Top 10 Differences Between NSE and BSE
November 10 2021 | Reading Time: 5 minutes
The stock exchange is a place where securities such as shares and bonds are traded among investors or traders, for raising money. The trade happens with or without the help of brokers or agents. It is an organized and regulated marketplace where financial activities such as selling, buying, and issuing of shares occur. The stock exchange enables the companies to raise money.
The organizations or investors who are planning to invest can make key decisions with the help of real-time pricing information provided by the stock exchange. But, those companies that are listed need to follow certain rules and regulations of the regulating bodies if they are planning to raise capital. The stock exchange plays an important role in building the economy of the nation, as it is a platform for selling derivatives and security debts.
BSE(also known as Bombay Stock Exchange) and NSE(or National Stock Exchange) are the two most important stock exchanges in India. We might have heard or come across BSE and NSE at some point in our life. Some of us may even know that they are somehow related to shares or bonds. However, most of us wouldn’t know the difference between NSE and BSE stocks. Now that we have a slight idea of what NSE and BSE are, we shall delve into the difference between NSE and BSE stocks.
NSE or National Stock Exchange was founded in 1992 and is comparatively the youngest stock exchange in India. But, it got its recognition as a stock exchange only in 1993. They pioneered the trading industry by introducing fully automated, electronic, and screen-based trading in India. They have provided a secure platform for trading shares and bonds, electronically, since 1995. The electronic trading system helped remove the paper-based settlement system from trading.
NSE launched their benchmark index-Nifty 50 during 1995-96. Nifty was introduced in April 1996, which tracks the 50 most highly liquid and constant trading Indian companies which are listed on NSE. You will have a clear idea of the Stock market and the economic trends if you keep a track of Nifty 50. Investors can choose the best stocks to invest in. They also provide assistance to companies for raising capital.
BSE or Bombay Stock Exchange is the oldest stock exchange, not just in India but in Asia. This is was incorporated in the year 1875 and since then they are offering high-speed trading instruments like equity, debt instruments, mutual funds, currencies, and derivatives. The Institution was founded by Premchand Roychand and it was then called The Native Share & Stock Brokers Association, which later became BSE.
Only in 1957, BSE got its recognition as a premier stock exchange from the Central Government of India. SENSEX or Sensitive Index is the benchmark index of BSE and it is the first equity index in the country.
It tracks the top 30 largest and leading companies that are listed under BSE. These companies belong to more than 10 sectors and they represent the trends in the Indian Economy and the stock market as a whole.
Now we are going to discuss the top 10 differences between NSE and BSE.
Both NSE and BSE play a very important part in the growth of the Indian Economy and thus both are very important for the development of our nation. Each day thousands of investors and brokers trade in these stock exchanges. Another interesting thing about these exchanges is that they both are located in the commercial capital of India i.e. Mumbai.
Although there are only a few differences between NSE and BSE, we have to be very sure of which one to choose, especially if you are new to investing. If you are a beginner and new to this field, it is always better to invest in BSE, whereas NSE is for seasoned investors. In case you are looking for a new company to invest in then, BSE is the best option. On the other hand, if you are a day trader or likes to take risks then NSE is more suitable for you.
NSE has very few stocks that are listed when compared to BSE which is huge. But, in terms of liquidity, NSE is preferred over BSE. Liquidity simply means the ability to covert a stock into cash with ease.
The answer to this question is very simple, yes you can buy stocks from BSE and sell them in NSE as long as you have a DEMAT account. But the question that arises here is that why would someone do it? In order to buy from BSE and sell in NSE involves a lot of risk factors. Everyone would choose security over risks.
Investors can choose where to invest according to their needs and wish. But if you are a beginner, then it is best for you to invest in BSE. BSE also has a lot of listed stocks when compared to NSE. But if you are a day trader or a seasoned investor, then NSE is the best choice for you. NSE also provides high liquidity when compared to BSE.
The organizations or investors who are planning to invest can make key decisions with the help of real-time pricing information provided by the stock exchange. But, those companies that are listed need to follow certain rules and regulations of the regulating bodies if they are planning to raise capital. The stock exchange plays an important role in building the economy of the nation, as it is a platform for selling derivatives and security debts.
BSE(also known as Bombay Stock Exchange) and NSE(or National Stock Exchange) are the two most important stock exchanges in India. We might have heard or come across BSE and NSE at some point in our life. Some of us may even know that they are somehow related to shares or bonds. However, most of us wouldn’t know the difference between NSE and BSE stocks. Now that we have a slight idea of what NSE and BSE are, we shall delve into the difference between NSE and BSE stocks.
What is NSE?
NSE or National Stock Exchange was founded in 1992 and is comparatively the youngest stock exchange in India. But, it got its recognition as a stock exchange only in 1993. They pioneered the trading industry by introducing fully automated, electronic, and screen-based trading in India. They have provided a secure platform for trading shares and bonds, electronically, since 1995. The electronic trading system helped remove the paper-based settlement system from trading.
