A stock exchange is a marketplace where stocks (shares of companies) are bought and sold. It’s a platform that connects buyers and sellers, allowing them to trade stocks and other financial instruments like bonds and derivatives. The stock exchange ensures that trading is done in a fair, transparent, and orderly manner.
Major Stock Exchanges in India
- Bombay Stock Exchange (BSE)
- Founded: 1875
- Location: Mumbai
- Index: The main index of BSE is the SENSEX (Sensitive Index), which tracks the performance of the top 30 companies listed on the exchange.
- Significance: BSE is one of the oldest stock exchanges in Asia and has a large number of listed companies.
- National Stock Exchange (NSE)
- Founded: 1992
- Location: Mumbai
- Index: The main index of NSE is the NIFTY 50, which includes the top 50 companies across different sectors.
- Significance: NSE is the largest stock exchange in India by trading volume and is known for its advanced technology and electronic trading system.
How It Works:
- Listing: Companies that want to raise money can list their shares on a stock exchange by offering them to the public in an Initial Public Offering (IPO).
- Trading: Once listed, these shares can be bought and sold by investors. The prices of shares on the exchange fluctuate based on supply and demand.
- Settlement: After a trade is made, the exchange ensures that the buyer receives the shares and the seller gets the money.
In Summary:
A stock exchange is where people trade shares of companies. In India, the major stock exchanges are the BSE and NSE. The BSE’s main index is the SENSEX, while the NSE’s main index is the NIFTY 50.
