Do you constantly hear the terms – NSE, BSE, BSE Sensex, Nifty 50 but have no idea what they mean?
Well, you have come to the right place. In this article we will discuss:
- What is NSE & BSE?
- What is the difference between NSE and BSE?
- Which is better? – NSE vs BSE
- How to trade on NSE and BSE in the stock market?
So, let’s get started.
What is NSE?
The National Stock Exchange, or NSE was established in the year 1992 and is a leading stock exchange in India. NSE was set up with an aim to provide transparency to the Indian stock markets.
In 1996, NSE launched its benchmark index called National Stock Exchange 50, also known as ‘Nifty50’. Nifty50 consists of the 50 largest companies in India as per market capitalisation.
Here are some interesting facts about NSE:
- NSE was the first exchange in India to introduce an electronic share trading system, NEAT in 1994.
- NSE is the largest stock exchange on the basis of daily turnover for equity shares since 1995.
What is BSE?
The Bombay Stock Exchange or BSE was established in 1875 and is the oldest stock exchange in India and Asia. It was started under the name “The Native Share & Stock Brokers Association” in 1875.
Similar to NSE, BSE has its own benchmark index known as ‘Sensex’ short for Sensitivity Index. Sensex contains the most reputed and traded 30 stocks in India.
Here are some interesting facts about BSE :
- BSE is the only listed stock exchange in India. It is listed as BSE Ltd. on the Bombay stock exchange.
- BSE is the oldest stock exchange in Asia.
- BSE is the 10th biggest stock exchange in the world
- BSE has a speed of 6 microseconds, which makes it the fastest exchange in the world.
What is the difference between NSE and BSE?
|Electronic trading system||BOLT or BSE On-Line Trading||NEAT or National Exchange for Automated Trading|
|Number of listed companies||5000+companies||1700+companies|
|Listed stock exchange||Listed on BSE as BSE Ltd||NSE is yet not listed.|
|Benchmark Index||Sensex||Nifty 50|
|Companies in Index||30||50|
|Accredited as||Oldest stock exchange in India and Asia||Largest stock exchange in India|
|Trading Volume||Lower trading volume than NSE||Highest trading volume in India|
|Indices||Sensex +22 indices||Nifty 50 + 54 indices|
|Headquarters||Dalal Street||Bandra Kurla Complex|
Which is Better? BSE or NSE?
Both NSE and BSE capture the pulse of the economy but since NSE has higher trading volume, it results in better liquidity and price discovery. A simple rule while selecting between NSE and BSE is to decide:
- If you are a beginner and want to ‘invest’ in shares then BSE is a suitable option for you as it has 5000+shares.
- If you are a seasoned trader and want to trade in derivatives then NSE is the suitable option for you due to the higher trading volumes.
Additionally, both NSE and BSE have different methods of levying taxes.
- If you generate less turnover, NSE is suitable for you.
- If you generate significantly more turnover, BSE is suitable for you.
[Suggested Reading: Share Markets in India]
Trading on NSE and BSE
With ample knowledge on NSE and BSE you can now start trading on NSE and BSE by following the below steps:
- Firstly, open a trading and Demat account. Luckily, you don’t have to look far, as Samco has been awarded as the best equity stock broker in India by CNBC – Awaaz and is a leader in providing the most technologically advanced Demat account in India.
- Once your Demat account is opened, you simply need to transfer funds from your bank account to your trading account and start trading on NSE or BSE!
[Suggested Reading: Best stocks for intraday trading now in India]
Both NSE and BSE are secure stock exchanges and most stock brokers have membership with both NSE and BSE. The critical aspect of trading lies in selecting the best stocks for investment. As long as you have invested in fundamentally strong stocks, it doesn’t matter whether you invest through BSE or NSE.
If you are confused and can’t decide which stock to invest in, then StockBasket is the answer to all your problems. Invest in a basket of stocks expertly hand picked based on 25 intelligent stock rating parameters and experience maximum wealth creation through StockBasket.
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