Mumbai Share Market has special significance in the overall Indian Share Market scenario. There are many regional Stock exchanges in India but the two main and most important exchanges are situated in Mumbai itself and they are National Stock Exchange (NSE) and Bombay Stock Exchange (BSE).
National Stock Exchange (NSE), headquartered in Mumbai, is the leading most stock exchange in India in terms of total volume traded. It is based in Mumbai but has its presence in over 1500 towns and cities.
National Stock Exchange got its recognition as a stock exchange in July 1993 under Securities Contracts (Regulation) Act, 1956.
NSE provides fully automated screen based trading system called NEAT system with fast, efficient and transparent transactions and the stocks are hold in a demutualised format. The risk management system of National Stock Exchange is of highest quality and can be used as a benchmark for other bourses.
The products traded in NSE are equity, stock futures, index futures, call options, put options, wholesale debt and retail debt.
NSE's leading index is Nifty 50 or popularly Nifty and is composed of 50 diversified benchmark Indian company stocks. Nifty is constructed on the basis of weighted average market capitalization method.
Bombay Stock Exchange is the oldest stock exchange not only in India but in entire Asia. BSE started functioning with the name, The Native Share and Stock Broker's Association in 1875. Government of India recognized it as a stock exchange in 1956 under Securities Contracts (Regulation) Act, 1956. All its transactions are carried out in
BSE is spread all over India and is present in 417 towns and cities. The total number of companies listed in BSE is around 3500. Bombay Stock Exchange's trading system is popularly known as BOLT (BSE's Online Trading System). It makes the trade efficient, transparent and time saving. In BSE, the trades that takes place are :-
- Equity or Shares
- Derivatives (Futures and Options)
- Debt Instruments
The products traded in NSE are equity, derivatives (stock futures, index futures, call options, put options) and debt instruments.
The main index of BSE is called BSE SENSEX or simply SENSEX. It is composed of 30 financially sound company stocks which are liable to be reviewed and modified from time-to-time. The index calculation is done on the methodology of “Free-float Market Capitalization” method. This method is also followed by the leading bourses like Dow-Jones. During early 1990s it was at 1000 mark, 5000 in 1999, and 8000 in September 2000 but at the time of writing the article (30.05.07) it is hovering around 14500. This momentum of SENSEX reflects the splendorous performance of Indian Inc. and the consequent success story of the Indian economy.
Hence, we can conclude by saying that the Mumbai Share Market is a reflection of not only the Mumbai economy but also the whole Indian market. Indian economy is growing at a rate around 8% and is expected to grow at a much faster rate in the near future. As the performance of the overall economy casts its shadow on the share markets so it is evident that the Indian bourses are going to outperform themselves in the future. So, the Mumbai Share Market is going to play a significant role in structuring the financial market of India.