EDUCBA

EDUCBA

MENUMENU
  • Free Tutorials
  • Free Courses
  • Certification Courses
  • 250+ Courses All in One Bundle
  • Login

Stock Market in India – Amazing Guide To The Indian (Useful)

By Madhuri ThakurMadhuri Thakur

Home » Finance » Blog » Trading for dummies » Stock Market in India – Amazing Guide To The Indian (Useful)

Stock Market in india

Indian Stock Market – India may look like a small dot on the globe but if someone does a detailed stock market analysis, then they may find the same opportunities that they can expect from any other promising market.

Following is the article which will brief you on the Indian Stock Market.

In the Indian Stock Market, the majority of the trading takes place on its two stock exchanges market in India which are:

Start Your Free Investment Banking Course

Download Corporate Valuation, Investment Banking, Accounting, CFA Calculator & others

  1. The Bombay Stock Exchange (BSE)  and,
  2. The  National Stock Exchange (NSE)

1. The Bombay Stock Exchange (BSE)
bse

Bombay Stock Exchange (BSE) is the 11th largest stock exchange market in the world by market capitalization as on 31 December 2012. It is located on Dalal Street, of Mumbai, Maharashtra, India. It was established in 1875. It is India’s oldest Stock Exchange, and also one of Asia’s oldest stock exchanges.

BSE traces its history to 1855 when four Gujarati and one Parsi stockbroker would gather under banyan trees in front of Mumbai’s Town Hall. As the number of stock market brokers kept increasing the location of these meetings were changed many times. In 1874, the group moved to Dalal Street and in 1875 it became an official organization known as ‘The Native Share & Stock Brokers Association’.

BSE provides market for trading in

Equity
Debt instruments
Derivatives
Mutual funds

It also has a platform for stock market trading in equities of small-and-medium enterprises (SME)

  • More than 5000 companies are listed on BSE making it world’s No. 1 exchange in terms of listed members. (Source: http://www.bseindia.com).
  • The companies listed on BSE Ltd command a total market capitalization of USD 1.32 Trillion as of January 2013.
  • It is also one of the world’s leading exchanges (3rd largest in December 2012) for Index options trading (Source: World Federation of Exchanges).
  • BSE’s popular equity index – the S&P BSE SENSEX – is India’s most widely tracked stock market benchmark index.
  • It is traded internationally on the EUREX as well as leading exchanges of the BRCS nations (Brazil, Russia, China and South Africa).

Functional Timing of the BSE

The hours of operation are, in terms of the local timing which is GMT+5.30. It is functional on all days of the week except Saturday, Sundays and holidays declared by the Exchange in advance.

Popular Course in this category
Sale
All in One Financial Analyst Bundle- 250+ Courses, 40+ Projects250+ Online Courses | 1000+ Hours | Verifiable Certificates | Lifetime Access
4.9 (3,296 ratings)
Course Price

View Course

Related Courses
Cryptocurrency Training (8 Courses)CFA level 1 Course with Mock Tests & Solutions (18 Courses, 3+ Mock Tests with Solutions)Equity Research Training (17 Courses)
Session Timing
Pre-open Trading Session 09:00 – 09:15
Trading Session 09:15 – 17:00
Position Transfer Session 17:05 – 17:15
Closing Session 17:05 – 17:15
Option Exercise Session 17:07

2. The National Stock Exchange (NSE)

NSEThe National Stock Exchange of India Ltd. (NSE) was established in the mid-1990s as a demutualized electronic exchange. It is located in financial capital of India, Mumbai.

NSE has a market capitalization of more than US$989 billion and 1,635 companies listed as on July 2013. NSE’s flagship index, the S&P CNX Nifty, is used extensively by investors in India and around the world to take exposure to the Indian equities market.

It was started by a group of leading Indian financial institutions at the request of the Government of India in order to bring transparency to the Indian market, and it has a diversified shareholding comprising domestic and global investors. The exchange was incorporated in 1992 as a tax-paying company and was recognized as a stock exchange in 1993.

As per Wikipedia NSE offers trading in the following segments:

Equities

  • Indices
  • Mutual Funds
  • ExchangeTraded Funds
  • Initial Public Offerings
  • Security Lending and Borrowing Scheme

Derivatives

  • Equity Derivatives (including Global Indices like S&P 500, Dow Jones and FTSE )
  • Currency Derivatives
  • Interest Rate Futures

Debt

  • Corporate Bonds

Equity Derivatives

 

Interest Rate Futures<

Debt Market

Trading Session

Trading on the equities segment takes place on all days of the week (except Saturdays and Sundays and holidays declared by the Exchange in advance). The stock market timings of the equities segment are as follows:

(1) Pre-open session

Order entry & modification Open: 09:00 hrs

Order entry & modification Close: 09:08 hrs*

*with random closure in last one minute. Pre-open order matching starts immediately after close of pre-open order entry.

