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Stock market for beginners: Everything you need to know about NSE and BSE

Index

1. What are Stocks- Definition and Analysis 

2. Stock market in India

a) What are BSE, NSE, and their differences

i) National Stock Exchange (NSE)

ii) Bombay Stock Exchange (BSE)

3. What is BankNifty: Why was it formed

4. Conclusion


In this article, we will dissect what a Stock is, what are the characteristics of a stock, and what Stock exchanges are there in our country. We will also learn about Nifty50.

What are STOCKS- Definition and Analysis

When you buy 10 thousand stocks of any company, you become the owner of those 10 thousand shares.

When you buy a company's stock, you're also buying a small piece of ownership of that company, called a Share. Investors purchase stocks in companies they think will go up in value.

For instance, when you buy 10,000 shares of Axis bank, you own the machinery of the company, the profits of the company and you are also a part of the loss that is incurred by the company as you have invested in it, irrespective of the capital being small or large.


If anyone wishes to buy a stock of the company, they must have a marketplace to buy the stock from, similar to how if one wishes to buy an electronic gadget, they find it at an electronic shop or a market.

Stock market in India

There are more than 20 stock markets in our country including regional and national stock exchanges, but the two major stock exchanges are BSE and NSE.

What are BSE, NSE, and their differences:

The two major stock exchanges in India are BSE and NSE.

The National Stock Exchange (NSE) and Bombay Stock Exchange (BSE) are two of the largest stock exchanges in India, known for their role in facilitating the growth and development of the country's capital market.

National Stock Exchange (NSE)

The National Stock Exchange of India Limited, commonly known as NSE, was established in 1994. It is one of the largest and most advanced stock exchanges in Asia.

Bombay Stock Exchange (BSE)

The Bombay Stock Exchange, commonly known as BSE, was established in 1875 and is the oldest stock exchange in Asia.

BSE has a significant presence in the Indian capital market, with more than 5,000 companies listed on its platform.

BSE was established in 1875 whereas NSE was established in 1992, so the Bombay Stock Exchange is around 148 years old stock exchange and the National Stock Exchange is around 30 years old stock exchange.

What is BankNifty: Why was it formed

BSE has 5000 companies that are listed with the Bombay stock exchange, and 1900+ companies are listed with the National stock exchange. It is difficult to track 1900 companies in NSE hence they selected the top and largest 50 companies from the 1900 companies and they called it Nifty 50. Hence, simply put Nifty is nothing but the average price of the 50 largest companies under BSE. In NSE these 50 Nifty50 companies are taken from different sectors. To check what companies are in there, the information is available on niftyindices.com


In conclusion, in the article, we learned what is a stock, what are the characteristics of a stock, who is the owner of the company’s stock, and what BSE and NSE are. We also dissected and learned about Nifty50.



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