located in New Delhi and was established in 1992.
BSE vs NSE is a crucial topic for investors in India. Both exchanges offer a platform for trading stocks, bonds, and other securities. In addition, the NSE also offers trading in derivatives, such as futures and options. The BSE is the larger of the two exchanges.
Both of these exchanges are regulated by the Securities and Exchange Board of India (SEBI).
The listed companies solely determine the choice of exchange. For instance, BSE is the sole stock that is listed on NSE. If you wish to trade on the BSE, NSE is your sole option. However, despite that, the majority of the equities are listed on both the BSE and NSE. The decision is thus not that tough.
Understanding these stock exchanges and becoming familiar with the key differences between BSE & NSE is crucial whether you’re a trader or an investor. Thus, here we will look deeper into what is NSE and BSE.
What is NSE?
The National Stock Exchange of India is the leading stock exchange in the country and is located in Mumbai. In 1992, NSE became a legal entity. Following SEBI’s recognition of it as a stock exchange in April 1993, it started operating in 1994 with the introduction of the wholesale debt market and shortly after that, the cash market sector.
The NIFTY benchmark index is another feature of the stock exchange (National Fifty). The 50 largest (in market capitalization) and most actively traded businesses listed on the NSE are what provide the NIFTY index its value. In addition, the NSE has just been determined to be the greatest exchange in the world for trading derivatives contracts.
It serves as the largest stock exchange in India regarding trading volume and number of listed companies. NSE is better than BSE in market capitalization, the number of listed companies, and the benchmark index.
What is BSE?
The Bombay Stock Exchange (BSE) is the oldest stock exchange in Asia and the largest in India. It is located at Dalal Street in Mumbai. The BSE was established in 1875 by a group of stockbrokers. The BSE is a voluntary, non-profit organization.
The Bombay Stock Exchange also offers a benchmark index similar to NIFTY called SENSEX (Sensitive Index). This index, which was originally released in 1986, effectively represents the weighted average worth of the top 30 businesses listed on the stock exchange.
The BSE is not just a platform for stock trading. It also provides various services, including listing, trading, clearing, settlement, and market data. The BSE is the world’s fastest stock exchange, with a trading speed of 6 microseconds.
NSE vs BSE
The National Stock Exchange (NSE) is the top leading stock exchange in India, located in Mumbai. In contrast, the Bombay Stock Exchange (BSE) is the oldest in Asia and is also located in Mumbai.
Both exchanges offer investors a wide range of products and services, but there are some key differences between them. Let us look closely into NSE and BSE differences:
- The NSE is a fully electronic exchange, while the BSE has both an electronic and a physical trading floor.
- Due to its monopoly in this market, the NSE is in the lead. BSE experiences far lower volumes from both traders and investors.
- The NSE offers a wider range of products, including derivatives and currency futures, while the BSE focuses mainly on equities.
- The NSE is at number 11 in the world stock exchange rankings, while the BSE is in position 10 overall.
- More than 1600 corporations are listed on the NSE, while more than 5000 are listed on the BSE.
- BSE emphasizes trading in mutual funds, debt instruments, and currencies, whereas NSE encourages trading in debts, equity, and currency derivatives.
- The NSE also has a larger trading volume and is more liquid than the BSE.
The NSE is a more modern and sophisticated exchange, while the BSE is more traditional. Both exchanges have a lot to offer investors; choosing one will depend on your investment goals and preferences.
There is no denying that the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE) are two of India’s most important stock exchanges. They are both well-regulated and offer a wide range of products and services.
For starters, the NSE is a newer exchange, having been founded in 1992. The BSE, on the other hand, has been in operation since 1875. This makes the BSE the older and more established of the two exchanges.
NSE is fully automated, while BSE relies on a manual trading system. This makes the NSE a more efficient and faster exchange.
Now that you are aware of the fundamental distinctions between NSE and BSE, you are prepared to proceed to invest in the stock market of your preference.