NSE launched their benchmark index-Nifty 50 during 1995-96. Nifty was introduced in April 1996, which tracks the 50 most highly liquid and constant trading Indian companies which are listed on NSE. You will have a clear idea of the Stock market and the economic trends if you keep a track of Nifty 50. Investors can choose the best stocks to invest in. They also provide assistance to companies for raising capital.
What is BSE?
BSE or Bombay Stock Exchange is the oldest stock exchange, not just in India but in Asia. This is was incorporated in the year 1875 and since then they are offering high-speed trading instruments like equity, debt instruments, mutual funds, currencies, and derivatives. The Institution was founded by Premchand Roychand and it was then called The Native Share & Stock Brokers Association, which later became BSE.
Only in 1957, BSE got its recognition as a premier stock exchange from the Central Government of India. SENSEX or Sensitive Index is the benchmark index of BSE and it is the first equity index in the country.
It tracks the top 30 largest and leading companies that are listed under BSE. These companies belong to more than 10 sectors and they represent the trends in the Indian Economy and the stock market as a whole.
10 Difference between BSE and NSE
Now we are going to discuss the top 10 differences between NSE and BSE.
| Basis of Difference | NSE | BSE |
| Brief | NSE or National Stock Exchange is the biggest stock exchange marketplace in India. They introduced the fully automated, electronic, and screen-based trading system in India. | BSE or Bombay Stock Exchange is the oldest and the first stock exchange, not just in India but in the whole of Asia. They offer high-speed trading for their customers. |
| Date of Establishment | This Institution was founded in 1992 but got recognized in 1993. | BSE was incorporated in the year 1875 but only got recognition as a premier stock exchange from the Central Government of India. |
| Ranking | NSE holds the 11th position out of the world’s biggest stock exchanges. | On the other hand, BSE holds the 10th position among the worlds’ biggest stock exchange rankings. However, this position is under threat as NSE takes over. |
| Benchmark Index | The benchmark index of NSE is called NIFTY 50 and it tracks the 50 largest and the most liquid stocks out of the 1600+ stocks that are listed under NSE. | SENSEX is the benchmark index of BSE and it tracks the top 30 largest and leading companies that are listed under BSE. It is the first equity index of the country. |
| Network | The network of NSE is over 1500 cities. | Whereas, the network of BSE is only 450 cities. |
| Companies Listed | There are around 1700 companies that are listed under NSE. | Around 5800 companies are listed on BSE. |
| Liquidity | NSE has higher liquidity as they trade more volume compared to BSE. | When compared to NSE, BSE has low liquidity. |
| Market capitalization | The market capitalization if NSE is USD 2.27 trillion | The market capitalization of BSE is around USD 2.3 trillion |
| Products | Equity, Currency, Mutual funds, Traded funds, Security lending & Borrowing Scheme, Corporate Bonds, Initial Public Offering(IPO), Institutional Placement Program(IPP), Offer for Sale | Equity, Currency, Commodity Derivatives, Mutual funds, Traded Funds, Corporate Bonds, Initial Public Offering(IPO), Offer for Sale |
| Vision | “Continue to be a leader, establish a global presence, facilitate the financial well-being of people.” | “Emerge as the premier Indian stock exchange with best-in-class global practice in technology, product innovation, and customer service.” |
Both NSE and BSE play a very important part in the growth of the Indian Economy and thus both are very important for the development of our nation. Each day thousands of investors and brokers trade in these stock exchanges. Another interesting thing about these exchanges is that they both are located in the commercial capital of India i.e. Mumbai.
Which is better NSE or BSE?
Although there are only a few differences between NSE and BSE, we have to be very sure of which one to choose, especially if you are new to investing. If you are a beginner and new to this field, it is always better to invest in BSE, whereas NSE is for seasoned investors. In case you are looking for a new company to invest in then, BSE is the best option. On the other hand, if you are a day trader or likes to take risks then NSE is more suitable for you.
Why is NSE preferred over BSE?
NSE has very few stocks that are listed when compared to BSE which is huge. But, in terms of liquidity, NSE is preferred over BSE. Liquidity simply means the ability to covert a stock into cash with ease.
Can I buy from BSE and sell in NSE?
The answer to this question is very simple, yes you can buy stocks from BSE and sell them in NSE as long as you have a DEMAT account. But the question that arises here is that why would someone do it? In order to buy from BSE and sell in NSE involves a lot of risk factors. Everyone would choose security over risks.
In which exchange should investors transact?
Investors can choose where to invest according to their needs and wish. But if you are a beginner, then it is best for you to invest in BSE. BSE also has a lot of listed stocks when compared to NSE. But if you are a day trader or a seasoned investor, then NSE is the best choice for you. NSE also provides high liquidity when compared to BSE.
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