Difference Between BSE And NIFTY (With Table)

Understanding the Indian stock market is considered to be a tiresome task. Even the most established economists find it difficult to predict the fluctuations due to the large number of factors affecting the increase and decrease in the indices. For the appropriate investment of funds, one must have a crystal clear understanding of how BSE and NIFTY are different. 

BSE vs NIFTY

The main difference between BSE and NIFTY is that the former is India’s largest stock exchange system while the latter is an index often confused with the NSE itself. Here, it is vital to understand that the stock market is predominantly controlled by BSE and NSE. Owing to this fact, NIFTY and Sensex are also held in high spirits since they are interrelated to some extent.

BSE, the oldest establishment in the country’s stock market, is used to identify prominent stocks by using Sensex values. This sensitivity signifies the scope of fluctuation with changes in conditions like gold rates, major social uprisings, and similar upheavals. The traders prefer this over others since comparisons are quite easy thanks to the simplified index and less inclusion.

NIFTY has spread its reach to 1486 cities as far as the geographical spread is concerned. The stock exchange, that is, NSE has a fixed listing of two hundred. These listings are not limited and all types of sectors are included to maintain unanimity in daily comparisons.

Comparison Table Between BSE and NIFTY

Parameters of ComparisonBSENIFTY
Full-FormBSE is expanded as Bombay Stock Exchange. NIFTY stands for National Stock Exchange Fifty. 
Common Benchmark for ComparisionThe commonly used benchmark for ascertaining BSE is that of thirty companies on the top. NIFTY can be assumed by using the fifty companies at the maximum level, as per the name. 
Index Used for CalculationThe main index for the calculation of BSE is Sensex. NIFTY itself is an index for the calculation of NSE. 
Inherent SpecialityIt is an astounding fact that BSE is Asia’s oldest stock exchange. (global level comparisons)NIFTY’s specialty lies in the fact that it is India’s largest stock exchange. (national level comparisons.)
Year of EstablishmentBSE was established in 1875. NIFTY has been around since 1992.

What is BSE?

BSE, that is, Bombay Stock Exchange is a prominent share market system popular all across the Asian continent. The managing director, as well as the chief executive officer of this system, is Mr. Ashish Chauhan. He is a well-known figure as he gave a contribution to the setting up of the counterpart, that is, National Stock Exchange too.

Various factors lead to fluctuation and thus, the rates keep on changing daily. At times, scams are also highlighted to profess that the high magnitude rankings might invite danger if misused in an insecure manner. BSE is well known for speed. Competition is high due to economic conditions and thus, the benchmark might not prove to be stagnant after some time.

BSE is regulated by Sensex, the most prominent index for the same. Similar to NIFTY, this term is made up of two terms, that is, sensitivity and exchange. Further, this implies nothing else but the inherent sensitivity attached to the Bombay Stock Exchange. Some critics also compare this with the value of the Indian rupee and dollar for establishing a useful correlation. Overall, it should be understood that despite the location, BSE is not confined to the city of Bombay (now known as Mumbai).

What is NIFTY?

NIFTY is the main index used for comparisons and calculations associated with the National Stock Exchange. It is commonly used synonymously with NSE since the parameters are similar. While interpreting the situation of the market, this value is compared with Sensex. The meaning of this term has much historical significance attached to it. Companies across the world are affected by NIFTY rates as the stock exchange is valid in a whopping four hundred and seventeen countries.

NIFTY is highly significant as it is a collection of all the companies of the world listed on NSE. Since the importance is high in the world market, the landmark was subsequently increased to fifty companies instead of thirty. NIFTY is also known as S&P CNX NIFTY. S&P is the abbreviation for Standard & Poor’s Financial Information Services situated in the United States.

Such an inclusion keeps the spirit of pre-independence economic status alive since all this took over that time. On the other hand, CNX is a combination of CRISIL, NSE, and exchange or index (for the mention of x). Further, CRISIL can be expanded as Credit Rating Information Services of India Limited. It adds to the importance as it is India’s first rating system available.

Main Differences Between BSE and NIFTY

  1. BSE is the abbreviation for Bombay Stock Exchange while NIFTY is the combination of National Stock Exchange and the numerical unit 50. 
  2. The normal benchmark for comparison is capped at thirty companies for BSE while NIFTY extends to the top fifty companies of India. 
  3. The indexing of BSE is done using Sensex while the indexing of NSE uses NIFTY. 
  4. The inherent specialty of Bombay Stock Exchange is that it is the oldest stock exchange to cover up the market in the whole of Asia while NIFTY is the largest of those across India.
  5. The years of establishment for BSE and NIFTY are 1875 and 1992 respectively. 

Conclusion

Investment in the stock market is known to be full of risks. Experienced people have their respective rules and regulations but since uncertainty is high, the new investors should make informed decisions to ensure better results. With the prevalence of online markets, frauds are also on the rise. Other issues associated with the Indian stock market include fluctuation and competition.

It is best to discuss the same with a chartered accountant or some other expert. The various parameters set by the government and regulations on bitcoin mining are evident in the fact that it is not safe to let out finances without gaining much information in the same regard.

References

  1. https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3258942
  2. https://www.academia.edu/download/48337366/05_20.pdf
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