Difference between BSE and NSE?
The stock market in India is a highly structured and regulated place. With SEBI acting as a regulator, there are various intermediaries like stock exchanges, depositories, depository participants, clearing corporations, etc., that work in tandem to offer a safe trading place for securities.
In this article, we are going to talk about stock exchanges with a focus on two of the most popular stock exchanges in India – NSE and BSE. We will also highlight the difference between NSE and BSE for better understanding.
A stock exchange plays an important role in the stock market. It is a platform that allows investors to trade securities through stockbrokers. While there are many stock exchanges in India, two of the most popular ones are the NSE and BSE.
Before we explore the difference between NSE and BSE, let’s look at the definition of these exchanges.
What is NSE?
NSE, or the National Stock Exchange, is a young stock exchange in India that was formed in 1992. It gained popularity for being the first exchange to offer a fully automated electronic trading system in the country.
1992 was the year when the paper-based share settlement process was replaced by an electronic system. And, NSE was at the helm of it. Over the last two decades, NSE’s electronic trading platform has evolved to cater to the changing needs of the share market. Today, it can handle over 16,000 orders every second with the capability to scale up if required.
Further, NSE and some leading financial institutions came together to form the first Depository in the country – NSDL [National Securities Depository Limited]. The idea was to reduce forgery in share certificates and make the settlement process more efficient.
Also Read: What is Indian Stock Market & Trade Settlement Process
What is BSE?
BSE, or the Bombay Stock Exchange, is the premier stock exchange of India. While its history dates back to 1875, it was officially recognized as a stock exchange in 1957. The exchange launched its online share trading system called BSE Online Trading System (BOLT) in 1995. It is one of the ten largest stock exchanges in the world and offers a range of services to assist the stock market.
Additionally, BSE joined hands with some leading banks to form CDSL [Central Depository Services (India) Limited]. All leading stock market exchanges have connectivity with the CDSL.
NSE vs BSE
Here are some points that highlight the difference between NSE and BSE:
|Parameters||Bombay Stock Exchange (BSE)||National Stock Exchange (NSE)|
|Founded in||BSE was founded in 1875 but was recognized as a stock exchange of India in 1957||NSE was founded in 1992|
|Benchmark Index||The benchmark index of the BSE is Sensex 30||The benchmark index of the NSE is Nifty 50|
|How many companies are listed on the exchange?||Around 5400||Around 2000|
|Market Capitalization||Nearly ₹3.6 trillion||Nearly ₹3 trillion|
|Network||BSE is present in more than 450 cities||NSE is present in over 1500 cities|
|Trading volumes||The trading volumes in NSE are much higher than BSE|
NSE vs BSE: Where should you invest?
As a share market investor, there is not much to choose between NSE and BSE. There might be some companies that are listed on BSE but not on NSE. In such cases, you will have to invest in BSE. However, if you are looking to buy stocks of a company listed on both the exchanges, then the higher trading volumes of NSE can be considered as a positive sign. We recommend that you research the stock with respect to its performance on both exchanges before making a decision.
Also Read: Difference betwwen NSDL & CDSL
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What is NSE?
There are around 9 stock exchanges in India offering a secure trading platform to investors. These include the National Stock Exchange (NSE India), Bombay Stock Exchange (BSE), Calcutta Stock Exchange (CSE), India International Exchange (India INX), Multi Commodity Exchange of India (MCX), National Commodity and Derivates Exchange (NCDEX), Indian Commodity Exchange Limited (ICEX), Metropolitan Stock Exchange of India Limited (MSE), and National Stock Exchange IFSC Limited.
What is the Bombay Stock Exchange?
Stock exchanges are integral to the functioning of stock markets in India. They are platforms that allow companies to list their shares for being traded in the market. While there are many stock exchanges in India, the Bombay Stock Exchange or BSE stands out as the oldest and one of the most trusted ones in the country.
Differences Between Stock Investing and Trading
Both trading and investing focus on profit-generation in the stock market. However, the way traders and investors approach this goal is different.
Traders aim to earn short-term profits. They jump in and out of stocks within days, weeks, and sometimes even minutes. Their focus is the stock’s technical factors and not the company’s long-term prospects. Traders think about the direction in which the stock can move and how profits can be earned from that move.
Frequently Asked Questions
Yes. There is no restriction on trading across multiple exchanges. However, you need to remember that you can trade in the share market only via a registered broker. Therefore, you will need a broker registered with the BSE and NSE to invest in companies listed with them. Some brokers are registered with both exchanges. You can open a trading account with such brokers if you wish to invest in NSE and BSE.
Both NSE and BSE offer similar services and are reliable stock exchanges. If you want to know the difference between NSE and BSE, then here are two basic points:
- While BSE has more companies listed, the options are slightly higher than NSE.
- On the other hand, the trading volumes are higher in NSE.
Barring these differences, there is nothing much to look at in NSE vs BSE. You need to research the performance of a stock on each exchange before making a decision.
For a stock to be traded in the stock market, it needs to be listed on a stock exchange. This allows market regulators to ensure that it is traded securely. The NSE and BSE are two of the most popular stock exchanges in the country. They list securities and offer a platform to investors and facilitate trade in the share market.