Indian Stock Markets – NSE and BSE

By | November 7, 2014
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How Stock Market works?

To learn more about how you can earn on the stock market, one has to understand how it works. A person desirous of buying/selling shares in the market has to first place his order with a broker. When the buy order of the shares is communicated to the broker he routes the order through his system to the exchange. The order stays in the queue exchange’s systems and gets executed when the order logs on to the system within buy limit that has been specified. The shares purchased will be sent to the purchaser by the broker either in physical or demat(digital) format.

Indian Stock Market Overview:

What is NSE?  

What is BSE?

 What is Nifty?

What  is Sensex?

The Bombay Stock Exchange (BSE) and the National Stock Exchange of India Ltd (NSE) are the two primary exchanges in India.

In addition, there are 22 Regional Stock Exchanges. However, the BSE and NSE have established themselves as the two leading exchanges and account for about 80 per cent of the equity volume traded in India. The NSE and BSE are equal in size in terms of daily traded volume. The average daily turnover at the exchanges has increased from Rs 851 crore in 1997-98 to Rs 1,284 crore in 1998-99 and further to Rs 2,273 crore in 1999-2000 (April – August 1999).

NSE has around 1500 shares listed with a total market capitalization of around Rs 9,21,500 crore (Rs 9215-bln). The BSE has over 6000 stocks listed and has a market capitalization of around Rs 9,68,000 crore (Rs 9680-bln). Most key stocks are traded on both the exchanges and hence the investor could buy them on either exchange. Both exchanges have a different settlement cycle, which allows investors to shift their positions on the bourses.

The primary index of BSE is BSE Sensex comprising 30 stocks.

NSE has the S&P NSE 50 Index (Nifty) which consists of 50 stocks.

The BSE Sensex is the older and more widely followed index. Both these indices are calculated on the basis of market capitalization and contain the heavily traded shares from key sectors. The markets are closed on Saturdays and Sundays.

Both the exchanges have switched over from the open outcry trading system to a fully automated computerized mode of trading known as BOLT (BSE On Line Trading) and NEAT (National Exchange Automated Trading) System.

It facilitates more efficient processing, automatic order matching, faster execution of trades and transparency. The scrips traded on the BSE have been classified into ‘A’, ‘B1’, ‘B2’, ‘C’, ‘F’ and ‘Z’ groups.

The ‘A’ group shares represent those, which are in the carry forward system (Badla).

The ‘F’ group represents the debt market (fixed income securities) segment.

The ‘Z’ group scrips are the blacklisted companies.

The ‘C’ group covers the odd lot securities in ‘A’, ‘B1’ & ‘B2’ groups and Rights renunciations.

The key regulator governing Stock Exchanges, Brokers, Depositories, Depository participants, Mutual Funds, FIIs and other participants in Indian secondary and primary market is the Securities and Exchange Board of India (SEBI) Ltd.

          

Important Links:

NSE – National Stock Exchange of India

BSE – Bombay Stock Exchange

 SEBI – Securities and Exchange Board of India

  Stock Market Trading India

5 thoughts on “Indian Stock Markets – NSE and BSE

  1. Junaid

    Hi, I’m from Pakistan, can I register for the online course on stock market trading? Will it be helpful for Pakistan stock market?

    Reply
  2. K Raghvendra

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    Request you to put of a post on “top investment ideas for 2015” or share some of the stocks in small and midcap segment that cab be potential multibaggers or wealth creators.

    Stocks which could be next Infosys, Reliance Industries, TCS and HUL.

    Regards,
    K Raghvendra
    Cochin

    Reply
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