What are the stock exchanges operating in India?

The Indian stock markets are a huge market in the world both in terms of number of participants and in terms of volume of trades. It is a big ecosystem comprising of many regional stock exchanges and two primary stock exchanges. The share market today is a vibrant ecosystem with traders, investors, foreign investors, hedgers, arbitrageurs, high net worth individuals, institutional investors all operating through online stock trading. The Indian stock market allows for trade in different instruments like equity shares, mutual funds, exchange traded funds, commodities, derivatives, bonds etc.

Since 1994, the Indian stock market today has moved away from the public outcry system to trade in securities to an electronic screen-based system. This electronic system has ensured anonymity of buyers and sellers and trades getting executed without manual interventions. The market for spot trades follows a T+2 settlement which means settlement 2 days after the date of transaction. The market hours are from 9am to 3:30pm on weekdays except public holidays. The currency market and commodity market are open for 24 hours in a day. Each exchange has their own order matching system which matches buy and sell orders based on the price and then based on the quantity.

Primarily, there are two main stock exchanges operating in the Indian stock market; the BSE and the NSE.

Bombay Stock Exchange (BSE):

The Bombay Stock Exchange or BSE is the oldest stock exchange in Asia. It was set up in 1875 at Dalal Street, Mumbai. It is the world’s 10th largest stock exchange by market capitalization. Trades on the BSE used to take place using the public outcry system where brokers would call out the prices for their shares and the trades would take place through physical exchange of share certificates and cheques. However, this has been replaced by electronic screen-based trading since 1995. BSE has its own order matching mechanism called BOLT which is used by traders to key in their orders. BOLT does electronic order matching.

Derivative trading was introduced on BSE in 2000 and since then, the exchange offers trades in futures and options. Currencies can also be traded on the BSE.

sensex meaning? BSE developed the S&P BSE Sensex in the year 1986 which comprises of the top 30 companies on the BSE by market capitalization. Apart from that, there are different sectoral indices like BSE IT, BSE Banking, BSE PSU etc. It also operates the BSE Midcap and BSE Small cap indices.

BSE is a listed share. It is listed on the National Stock Exchange and can be bought and sold through that exchange.

National Stock Exchange (NSE):

The National Stock Exchange was set up in the year 1992 and it introduced screen based electronic trading in the country and the country’s eventual shift from public outcry system to demat based online trades. NSE is the world’s 11th largest stock exchange by market capitalization. It developed and operates the Nifty index which tracks the companies listed on NSE. Nifty meaning? Some of the popular indices are Nifty 50, Nifty Midcap, Nifty Bank, Nifty IT etc.

The main motive of the NSE was to improve transparency in the financial markets by making price discovery more streamlined and available to every investor in all parts of the country. NSE offers trades in equity, equity derivatives, currency derivatives, debt and commodity derivatives. NSE has also set up National Securities Depository Ltd or NSDL which provides depository services in the country along with CDSL. NSE also has its own proprietary order matching mechanism.

Maithili Pawar is a finance professor. She has written on share market basics. Through this article, she has provided detailed information on stock market.