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Understanding the Indian Stock Market

India’s stock market is divided into two major stock exchanges – National Stock Exchange of India (NSE) and Bombay Stock Exchange of India (BSE). Most of the share trading in the Indian equity market takes place on these two stock exchanges.

Stock Exchanges in India

The BSE, Asia’s first stock exchange, was established in 1875.

  • BSE is one of the world’s fastest stock exchanges, with a median trade speed of 6 microseconds.
  • It is the world’s 11th largest stock exchange with an overall market capitalization of $1.83 Trillion as of March 2017.
  • Publicly listed BSE companies hold the count of more than 5500.

The NSE, on the other hand, was founded in 1992 and started trading in 1994, as the first demutualized electronic exchange in the country.

  • It was the first exchange in the country to provide a modern, fully automated screen-based electronic trading system.
  • The NSE has a total market capitalization of more than US$1.41 trillion, making it the world’s 12th-largest stock exchange as of March 2016.

Both exchanges – BSE and NSE – follow the same trading mechanism, trading hours, settlement process, etc.

Market Indexes in India

Indian Stock Market

Sensex and Nifty are two of the prominent market indexes in India.

The Sensex, also known as S&P BSE Sensex or S&P Bombay Stock Exchange Sensitive Index or BSE 30, is a free-float market-weighted stock market index of 30 well-established and financially sound companies listed on Bombay Stock Exchange.

Sensex represents about 45 per cent of the index’s free-float market capitalization.

The S&P CNX Nifty or Nifty 50 or simply Nifty is NSE’s benchmark stock market index for Indian equity market. It was launched on April 21, 1996. It is owned and handled by India Index Services and Products Limited (IISL), which is a solely owned subsidiary of the NSE Strategic Investment Corporation Limited.

Market Regulation

Indian Stock Market

The Securities & Exchange Board of India (SEBI) manages the overall responsibility of development, regulation and supervision of the stock market in India. SEBI was formed in 1992 as an independent authority to lay down market rules in line with the best market practices.

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