NSE or BSE: Difference Between Both Stock Exchanges

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  • 18 Sep 2023

A stock exchange is a regulated marketplace where securities are traded between buyers and sellers. It provides an organized and transparent platform for companies to raise capital and investors to trade financial assets. Stock exchanges set standards and provide real-time information to help investors make informed decisions.

Functions of the share market include listing shares, managing trading activity, and working closely with SEBI guidelines to protect against fraudulent activity on both investors as well as the company side.

Let us first begin by understanding what NSE and BSE are, Both NSE and BSE are one of the largest stock exchanges in the country and the NSE is the youngest, while BSE is the oldest stock exchange. Both NSE and BSE play vital roles in the functioning of the financial market of India. You can learn about each entity & the key differences between BSE and NSE.

  • The National Stock Exchange is the leading stock exchange in India located in Mumbai.
  • It was incorporated in 1992 as the first demutualized electronic exchange in the country with Vikram Lamaye.
  • NSE introduced an electronic trading platform, which made trading efficient and transparent.
  • It uses a fully automated screen-based system that provides a nation-wide trading facility for investors.
  • The NSE's flagship index is the NIFTY 50 which is the benchmark for Indian capital markets.
  • It offers trading in equities, debt instruments, derivatives, currency derivatives, commodities, securities lending and borrowing.
  • NSE accounts for over 70% of total derivatives market turnover and around 80% of cash equities turnover in India.
  • It has shaped the financial landscape of India by fostering retail participation and emergence of new industry segments.
  • BSE was Established in 1875, BSE is the oldest stock exchange in Asia. It is located in Dalal Street, Mumbai, State Maharashtra.
  • It was the first stock exchange to be recognized by the Indian Government under the Securities Contracts Regulation Act.
  • BSE introduced an electronic trading platform called BSE On-Line Trading (BOLT) in 1995.
  • It facilitates trading in equities, debt securities, derivatives, currencies, mutual funds and IPOs.
  • It has over 5,000 listed companies, the most of any exchange in India.
  • The benchmark index at BSE is the SENSEX, composed of 30 well established and financially sound companies.
  • BSE became the first stock exchange in India to obtain ISO certification for quality management.
  • It established India's first clearing corporation in 1996 and introduced derivatives trading in 2000.
  • BSE launched SME platform for small and medium enterprises and startups to raise capital.

Here are the key differences between bse and nse. Read the main factors which can differentiate both BSE and NSE stock exchanges of India.

Factors BSE NSE
IncorporationIt was founded in 1875, as one of the oldest stock exchanges of Asia.Founded in 1992, it is one of the biggest stock exchanges in India.
Benchmark IndexSensex 30Nifty 50
Total Listed CompaniesAround 7400Around 1790
Ranking in the worldBSE ranks in 10th position as one of the largest stock exchanges in the world.The NSE ranks in 11th position among the world largest stock exchanges in the world.
Market CapitalizationBSE has around ?266 trillionNSE has around ?199 trillion
LiquidityLower than NSEHigher liquidity
Transaction ChargesBSE transaction charges are 0.003% of total turnover. And for derivatives trading, BSE doesn't charge any fees.NSE charges a fee of 0.00325% of the total turnover.NSE has fixed its Exchange transaction charges for 0.0019% for futures trading & for Option trading total turnover charges are 0.05%
Official Websitewww.bseindia.comwww.nseindia.com

The National Stock Exchange of India accounts for over 70% of the total trading volume. With the accessibility, electronic platforms, greater liquidity, and larger number of listings made the NSE popular amongst the traders. However, the Bombay Stock Exchange (BSE) retains its significance as the oldest stock exchange in Asia with a long history. BSE remains the exchange of choice for SMEs and startups looking to list as it has lower compliance requirements. It also offers some trading segments and products not available on NSE.

While NSE dominates market share, BSE is still highly relevant serving a niche of small and medium companies. Investors in India see merit and complementarity in both exchanges co-existing, rather than a winner-takes-all scenario. Both exchanges are actively innovating, diversifying and enabling India's economic growth in their own ways. You can opt for any stock exchanges to trade & enhance your trading through & learn from Kotak Securities & clear out different doubts related to share market.

Conclusion

Therefore, in the above article of difference between BSE and NSE, you can simply conclude that both stock exchanges play complementary roles in developing India’s capital markets infrastructure and enabling economic progress. The NSE has emerged as the leading stock exchange driving volumes and liquidity with its nationwide reach, electronic platforms, and modern governance.

However, the oldest stock exchange BSE holds historical significance and retains its foothold serving small-cap and medium enterprises. Investors in India see value in both exchanges co-existing and competing. The regulatory reforms have created an environment where the exchanges can differentiate yet meet at single shared objectives of investor protection, capital formation and market integrity.

FAQs on Difference Between BSE and NSE

Yes, you can buy stock from one exchange and sell it on another exchange after taking delivery of shares in your Demat account.

The stock price in BSE and NSE is different due to the differences in volume of stocks traded in both stock exchanges.

Nifty 50 refers to the top 50 large cap companies listed in the National Stock exchanges of India.

To buy Nifty 50 Stock you need to open a Demat & Trading account from a registered brokerage company.

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