Stock Exchanges

National Stock Exchange

The NSE (National Stock Exchange) and BSE (Bombay Stock Exchange)

If in any case you are connected to stocks or stock market then you must be having some basic idea about the stock exchanges and surely you must have came across these names NSE and BSE. NSE and BSE are the largest Stock Exchanges in India. The stocks of big and famous companies in India are listed either in NSE or BSE, or sometimes in both.

NSE: It is the biggest stock exchange in India and also world’s 3rd largest stock exchange in terms of transactions. The NSE has quickly grown to its prominence since its creation in 1992. The NSE has nearly 1700 listings and a market capitalization of $1.4 trillion. The NSE is very active and its transparency for frauds is considered better than BSE. Its Claim to fame is that it is the largest stock exchange in India in terms of daily turnover and number of trades. The CEO of NSE is Vikram Limaya who has resigned from a Supreme Court-appointed BCCI committee.

BSE: It is the oldest stock exchange in Asia established in 1875. The BSE is the biggest Stock Exchange, its long life span has resulted in having more than 5400 listings and a market capitalization of more than $1.6 trillion. Its claim to fame is that it is the oldest stock exchange in India. The CEO of BSE is Ashish Chauhan who is also a Distinguished Visiting professor at Ryerson University, Toronto, Canada.

Listing and Indices

Why listing? Listing means formal admission of a security to the trading platform of the Exchange. The main goal of listing is to provide liquidity to securities and mobilizing people’s savings for economic development. There are various compliances to be made to list securities under the stock exchange like complying with Companies Act, 1956, SCRA and guidelines provided by SEBI.

Now where are they indexed or showed or displayed? The main index of BSE is SENSEX and the main index of NSE is NIFTY. These indexes are the indicators of how the companies listed under the stock exchange are doing and their market position as depicted by the value of their Share Value.

Trading Mechanism

Everything Is Electronic here now, trading at both of these Stock Exchanges is also electronic and an investor just need to quote the price for the particular stock and when the price will be matched with the best price of the buyer and seller then the transaction will be completed. The advantage of this order-driven process is anonymity. All orders in the trading system are placed by the brokers and they also provide online trading facility to retail customers.

Settlement cycle and trading hours

Trading on the equities segment takes place on all days of the week (except Saturdays and Sundays and holidays declared by the Exchange in advance). The market timings of the equities segment are:

(1) Pre-open session

  • Order entry & modification Open: 09:00 hrs
  • Order entry & modification Close: 09:08 hrs

(2) Regular trading session

  • Normal/Retail Debt/Limited Physical Market Open: 09:15 hrs
  • Normal/Retail Debt/Limited Physical Market Close: 15:30 hrs

Restriction and Investment ceiling

The Govt. of India is taking progressive steps day by day and has been trying to attract investments in the Domestic market. There is an issue over the FDI across various sectors but the Govt. of India is taking progressive steps to ease the investment in Indian market. There is also a restriction on FII’s and a certain limit has been prescribed in various sectors. Please check the latest FDI list and the limit for more information.