Both exchanges, the National Stock Exchange (the NSE full form) and the Bombay Stock Exchange (the BSE full form), are vital pillars of the Indian Capital Market. Hundreds of thousands of brokers and investors trade on these stock exchanges alone daily. BSE and NSE are both established in Mumbai, India. They are both recognized by the Securities and Exchange Board of India (SEBI). Let’s find out which one is better and how they differ: NSE vs BSE.
What is the stock exchange?
Before an in-depth study of NSE/BSE, we must know what a stock exchange is. A stock exchange is simply a centralized location where corporations, governments, and investors can easily buy and sell equities. In other words, the stock exchange is where shares of publicly traded companies can be sold and bought.
NSE and BSE are India’s two largest stock exchanges and thus are the key components of the Indian Capital Market. BSE stood for Bombay Stock Exchange and was established in 1875. This automatically makes it India’s oldest stock exchange in age. BSE’s benchmark index is SENSEX.
NSE stood for National Stock Exchange and was incorporated in1992. NSE with benchmark index NIFTY is India’s largest exchange. Going forward, SENSEX and NIFTY represent India’s stock market trend and development. In our world today, you can easily get charts, quotes, rates, and prices online.
Having known this, the questions in our minds now are: “How does it work? What is the difference between NSE and BSE in the share market?”. All these and more will be answered as you read on.
NSE or BSE – which is better?
BSE is a key example of trading with efficiency and transparency. As well as in derivatives, mutual funds, currencies, and debt instruments. They offer risk management, clearing, settlement, investor education, and, of course, trading. BSE’s mission is to “Emerge as the premier Indian stock exchange with best-in-class global practice in technology, product innovation, and customer service”.
On the other hand, NSE’s business model is more or less vertically integrated. It offers trading, clearing and settlement, exchange listing, financial education, and technical solutions. NSE firmly believes that technology is an important part of the financial markets. That is to say that technology helps in increasing the overall market transparency. NSE’s vision is “To continue to be a leader, establish a global presence, and facilitate the financial well-being of people.”
Which do you think is better for investors? Let’s just agree that it’s too early to choose with the information we have.
What is the difference between BSE and NSE?
Let’s look at the differences between the two and get a better perspective:
- Benchmark Index: NSE uses NIFTY as its benchmark index, while BSE uses SENSEX as its benchmark index.
- Listed Companies: NSE has more than 1,600 listed companies, while BSE has more than 4,500 listed companies.
- Geographical Presence: NSE has a presence in more than 1,500 cities, while BSE has over 400 cities.
- Trading Volume: NSE has a very high trading volume compared with the fact that it has just over 1,600 listed companies. On the other hand, BSE has a low trading volume compared to over 4,500 listed companies.
- Liquidity: NSE is highly liquid and has large trade volumes, while BSE has low liquidity.
- SME platform: They both have their respective SME platforms. NSE has NSE EMERGE, while BSE has BSE SME. The SME platform of the Exchange is intended for small and medium-sized companies with high growth potential.
Note! The SME platform of the Exchange is intended for small and medium sized companies with high growth potential.
The NSE website is www.nseindia.com, and the BSE website is www.bseindia.com. You can get much more information on their websites: news about the market today, live market watch, etc. You can perform actions like online share trading, and it also opens the door to various trading courses for you. Websites show the live index levels and the daily trend for the major indices on BSE and NSE and their advance-decline.
BSE and NSE listed companies
Both exchanges have a large number of listed companies. Here are the top listed companies for each.
NSE top listed companies:
- HDFC Bank
- Bharti Airtel
- ICICI Bank
- Tata Consultancy Services Limited (TCS)
- ITC Ltd.
- Hindustan Unilever Ltd. (HUL)
- AMP Limited.
BSE top listed companies:
- HDFC Bank
- ICICI Bank
- Tata Consultancy Services Limited (TCS)
- Bajaj Auto
- Bajaj Finserv
- Tata Motors
- Multi Commodity Exchange (MCX).
Almost all the major companies in India are listed on both exchanges.
BSE index is known as SENSEX. It is also known as the Bombay Stock Exchange Sensitive Index. It is a free market-weighted stock market index made up of 30 well-established and financially sound companies.
As expected, the 30 businesses are listed on the Bombay Stock Exchange. These companies are simply some of the largest and most actively traded stocks in the country. They’re also representatives of various industrial sectors of the Indian economy.
S&P BSE SENSEX was published in 1986. It is regarded as the heartbeat of the domestic stock markets in India. Sometime in 2001, BSE launched DOLLEX-30, its dollar version. BSE’s share price is about 57,037 in stock market trading.
NSE index is known as NIFTY. It is a benchmark Indian stock market index representing the weighted average of 50 of some of the largest companies. Yes, these 50 businesses are listed on the National Stock Exchange. The NIFTY 50 index was published in 1996 and is one of the many stock indices of NIFTY.
Since then, NSE NIFTY 50 has grown to be India’s most significant single financial product in recent years. It has an ecosystem that comprises exchange-traded funds both onshore and offshore, exchange-traded options at NSE, and futures and options abroad at the SGX. NIFTY is the world’s most actively traded contract, as endorsed by surveys carried out by WFE, IOM, and FIA. NSE’s share price is about 17,136 in the live market.
Should you trade on BSE or NSE?
I’m sure that this is the question on your mind already. As a beginner in the share market looking to invest in shares, NSE and BSE are two stock exchanges where you can spend. While NSE is the biggest stock exchange, BSE is the oldest; but which is better for investors?
Experienced traders say BSE is more suitable for beginners. On the other hand, NSE is more suitable for seasoned investors and traders. As an investor in India who wants to invest in shares of new companies, BSE would be a perfect choice.
However, NSE would be the perfect choice for a day trader interested in share trading with derivatives, futures, and options. Additionally, NSE has the best stock trading app for users. The online trading software is available for free download on mobile and PC.
Therefore, for conservative investors, who like to sit and watch their investments grow, BSE would be the right choice. NSE and BSE have varying methods of levying a tax. As a result, NSE is suitable for lesser turnovers, and BSE is ideal for more significant turnovers due to the BSE code.
Note! For instance, you can try the Upstox Pro app. It is a user-friendly platform in India where you can use it to discover stocks easily, get insights, follow live news, and invest and trade on your mobile.
It is now easier for you to choose where to invest with the information presented above. Also, ensure that you meet the requirements to get started. One certain thing is that they’re both secure and provide good online services. As a result, both are excellent choices.
Finally, if you are ready to invest and trade, be prepared to risk. Therefore, it is advisable to deal only with financial products that you are familiar with and understand their risk. You should be aware that the prices of stocks fluctuate. The stock price may move up or go down or even become valueless. Losses will likely be incurred rather than profit made due to buying and selling stocks, so beware.