Difference Between BSE and NSE (With Table)

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BSE stands for Bombay Stock Exchange, and NSE stands for National Stock Exchange. Both are two key components of the Indian Capital Market. 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 vs NSE

The difference between BSE and NSE is that BSE’s index includes the top 30 stock index, while NSE’s index includes the top 50 stock index. 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).

Comparison Table Between BSE and NSE

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.

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.

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.

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.

References

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