Difference Between BSE and NSE (With Table)

BSE vs NSE

BSE stands for Bombay Stock Exchange, and NSE stands for National Stock Exchange. Both are two key components of the Indian Capital Market. The key difference between BSE and NSE lies in the fact that BSE’s index includes the top 30 stock index, while NSE’s index includes the top 50 stock index.

BSE was established in 1875, and it is the oldest stock exchange in Asia. NSE has been introduced in 1992 and is now the largest financial market in India.

The BSE has about somewhere close to 5000 companies, which makes it one of the largest exchanges in the world along with others.

Due to BSE, the Indian corporate sector has grown a lot. Both of the systems were doing great, and it didn’t take them long to become a recognizable stock exchange system.

BSE was recognized in 1957 while NSE in 1993. Both, the BSE and NSE are in Mumbai, Maharashtra. They are also recognized by SEBI (Securities and Exchange Board of India).


Parameter of ComparisonBSENSE
ExistenceBSE came into existence in 1875.NSE was firstly introduced in 1992.
RankingBSE’s rank in all of the top stock exchanges is 10th.However, NSE’s rank is 11th.
Electronic exchange systemIntroduced its electronic system in 1995.Launched it in 1992.
IndexIndex of BSE is SENSEX, which denotes the top 30 stock indexes.Index of NSE is Nifty 50, which gives the top 50 stock indexes.
Index valueBSE’s index value is 39,298.38 as of October 21, 2019.NSE’s index value is 11,661.85 as of October 21, 2019.

 

What is BSE?

BSE (Bombay Stock Exchange) was introduced in 1875. In those days, it was called ‘Native Share and Stock Broker’s Association.’ It was recognized as the premier stock exchange of the country in 1957.

It is located in Mumbai, Maharashtra. Bombay Stock Exchange is the second-largest exchange in India. BSE is also one of the oldest stock exchanges of India, with a total of 4900 companies, which makes it the third exchange system worldwide to hold that many companies.

BSE’s index is known as SENSEX (Sensitivity Index), which includes the top 30 exchange companies. SENSEX was introduced in 1986. BSE switched to an electronic trading system, known as BOLT (BSE on-line trading), in 1995.

However, this was not the first electronic trading system in the country. NSE launched the first automated electronic trading system in 1992.

The role of BSE in the security market is to act as the first-level regulator. It provides monitoring services, which reduces the risk of any irregularities or errors in stock prices.

Sensex is used to calculate the overall performance of the BSE. The BSE became a corporate entity from a group of brokers in 2005.

BSE office
BSE office
 

What is NSE?

The NSE or National Stock exchange is introduced in 1992. It was present all over the country with a fully automated electronic trading. NSE is based in Mumbai, Maharashtra. It helps corporations to develop a tendency to raise capital.

It also acts as a platform where equities, debt, etc. can be traded. Due to NSE, it is now possible to have new listings, IPOs, IDR’s, etc. by foreign companies that are trying to raise capital in the country.

It is the largest financial market in India. NSE’s index is Nifty 50, which includes the top 50 exchange companies. It helps to keep track of the Indian equity market’s assets.

NSE was established with the goal of introducing transparency in the Indian capital market. Therefore, it was set up by a cohort of financial institutions in India.

In 2016, the NSE was announced as the 12th largest stock exchange globally, with an accumulation of $1.41 trillion.

The exchange system of NSE provides support of 3,000 VSAT terminals. This makes NSE the largest private wide area network in the entire country.

For any company that is trying to be on the list of major exchanges, it is crucial to consider the National Stock Exchange.

NSE office
NSE office

Main Differences Between BSE and NSE

  1. NSE firstly introduced electronic exchange trading in 1992. However, BSE established its electronic trading, BSE on-line trading (BOLT) way later in 1995.
  2. The index of BSE is SENSEX (Sensitivity Index), which includes the top 30 trade exchange companies. NSE’s index is Nifty 50, which gives the top 50 stock index.
  3. BSE got established as a recognized stock exchange in 1957. However, NSE was recognized in 1993.
  4. BSE was introduced way before in 1875, making it the oldest. However, NSE was established in 1992.
  5. The trading in BSE occurs in equity, mutual funds, currencies, debt instruments, etc. whereas, in NSE, trading happens in trading equity, debt, equity derivatives, etc.
  6. BSE is declared as the 10th largest stock exchange in the world, whereas NSE is 11th in position.
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Frequently Asked Questions (FAQ) About BSE and NSE

What is the role of NSE and BSE?

NSE is the short form used for National Stock Exchange, and BSE is the short form used for Bombay Stock Exchange.

The role of NSE is to inform the investors about the capital market rules and regulations and to trade financial instruments such as bonds, equity shares, government securities, etc.

It provides equal access to the investors by a proper communication channel. BSE is the oldest stock exchange in India, and it plays as the first level regulator in the market. It also works to detect manipulation in the stock market by monitor mechanisms.

How is Sensex calculated?

Sensex is an index that reflects the fluctuation of the share prices in BSE (Bombay Stock Exchange). Free Float Market Capitalization is the method by which Sensex is calculated.

The base value of Sensex is 100 index points. To calculate market capitalization, you are required to multiply the stock prices with the share issued by the company.

Can we invest in Sensex?

You cannot purchase shares directly, but you can invest in companies that are included in BSE or Sensex. For the indirect purchase of shares, you must open a trading account and a Demat account. You can directly buy shares of the companies included in Sensex.

You can invest through mutual funds in the companies which invest in Sensex shares. You can purchase ETFs (Exchange Traded Funds) through a stockbroker in which you want to invest in and buy/sell it.

Can I sell NSE shares on BSE?

Yes, you can sell NSE shares on BSE and BSE shares on NSE by arbitrage trade for intraday. Though it has high returns on investment, it also has high risk.

You will find traders and investors with access to exchange on the top. The brokerage can be eliminated easily by them.

What is Bank Nifty?

Bank Nifty is of 12 large capitalized stocks that trade on NSE from the banking sector.

Which is bigger NSE or BSE?

NSE is larger than BSE in terms of the number of trades and daily turnover on the index.

In terms of market capitalization, BSE is bigger than NSE as BSE stands on 10th position in the world, and NSE stands on 11th position.

Also, BSE has 6000 companies listed on it, while NSE has only 1600 companies listed on it.


 

Infographic

BSE vs NSE

 

Conclusion

Both BSE and NSE are required for the development of the Indian capital market. Both of the exchange systems are present all over the country and are also accessible to the people living overseas.

Every day, millions of people come to trade on these stock exchanges. Both of these systems are located in Mumbai, Maharashtra. They are recognized by SEBI (Securities and Exchange Board of India).

BSE and NSE successfully provide a non-error effective mechanism for the people who want to trade.

Both the exchange system ensures that you get high-quality services while preserving the ethics of the market. This ensures the growth of the Indian Capital Market.

If a company’s share is only listed on BSE, then it leaves you no choice but to trade on BSE. But if a company is listed on both, then it comes down to the personal choice of the investor, which one he wants to go with.

Both the stock exchange is extremely good and hot in the market. The aim of both BSE and NSE is to provide their services to every investor across the globe.


 

Word Cloud for Difference Between BSE and NSE

The following is a collection of the most used terms in this article on BSE and NSE. This should help in recalling related terms as used in this article at a later stage for you.

BSE and NSE
Word Cloud for BSE and NSE

 

References

  1. https://arxiv.org/pdf/physics/0605247
  2. https://www.jstor.org/stable/4411693

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