(2) Regular trading session

Normal/Retail Debt/Limited Physical Market Open: 09:15 hrs

Normal/Retail Debt/Limited Physical Market Close: 17:00 hrs

Block deal session is held between 09:15 hrs and 09:50 hrs.

(3) The Closing Session is held between 17.05 hrs and 17.15 hrs.

The Exchange may however close the market on days other than the above schedule holidays or may open the market on days originally declared as holidays.

Source: Wikipedia

Nearly all the firms of India are listed on both the exchanges, but NSE enjoys a dominant share in spot trading.

Trading Mechanism

In both the exchanges stock market trading takes place through an open electronic limit order book, in which order matching is done by the trading computer. As this process is entirely computerized, market orders placed by investors are automatically matched with the best limit orders. Sellers and buyers are not involved in direct interaction with each other as they remain anonymous. With this order driven automated system the transparency is maintained with the display of all buy and sell orders in the trading system. These orders can be placed through brokers.

Trading Mechanism

Settlement Cycle and Trading Hours

bull-bear-market_slide1The settlement time followed for Equity spot markets is T+2 rolling settlement. For example if any trade taking place on Monday, gets settled by Wednesday. All trading on stock exchanges takes place between 9:55 am and 3:30 pm, Indian Standard Time (+ 5.5 hours GMT), Monday through Friday.

The delivery of shares is done in dematerialized form, and each exchange has its own clearing house, which assumes all settlement risk, by serving as a central counterparty.

Market Indexes

The most noticeable Indian market indexes are Sensex and Nifty, Sensex being the oldest market index for equities and it includes shares of 30 firms listed on the BSE which represent about 45% of the index’s free-float market capitalization. Sensex was created in 1986 and provides time series data from April 1979, onward.

S&P CNX Nifty; includes 50 shares listed on the NSE, which represent about 62% of its free-float market capitalization. S&P CNX Nifty was created in 1996 and provides time series data from July 1990, onward.

Market Regulation

SEBIThe Securities & Exchange Board of India (SEBI) is the regulator for the Securities market in India. The responsibility of development and regulation of the stock market lies with it. It was established in the year 1988 and was given with the statutory powers in 1992.

How one can invest in India?

In India outside investments were started in 1990’s. Basically these foreign investments are classified into two categories as Foreign Direct Investment (FDI) and Foreign Portfolio Investment (FPI).

The investments in which an investor is involved in the management and operations of the company are called as FDI.  And the investments in terms of shares are treated as FPI.

If one wants to make investment in India, then one should be registered either as a foreign institutional investor (FII) or as one of the sub-accounts of one of the registered FIIs.

Foreign Institutional investors mainly consist of:

  • Mutual Funds
  • Endowments,
  • Banks
  • Asset Management etc.

Investment Opportunities for Retail Foreign Investors

Foreign entities and individuals can invest into Indian stocks through institutional investors. Investments could be made through some of the offshore instruments like,

  • Depositary Receipts like American Depositary Receipts (ADRs), Global Depositary Receipts (GDRs),
  • Exchange Traded Funds (ETFs)

As of now, you must have understood that the BSE and the NSE are the major stock exchanges in India. Also there are some regional stock exchanges in India.

Following is the list of regional stock exchanges.

Ahmedabad Stock Exchange Ltd.
Bangalore Stock Exchange Ltd.
Bhubaneswar Stock Exchange Ltd
Calcutta Stock Exchange Ltd.
Cochin Stock Exchange Ltd
Delhi Stock Exchange Ltd.,
Guwahati Stock Exchange Ltd.
Inter-Connected Stock Exchange of India Limited
Jaipur Stock Exchange Ltd
Ludhiana Stock Exchange Ltd.
MCX SX Exchange Limited
Madhya Pradesh Stock Exchange Ltd
Madras Stock Exchange Ltd.
Magadh Stock Exchange Ltd.
Mangalore Stock Exchange
OTC Exchange of India
Pune Stock Exchange Ltd
The Vadodara Stock Exchange Ltd.
U.P. Stock Exchange Limited
United Stock Exchange of India Limited

The Bottom Line

India’s emerging markets are opening the door towards bright future of stock market growth in India. Currently the percentages of investments of Indians in the domestic stock market are very less, but with the expected growth in GDP and steady financial market, more money will come into the picture.

Stock markets in India

Learn the juice of this article in just a single minute, Stock markets in India.

Recommended Articles

Here are some articles that will help you to get more detail about the Indian Stock Market so just go through the link.

