Thursday, October 23, 2008

Stock Exchanges in India

A Stock Exchange is the place where investors go to buy/sell their shares. You know what an Equity share is. Pls refer to Equity Shares for more details.

Once a company's public offering is complete, it gets listed in a stock exchange. After listing it would be available for trading to all investors in the stock exachanges where they are listed. In India we have two major stock exchanges. They are:

1. The National Stock Exchange (NSE) &
2. The Bombay Stock Exchanges (BSE)

National Stock Exchange:

The NSE is India's largest and the worlds third largest stock exchange in terms of Transaction volumes & amounts. The NSE is based out of Bombay. The NSE has set up its trading platform as a nation-wide, fully automated screen based system. This enables anyone in any part of the country to trade on shares listed in the NSE.

The NSE is based on a demutualized model wherein the ownership, management & trading rights are managed by three different group of people. This is to ensure that there is no conflict of interest among the stake holders.

NSE was set up with the objectives of:

1. Establishing a nationwide trading facility for all types of securities
2. Ensuring equal access to all investors across the country through an appropriate telecommunication network
3. Providing fair, efficient & transparent securities market using electronic trading system
4. Enabling shorter settlement cycles and book entry settlements
5. Meeting International benchmarks and standards

NSE Index or NIFTY:

The NSE Index or the Nifty Index as it is popularly known, is the index of the performance of the 50 largest & most profitable, popular companies listed in the index. Each company that is part of the index has its own weightage in the value of the Index. The value of the Nifty Index is the weighted average of the prices of these 50 companies.

To know about the 50 company's that comprise this Nifty Index "Click Here"

Bombay Stock Exchange:

The BSE is the oldest stock exchange in Asia. It is situated in Dalal Street in Mumbai. It is the third largest stock exchange in south Asia and the tenth largest in the world. BSE has over 5000 companies that are listed in it. The objectives of the BSE are similar to that of the NSE. BSE also uses the latest technologies in the IT field to provide a single place where traders from across the world can buy/sell shares in the Indian share market.

BSE Index or SENSEX:

The BSE Index or the Sensex as it is popularly known, is the index of the performance of the 30 largest & most profitable, popular companies listed in the index. Each company that is part of the index has its own weightage in the value of the Index. Since the number of companies is lesser, the index variations are higher when compared to the Nifty index.

To know about the 30 company's that comprise this Sensex Index "Click Here"


Hope you got a basic idea about the two major stock exchanges in India. Happy reading...

16 comments:

  1. hey anand i am 18 yr guy wanna know about these stocks n stuff ...nice blog of urs thank u

    ReplyDelete
  2. Anand,

    Thank you for the details on the Stock exchanges and the Equity Shares. All the best for your project.

    Priyam Soneji

    ReplyDelete
  3. thanks anand keep it up.

    give us more knowledge about small cap, mid cap etc. also about major tips of dealing in share market.
    amitjindal4u@gmail.com

    ReplyDelete
  4. thank you so much for the good advice

    ReplyDelete
  5. It is very useful

    ReplyDelete
  6. THANX DUDE...none of d sites were this much clear about 'what nifty is'...thank u so so much anand sir ..may god bless u

    ReplyDelete
  7. Anand,
    BSE has 30 companies listed and not 20. I think this was a Type as I can see there is a list of 30 companies in the link :)

    Correct it please :)

    John

    ReplyDelete
    Replies
    1. Hi John,
      Thanks for pointing it out. Yes it was a typo error and SENSEX is comprised of 30 co's but there are thousands of company's listed in BSE.

      Anyways - typo mistake rectified.

      Anand

      Delete
  8. sir plz say me how can i open account in share market

    ReplyDelete
    Replies
    1. Anonymous
      You cannot open an account in the share market. You can open a DEMAT Account with any DEMAT provider like ICICI, HDFC etc and then using that account you can trade shares.

      Visit any ICICI or HDFC branch and ask toopen a DEMAT Account and they will help you with all the formalities.

      Anand

      Delete
  9. Is it necessary to have a broker to buy and sell shares ?

    ReplyDelete
  10. Thank you Mr. Anand.
    but I have 1 query..please solve it:
    why two exchanges i.e BSE and NSE?
    How they differ from one another?

    ReplyDelete
    Replies
    1. They are actually very similar in terms of what they do or how they operate. Companies can get listed in either or both exchanges. So, I cant really explain how they are different because - they are very very similar

      Delete
  11. We daily hear that bse closed at 25000 or nifty at 5000.what actually it means and how it affect a common man who don't have any shares..?

    ReplyDelete
    Replies
    1. Anonymous - If you do not own any shares or mutual funds, then the market numbers actually have NO IMPACT on you.

      Delete

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