Difference Between BSE and NIFTY of India

Sep 5, 2022 · 3 min read ·

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BSE vs NIFTY of India

Both, BSE and Nifty, are being terms related to Indian stock exchanges, it would be worthwhile knowing the difference between BSE and NIFTY of India to understand the their economy. BSE means Bombay Stock Exchange while Nifty refers to the National Stock Exchange Index (NSEI). BSE (Bombay Stock Exchange) and NSE (National Stock Exchange) are the largest stock exchanges in India and most trading are done with them. The key difference between BSE and NSE are their stock indexes; Sensex and Nifty, respectively. BSE and NSE, with their respective indexes, are representations of how good or bad the Indian economy is performing.

What is Nifty?

Nifty, construed as National (N-) Fifty (-ifty) or the Standard & Poor’s CRISIL NSE Index 50 or S&P CNX Nifty is the leading stock index of the National Stock Exchange for large companies in India. It is composed of the stock index of 50 companies accounting for 23 sectors of India’s economy, and about 60% of the total market capitalization of the National Stock Exchange. Because of that, it offers investment managers greater exposure to the Indian market in just one portfolio. It is used for index funds, index based derivatives, benchmarking fund portfolios and a variety of other purposes. The base value of the index has been set at 1000.

What is BSE?

The Bombay Stock Exchange is one of India’s major stock exchanges, as well as Asia’s oldest stock exchange. With over 5000 listed companies whose equity market capitalization total is about $1.63 trillion as of December 2010, it is 4th largest stock exchange in Asia and the 9th in the world. BSE’s Sensex (Sensitivity Index) is a way to measure its overall performance and is composed of 30 companies across the various sectors and is considered as the pulse of the domestic stock markets in India.

What is the difference between BSE and NIFTY?

While it is sufficient to look at BSE’s list, NSE offers another perspective on the Indian economy with Nifty. Both BSE and NSE give you a good idea from which you can make an informed decision with regards to India’s markets and the economy. As BSE is a stock exchange itself while Nifty is the index of NSE, we cannot really compare BSE with Nifty. Therefore, comparisons have to be made between the exchanges, BSE and NSE themselves as well as their indexes, SENSEX and NIFTY.

The BSE, being the biggest stock exchange in India, is the go-to stock exchange if you want to have a good idea about the status of India’s economy. NSE provides a good idea as well, but more companies are listed in the BSE.

Nifty, NSE’s stock index, is composed of 50 of the largest companies trading in NSE while Sensex are 30 of the largest companies in BSE’s list. This makes Nifty more representative of the market because of its broader base, as compared to Sensex.

Summary:

BSE vs NIFTY of India

• BSE means Bombay Stock Exchange, India’s biggest and oldest stock exchange with over 5000 companies trading through it.

• National Stock Exchange or NSE is also one of India’s biggest stock exchange, located in Delhi.

• Between the two, BSE and NSE, NSE account for the majority of India’s equity trading.

• Nifty, short for National Fifty, is NSE’s leading stock index and is composed of 50 of the largest companies trading in the NSE.

• Sensex, BSE’s stock index, is composed of the top 30 companies trading in the BSE.