What is the Difference Between NSE and BSE?

Two stock exchanges in India account for the majority of India's equity share market trading volume. The Bombay Stock Exchange (abbreviated as BSE) is the main stock exchange, while NSE is the National Stock Exchange. These two stock exchanges are the largest in India, and they are also among the top in Asia, second only to Japan, China and Hongkong.

It doesn't matter if you are a trader or an investor, it is important to learn about these stock exchanges and the differences between NSE & BSE. These two stock exchanges offer valuable information that will help you better understand and appreciate the differences between NSE & BSE.

What's NSE?

The National Stock Exchange (NSE), India's largest stock exchange by market capitalization, was founded in 1992. India's first stock exchange to introduce electronic and fully-automated trading, the NSE. This electronic trading system has replaced the paper-based system that used physical shares certificates. It was only a matter of years before it became mainstream.

NIFTY (National Fifty) is a benchmark index that the stock exchange has. NIFTY is a composite index that includes 50 of the most traded and largest companies in NSE. NSE was also recently adjudged the largest derivatives exchange in the world in terms of traded contracts.

What's BSE?

The Bombay Stock Exchange is an older counterpart to the National Stock Exchange. The BSE was established in 1875 as "The Native Share & Stock Brokers Association". This makes it the oldest stock exchange in Asia. The Bombay Stock Exchange, unlike the NSE's open-cry system, moved to electronic trading in 1995.

The Bombay Stock Exchange has its own benchmark index, the SENSEX (Sensitive Index), which is similar to NIFTY. This index, which is basically a weighted average of 30 top-listed companies on the stock exchange, was introduced for the first time in 1986.

Difference Between NSE and BSE

These two stock exchanges are now more familiar. Here's more information to highlight the differences between NSE and BSE.

Incorporation

BSE is Asia's oldest stock exchange and has been around since the 18 th century. NSE, on the other hand, was introduced relatively late in its existence, less than 30years ago. BSE is at the 10 position in the global stock exchange rankings. NSE occupies position 11 .

Electronic trading

The National Stock Exchange is the better electronic trading platform when it comes to NSE and BSE. Since its inception, the NSE was a fully-electronic stock exchange that promotes paperless trading. BSE on the other hand had been using a paper-based trading system for many years and switched to electronic trading in 1995 after the introduction of BSE Online Trading (BOLT).

Derivatives contracts

NSE holds a significant lead in the derivatives contract segment and has effectively monopolized this segment. The NIFTY 50 & Bank NIFTY, two of India's most liquid indices, are the most traded in India's derivatives segment. The BSE, on the other hand, is much more popular among traders and investors.

When comparing the NSE and BSE numbers, it is clear that the Bombay Stock Exchange has more listed companies than the National Stock Exchange. NSE lists more than 1600 companies on its stock exchange. The BSE boasts more than 5000 companies. The difference in stock exchanges between them is striking, but it is understandable since the BSE is much older than the NSE.

Listing for stock exchange

The Bombay Stock Exchange, which is India's only listed stock exchange, is the one that has NSE and BSE listings. The National Stock Exchange is the stock exchange that lists the BSE. NSE had also planned to be listed on a stock market, but it was thwarted by legal obstacles.

Conclusion

The NSE and BSE are two of the most popular stock exchanges around the globe. With its over 5000+ companies listed, the Bombay Stock Exchange is the best platform for beginners. The National Stock Exchange is another option, offering a wide range of derivative contracts and seasoned traders. You now know the difference between NSE & BSE so you can start investing on the stock exchange that interests you.