NSE vs BSE – Difference between India’s Top Stock Exchanges
Here is a comparison of NSE vs BSE.
The Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE) are one of the leading and largest stock exchanges existing in the Indian markets.
Also, these two stock exchanges are ruling the stock market and efficiently administering the capital investments of India. This article discusses in detail about these bodies.
NSE vs BSE – Find the difference between Top Stock Exchange in India
Here is the list of 10 differences between NSE & BSE.
- For BSE, the benchmark index is Sensex, and for NSE, it is Nifty.
- BSE has about 5749 listed companies, and in the case of NSE, it is around 1696.
- BSE is one of the oldest stock exchanges, whereas NSE is the largest stock exchange.
- The trading volume of BSE is lower than NSE.
- The instruments traded in BSE are equity, mutual funds, whereas, in NSE, they are debt, equity, and currency derivatives.
- The year when the BSE and NSE commenced their operations are 1875 and 1944, respectively.
- The transaction charges for BSE are 0.003%, and that for NSE is 0.0325%.
- BSE allows high-speed trading to its customers, whereas NSE provides a fully automated trading arrangement.
- NSE & BSE rank 11th and 10th globally.
- BSE extends to about 417 cities, and NSE has it spread to 417 cities.
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NSE vs BSE – Where to Invest?
There are around 1700 industries in the list of NSE, and about 5500 industries in BSE, so it does not matter which exchange one chooses for investment in stocks.
Both the stock exchanges are in good terms and profitable in terms of services that they provide to the investors.
Instead of focusing on which stock exchange to choose, the investors should focus on selecting the stocks related to investments carefully and patiently.
The trading volumes of shares in NSE are generally higher as compared to the BSE, so it will be profitable for the investors to sell on NSE if the quantity of the stocks is high.
For example, if a company ABC stock is trading at Rs 150 on NSE, then the price that is displayed could be Rs 149.
Also, NSE does not allow trading of few shares, and in such cases, BSE is the best option for the buying or selling of shares.
Example: stocks that can also be traded only on BSE are SpiceJet, Claris Lifesciences, etc.
The majority of the stockbrokers are members of NSE and BSE, and so, investors can invest in either of them.
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Example of How Stocks work in BSE and NSE
For example, if you wish to sell shares of a company ABC and if you observe that on the BSE, the stock is being quoted at Rs 700 and on NSE that stock quotes at Rs 702 then it is preferable to sell the shares on NSE to gain profit.
If you wish to place a limit or restriction on selling company ABCs shares at Rs 715, then the exchange type does not matter much.
Buying a share from either of the exchanges does not make any difference. It is because the charges associated with the brokerage and securities transaction taxes are the same for both the stock exchanges.
Bombay Stock Exchange (BSE)
Earlier known by the name The Native Share and Stock Brokers Association, the BSE came into the market in the year 1875 by a famous industrialist and businessman, Premchand Roychand.
The BSE has a glorious history and past in that it has its foundation under the guidance and thoughts of few stockbrokers who used to trade under a banyan tree near the Bombay Town Hall.
Later in 1928, BSE was moved to Dalal street and is considered to be the first-ever stock market to receive permanent recognition from the Indian government under the Securities Contract Regulation Act of 1956.
Sensex is the market value-weighted, as well as the capitalization index value.
Its implementation came into the picture in the year 1986 that is now popularly the measurement factor to administer the activities of the prices associated with the shares invested in the stock market.
Sensex evaluates the overall stock market value of 30 stocks obtained from various industries.
They calculate the Sensex value daily by dividing the average stock market value of the respective 30 companies available in the index, with the index divisor that deals with the actual base period.
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Services provided by BSE
BSE had certain flagship services, some of which are the Equity derivatives and the Free-float index.
BSE adopted the online or virtual trading system with the help of technology and the internet. Also, BSE has an ISO certificate for its services like clearing, settlements, and surveillance.
BSE also focuses on imparting financial training and stock marketing knowledge to the investors by organizing training workshops, awareness campaigns, and informative articles.
The primary assets of BSE:
BOLT – It refers to the Bombay Stock Exchange’s Online Trading System that came into the market in the year 1995 to initiate transparency as well as liquidity, and in this way enhancing the depth of the market.
It is efficient in eliminating the inappropriate matches and the risks related to the settlement.
Investor Protection Fund – The Investor Protection Fund was brought into action in the year 1987 to safeguard the investors from the defaulting members.
Usually, the trustees and higher authorities who are appointed by the stock exchange handle the funds. The members provide their contribution to the funds.
Education and Training of Investors – BSE focuses on the training of investors. It ensures the protection of the investors and assures the security of the mechanism of the capital market.
The Bombay Stock Exchange even facilitates assistance in the form of finance to the investors, and it can be up to 1 crore.
They have set up several centers for Investor Assistance in various cities of India that includes conducting seminars, workshops, guest lectures, and spreading awareness about trading.
The BSE has indulged in several collaborations with the financial organizations and management institutions to widespread its awareness program.
Vision of BSE or Bombay Stock Exchange
The vision of the Bombay Stock Exchange is to be the provider of knowledge of financial as well as leadership learning in the world.
It tries to achieve it by pioneering and facilitating the dissemination of knowledge for the improvement and enhancement of skills of the professionals.
Mission of BSE
The mission of BSE includes the promotion of an open learning platform that aims to bring people together and allow the exchange of ideas, thoughts, and cultures from around the entire world, transforming the lives of individuals as well as organizations through innovative educational platforms and programs.
The BSE aims to build responsible leaders, thoughtful entrepreneurs who provide value and strength to their respective organizations as well as their society.
Advantages of BSE
- It provides fundraising as well as exit routes to the investors.
- Ability and potential to raise capital investment.
- Control and surveillance of trading and associated activities in securities.
- To facilitate legitimate and fair prices for the agreement.
- Timely disclosing or revealing the information on the corporate sector.
- Efficient corporate practices.
- Provide benefits to the public.
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NSE or National Stock Exchange
The National Stock Exchange was established in the year 1992 and had its recognition as a stock exchange in the year 1993.
Objectives of NSE
- Exercise and introduce a nationwide facility for the training associated with all sorts of securities.
- Establish equal access to the information for investors with the help of an efficient network of communication.
- Facilitate transparency in the securities market, to keep everything fair and unbiased for all the investors.
- Incorporate the use of electronic systems to function the trade and also to satisfy the standards set at an international level.
- Enable shorter settlement cycles.
Ownership of the NSE
NSE is owned and managed by several financial institutes, banks, insurance, and finance companies.
The professionals and authorities who do not participate in the trading and stock market control and organize the companies.
The Board of National Stock Exchange comprises senior as well as professional executive officers who design the policies related to the stock market.
NSE also consists of a committee of executives who have to administer the functioning and working of the stock exchange.
It is autonomous screen-oriented trading. It supports market segments like the wholesale debt market, capital market, and future option segment.
Vision and Mission of NSE
NSE has the vision to show commitment to facilitate improvement in the financial well-being of the people. Also, it continues to be a determined leader and focus on establishing global existence.
Besides, NSE aims to satisfy the requirements of the customers and have an immense passion for excellence as well as indulge in activities to promote teamwork.
NSE shows mutual respect and concern for every individual.
NSE vs BSE – Conclusion
On a final note, the article discusses the comparison of NSE vs BSE, two most important bodies in the Indian stock market.
Besides, we have also discussed the vision and mission of the respective bodies for clarity.
Also, we have emphasized on the ownership details for the traders to try out trading with these secure bodies.
Finally, we assert that it is important for any trader to understand these aspects of trading before they enter the industry.
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