  1. Stock Market Trading
  2. Marketing Concepts
  3. Stock Market Chart Patterns 
  4. Stock Market Game

All in One Financial Analyst Bundle (250+ Courses, 40+ Projects)

250+ Online Courses

1000+ Hours

Verifiable Certificates

Lifetime Access

Learn More

3 Shares
Share
Tweet
Share
Primary Sidebar
Finance Blog
  • Trading for dummies
    • Contango and Backwardation
    • How to Trade Options?
    • Dimsum Bond
    • Nostro Account
    • Temporal Method
    • Spot Market
    • Pink Sheets
    • Trading Floor
    • Pump and Dump
    • Market Maker?
    • Pre-Market Trading
    • Publicly Traded Companies?
    • Share Swap?
    • Risk Reward
    • S&P 500 PE Ratio
    • PE Ratio of Nifty
    • Sharpe Ratio
    • Bull Trap
    • Fundamental Analysis vs Technical Analysis
    • Ripple vs Bitcoin
    • Ripple vs Litecoin
    • Sell Side vs Buy Side
    • Gamma Function Formula
    • Bitcoin vs Blockchain
    • Bitcoin vs Litecoin
    • Call Option vs Put Option
    • European option vs American option
    • Futures vs Forward
    • Stop Loss Order
    • Hyperledger
    • Floating Stock
    • Option Adjusted Spread
    • Penny Stocks
    • Contango vs Backwardation
    • Investing vs Trading
    • Features Of Convertible Bonds
    • Confirmation Bias Example
    • Currency Trading
    • Indian Stock Market
    • Invest in Fundamentals
    • Futures Trading
    • Technical Analysis Indicator
    • Forex Trading
    • Commodity Trading
    • Forex Trading Strategies
    • Futures Fundamentals
    • Play the Stock Market Game
    • Binary Options Trading
    • Commodities Stock Market
    • Trading Tools
    • Mistakes to Avoid While Day Trading
    • Bitcoin vs Ethereum
    • Future vs Option
    • Option vs Warrant
    • Stock Market Trading
    • Proprietary Trading
    • Employee Stock Options
    • Litecoin vs Ethereum
    • Forex Trading For Beginners
    • Variance vs Covariance
    • Trading Securities
    • Stock Futures Trading
    • Above the Line vs Below the Line
    • Stock Market Chart Patterns
    • Swing Trading Strategies
    • Currency Exchange Market
    • Forex Brokers
  • Accounting fundamentals (658+)
  • Asset Management Tutorial (198+)
  • Banking (44+)
  • Corporate Finance Basics (248+)
  • Credit Research Fundamentals (6+)
  • Economics (44+)
  • Finance Formula (382+)
  • Financial Modeling in Excel (13+)
  • Investment Banking Basics (120+)
  • Investment Banking Careers (26+)
  • valuation basics (27+)
Finance Blog Courses
  • Online Cryptocurrency Certification
  • Online CFA Level 1 Training
  • Equity Research Training
Footer
About Us
  • Blog
  • Who is EDUCBA?
  • Sign Up
  • Live Classes
  • Corporate Training
  • Certificate from Top Institutions
  • Contact Us
  • Verifiable Certificate
  • Reviews
  • Terms and Conditions
  • Privacy Policy
  •  
Apps
  • iPhone & iPad
  • Android
Resources
  • Free Courses
  • Investment Banking Jobs Offer
  • Finance Formula
  • All Tutorials
Certification Courses
  • All Courses
  • Financial Analyst All in One Bundle
  • Investment Banking Training
  • Financial Modeling Course
  • Equity Research Course
  • Private Equity Training Course
  • Business Valuation Course
  • Mergers and Acquisitions Course

© 2022 - EDUCBA. ALL RIGHTS RESERVED. THE CERTIFICATION NAMES ARE THE TRADEMARKS OF THEIR RESPECTIVE OWNERS.

EDUCBA
Free Investment Banking Course

Corporate Valuation, Investment Banking, Accounting, CFA Calculator & others

*Please provide your correct email id. Login details for this Free course will be emailed to you

By signing up, you agree to our Terms of Use and Privacy Policy.

EDUCBA
Free Investment Banking Course

Corporate Valuation, Investment Banking, Accounting, CFA Calculator & others

*Please provide your correct email id. Login details for this Free course will be emailed to you

By signing up, you agree to our Terms of Use and Privacy Policy.

EDUCBA Login

Forgot Password?

By signing up, you agree to our Terms of Use and Privacy Policy.

Let’s Get Started

By signing up, you agree to our Terms of Use and Privacy Policy.

EDUCBA

*Please provide your correct email id. Login details for this Free course will be emailed to you

By signing up, you agree to our Terms of Use and Privacy Policy.

This website or its third-party tools use cookies, which are necessary to its functioning and required to achieve the purposes illustrated in the cookie policy. By closing this banner, scrolling this page, clicking a link or continuing to browse otherwise, you agree to our Privacy Policy

Loading . . .
Quiz
Question:

Answer:

Quiz Result
Total QuestionsCorrect AnswersWrong AnswersPercentage

Explore 1000+ varieties of Mock tests View more

Independence Day Offer - All in One Financial Analyst Bundle (250+ Courses, 40+ Projects) Learn More