So if you are planning for wealth creation and are among those who get puzzled seeing the red and green arrows on share prices, then probably you are looking for what is BSE and NSE.
BSE or Bombay Stock Exchange (BSE) is situated at the Dalal Street in Mumbai, Maharashtra. BSE was established in 1875 and it is the world’s fastest stock exchange with a median trade speed of 6 microseconds.
On BSE more than 5500 companies are publicly listed
NSE: National Stock Exchange of India Limited (NSE) is the leading stock exchange of India, located in Mumbai, Maharashtra. NSE was established in 1992 as the first dematerialized electronic exchange in the country. NSE was the first exchange in the country to provide a modern, fully automated screen-based electronic trading system which offered easy trading facilities to investors spread across the length and breadth of the country. Vikram Limaye is Managing Director & Chief Executive Officer of NSE. (Source: Wikipedia)
NSE’s index, the NIFTY 50, is used extensively by investors in India and around the world as a barometer of the Indian capital markets. The base year is taken as 1995 and the base value is set to 1000.
Nifty and Sensex: Broadly, Nifty and Sensex are stock exchanges indices that measure the performance of the stock market. Before we move any further let us understand what an Index is. As we now know that since there are thousands of companies listed on the stock exchange. Therefore, it is very difficult to gauge the movement of single stock to evaluate the market performance at the time. Therefore, a smaller sample is taken which is the representative of the whole market. This sample is called Index. The Index is calculated from the prices of selected stocks.
Sensex, also called BSE 30, is the market index consisting of 30 well-established and financially sound companies listed on Bombay Stock Exchange (BSE). These 30 companies are selected on the free-float market capitalization and are from different sectors. The base year of Sensex is 1978-79 and the base value is 100.
If the Sensex goes in red then it means that stock prices of most of the major stocks on the BSE have gone down. If Sensex goes up, it means that most of the major stocks in BSE went up during the given period.
