The largest financial market in India is the National Stock Exchange of India Limited (NSE). The NSE, which was founded in 1992 and is now a sophisticated electronic market that ranks fourth globally in terms of equity trading volume, has grown since its incorporation. The wholesale debt market was introduced in 1994, and shortly after that, a cash market segment.
Additionally, it was the first stock exchange in the nation to introduce electronic trading capabilities, which made it easier to unite investors from all over the nation under one roof.
On the list of the largest stock exchanges in the world as of April 11, 2023, the NSE’s total market capitalization was approximately USD 3.26 trillion, placing it in ninth place.
However in India, this sector only accounts for 12–14% of the country’s overall GDP, in contrast to the USA, where trading from the corporate sector accounts for about 70% of the country’s GDP. 4000 of the approximately 7800 listed companies in this entire corporate sector trade on Indian stock exchanges. Thus, only 4% of the nation’s GDP is attributable to stock market trading.
KEY TAKEAWAYS
- The largest financial market in India and the fourth-largest market in terms of trading volume is the National Stock Exchange of India Limited (NSE).
- The first exchange in India to offer contemporary, fully automated electronic trading was the National Stock Exchange of India Limited.
- In India, the NSE is the biggest private wide-area network.
- The NSE was the first electronic limit order book to trade derivatives and ETFs, making it a pioneer in the Indian financial markets.
Functions of NSE
The NSE was created with the express purpose of carrying out the following duties:
- Establishing a national trading platform for debt, hybrid, and equity instruments.
- Granting fair access to investors nationwide via a strong communication network.
- Investors have access to a fair, effective, and transparent securities market when using electronic trading systems.
- Enabling book entry settlement systems, quicker settlement cycles, and compliance with current global securities market standards.
How Does NSE Stock Exchange Work?
An electronic limit order book is used for trading on this Indian stock exchange, and a trading computer executes order matching. Orders are the only thing driving this entire process; neither experts nor market makers are involved.
A limit order is automatically matched with a market order when investors place one. As a result, both buyers and sellers in this market can remain anonymous.
A market that is driven by orders also gives investors greater transparency because all buy and sell orders are displayed in the trading system. These orders are placed on the NSE through stockbrokers, who frequently offer their clients an online trading platform.
Few institutional investors can place their orders directly into the trading system using this “direct market access” facility.
The equities segment of the NSE market is open for trading every day of the week, barring Saturdays, Sundays, and other holidays declared by the stock exchange. Following is the timing:
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
- The market closes at 15.30 hours
The Nifty50, which represents about 63% of the total market capitalization listed under it, is the NSE’s flagship index. This index includes 50 variable stocks and roughly 12 economic sectors.
Currently, Vikram Limaye serves as the CEO and Managing Director of the stock exchange, and Ashok Chawla serves as the Chairman of the Board of Directors.
Benefits of the NSE
The National Stock Exchange is a top venue for businesses getting ready to list on a significant exchange. Greater transparency in trade matching and the settlement process is encouraged by the sheer volume of trading activity and the use of automated systems.
This alone may increase market visibility and bolster investor confidence. Utilizing cutting-edge technology also makes it possible for orders to be filled more quickly, increasing liquidity and ensuring accurate pricing.
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