National Stock Exchange
National Stock Exchange popularly know as NSE is India’s leading financial exchange which was established in the year 1992. It is presently headquartered in Mumbai. Since its inception, the private company has evolved into an advanced electronic automated system offering different trading facilities to investors in the stock market.
NSE is one of the largest stock exchange in the world. According to a report published in Business Today, NSE is the 11th largest stock exchange in the world and Indian stock exchange BSE stands 10th in the world.
The total market capitalization of NSE as of 2020 is $2.27 trillion as quoted here, and it based on this market capitalization NSE stands 11th in the world. Right from the inception in 1994, NSE has advanced a lot in different terms. The volume of trade has increased multiple folds, and it stands 4th place in the world according to the metrics of the total trading volume.
Right from the start, NSE has given importance to provide transparency in the country’s capital markets. The Exchange is backed and is run by a set of high-level financial institutions and is originally formulated by Pherwani Committee and this exchange includes a large variety of assets from not only domestic but also global investors.
Different Investment segments in National Stock Exchange (NSE)
NSE offers investment in diverse segments as mentioned before. these include
- Equity Derivatives
Equity assents comprise of Mutual funds, Equity indices, Exchange-traded funds, Security lending and Borrowing schemes, and also includes Initial public offers and so on. These are a volatile class of assets and mostly traded by the investors. These help the investor to maximize the profits.
Derivatives which are traded in National Stock exchanges including but not limited to CNX 500, Dow Jones, commodity derivatives, Interest rate futures, currency derivatives and so on. Initially, derivates segment in NSE is started in the year 2002 with the launch of Index funds. It gradually started to become the worlds largest derivates traded exchange.
This is a type of investment which primarily consists of mutual funds and exchange-traded funds and etc. and includes holdings which might differ from long term to short term bonds, securitized products, and corporate bonds and others. NSE launched India’s first debt platform in 2013 to provide investors with a liquid trading platform and transparent platform for all debt and its associated products.
Major Indices in National Stock Exchange
You might have heard about Nifty50, Nifty bank, nifty metal and others when you look at the stock market. These are the ones, that tell about the mood of the market. these indices in genera give a general picture of the movement of the market in a particular period of time.
Indices are created by the market by collecting the stocks that represent a huge part of the market or in particular a particular segment of market like Bank or Metal or IT. These are so categorized to understand the growth and fall of a particular segment in the country and tracking the economy.
The following the the indices that are listed in National Stock Exchange.
- Nifty 50 index
- Nifty 100 index
- Nifty Next 50 index
- Nifty Midcap 50 index
- Nifty Smallcap 250 index
- India Vix index
- Nifty Hybrid Composite debt
- NIFTY Fixed Income
Benefits of listing in National Stock Exchange
What does NSE offer for listing with it? The below are some of the benefits that NSE has to offer which has been developed over the period of time.
Companies can generate capital by listing in the company. The capital can be used for the expansion of the company. and also listed in National stock exchange provides for complete structural changes and increase accountability as investors from market question the operations
Volume of Trade
NSE is one of the largest traded stock markets, and it provided a platform to reduce the cost and hence helps the investors to reduce the overall cost. And also the advanced and automated trading system helps to maintain transparency with the investors and get a sense of trust in the market operations.
National Stock Exchange has developed and advanced its trading platform over the years and this comprehensive trading system is so efficient in providing a variety of trading and post-trading information to the investors. Investors have to just look at the buy and sell orders on the trading platform and the different securities r stocks that are available on its platform for the transaction.
Biggest Exchange in country
In terms of the volume of trade, NSE is the country’s largest stock exchange and also the largest in the country in terms of market capitalizations. Large investors in the country like to trade in NSE, and it has been the primary choice of an exchange for many investors. Many trading brokers by default execute orders in NSE, if not specifically changed by the Investor.
As highlighted before, NSE has over the years has developed an advanced platform which process orders at a rapid pace. for instance, in 2009 May 19th, NSE recorded a record of 11,160,392 Trades which is highest in the history of NSE in a single day.
Companies which listed their companies stock in NSE can avail the benefit of receiving the statistics of trade each month to help understand and track the performance of the stock in the exchange.
Working of National Stock Exchange
The method in which trading takes place in India is called as Electronic limit order book. This is a term which is popularly called to the process of matching a limit order with a market order in order to determine the price of the stock and its movement
There is no human interference in the general and the entire process is so automated that it happens without any person intervention. A limit order is automatically matched with a market order. When matching BUY and SELL orders and the price where both BUY price and sell price matches, their transaction takes place automatically. Hence the investor is completely anonymous. The buyer will not be able to know who sold the assets to him, or the seller will never find who bought their assets.
This process is constantly monitored by regulatory agencies to find out any discrepancies or any malpractices in order to provide just equal platform for all the investors across the country. Each and everything in NSE will proceed according to the provisions of SEBI.
This will provide additional transparency to the investors buy constantly viewing the buy and sell orders in the system. Generally, all the orders are placed via brokers who act as middlemen called as stockbrokers. Only a few investors such as Institutional investors can avail the option to directly trade with NSE, that is they get ‘Direct market access’. Remaining all has to proceed via a broker to trade in NSE.
Timings of operation of National Stock Exchange (NSE)
National stock exchange is open for trading for 5 days in a week, with Saturday and Sunday being an holyday. Trading is carried out through out the year except on Saturday, Sunday and official holydays informed by Exchange.
The following are the timings of the Market
- Pre-opening session –
- Order entry opens at 9.00 hours
- Order entry closes at 9.08 hours
- Regular session –
- The market opens at 9.15 hours
- Market closes at 15.30 hours
Read also about Bombay Stock Exchange