How to choose between NSE and BSE, comparison between BSE and NSE.
The BSE is the oldest Stock exchange in India founded on July 9, 1875, in Dalal Street of Bombay: now Mumbai. The NSE, established in 1992, is the first electronic Stock Exchange in India. The NSE was the first Stock Exchange in India to have all computerised, screen-based electronic trading system. BSE also has an all-digital screen-based electronic trading system now. We will compare BSE an NSE from an individual investor’s point of view.
The short answer to ‘which is better BSE or NSE?’ is that both are excellent choices. Buying or selling shares in either the BSE or NSE is very easy and they both have good online services. So both NSE and BSE are perfect.
How many companies are listed in BSE and NSE
There are many more companies listed on BSE than in NSE. BSE has about 6000 listed Companies compared to less than 2000 listed Companies in the NSE as at the end of 2016. The market capitalisation of listed companies in BSE at the end of 2016 was about US$ 2 trillion compared to about US$ one trillion in the NSE.
Thus you will find many new Companies listed only on BSE and not listed on the NSE. For the individual investor in India, who wants to invest in shares of new companies, the BSE is a better choice. It will be very rare to find a Company that is only listed on the NSE and not listed in the BSE.
Difference between BSE and NSE
The main difference between BSE and NSE is that the trading volume of individual stocks in NSE is much higher than in BSE. The NSE is a better choice for those who want to do ‘Day Trading’ and risk doing Share Trading with Derivatives, Futures and Options. The NSE has better software for these high-risk online transactions. The BSE is for the more conservative investor who likes to invest and sit and watch his investments grow. It is for people with a more relaxed attitude to investing in shares.
About NSE, National Stock Exchange of India
The National Stock Exchange of India (NSE) is India’s largest Stock Exchange by value of shares traded per day and the third largest in the world. The NYSE: New York Stock Exchange is the biggest in the world.
The NSE main office is in Mumbai (Bombay) and incorporated in November 1992 as a tax-paying company. The promoters of NSE are some of India’s top financial institutions, banks and insurance companies.
NSE trading hours are from 9:00 am to 3:30 pm, Indian Standard Time, Mondays to Fridays except on holidays declared by the NSE or by the Government of India.
You can do trading on the NSE in the following:
- Futures and Options
- Retail Debt Market
- Wholesale Debt Market
- Currency Futures
- Mutual Funds
NSE has set up one of the best online trading systems in the world. The main index of the NSE is the NIFTY. The full form of NIFTY is ‘S&P CNX Nifty’ a short-form or abbreviation for ‘Standard & Poor’s CRISIL NSE Index 50’.
The NIFTY value is an Index – just a numerical value. The NIFTY value is worked out by computers almost every second by using a formula which takes into consideration the share price and the market capitalisation of the 50 NIFTY Companies. Each of the 50 NIFTY Companies contributes a value to the NIFTY Index depending upon its Weightage or its free-floating market capitalisation. RIL: Reliance Industries Ltd. being the largest Company by market capitalisation contributes most to the NIFTY Index- about 11%.
The 50 Companies in the NIFTY are selected from leading Companies from 21 sectors of the Indian economy like Auto, Banking, Cement, Engineering, IT, etc. The NSE NIFTY is at its highest value ever in 2017 and hovering around 10,000. The market trend is more positive than ever.
NSE has also set up an index services firm known as India Index Services & Products Limited (IISL) and they manage the following Major NSE Indexes or indices of the NSE:
- S&P CNX Nifty
- CNX Nifty Junior
- CNX 100
- S&P CNX 500
- CNX Midcap
- Nifty Midcap 50
- S&P CNX Defty
- CNX IT Index
- CNX Bank Index
- CNX FMCG Index
- CNX PSE Index
- CNX MNC Index
- CNX Service Sector Index
- CNX Energy Index
- CNX Pharma Index
- CNX Infrastructure Index
- CNX PSU BANK Index
- CNX Realty Index
- S&P CNX Nifty Shariah / S&P CNX 500 Shariah
- S&P ESG India Index