The Indian Stock Market, sometimes also known as the share market is the trading place for buying and selling shares of various companies and organizations. The Indian stock market consists of many stock exchanges, prominent of which are the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE). SEBI has listed 7 operating stock exchanges in India including BSE and NSE. The Indian stock market is underdeveloped and is still developing to be a stable market. Unlike the US or the UK, the Indian stock market is still volatile and unstable. Although not all might agree on the statement, many experienced investors share the view. Even though the Indian stock market is volatile and unpredictable, there is a lot of opportunity for growth in it.
The National Stock Exchange or NSE is the leading stock exchange of India, located in Mumbai along with BSE. The NSE was established in 1992 while BSE has been in existence since 1875. The NSE has a market capitalization of 2.27 trillion USD, making it the 11th largest stock exchange worldwide as of April 2018. NIFTY50 is the NSEs flagship index launched in 1996. NIFTY50 is used by many investors extensively and also by the world to measure the Indian capital markets. However, it is estimated that stock exchanges account for only 4% of the Indian economy or GDP. Unlike developed countries like the US where 70% of GDP is accounted for by the corporate sector, the Indian corporate sector accounts for only 12-14% of the Indian GDP.
Many of Indian stock exchanges offer investments in equities, indices, mutual funds, derivatives, IPOs, corporate bonds, and much more. The order entry opens at 9:15 hrs IST and closes at 15:30 hrs IST. The pre-open starts at 9:00 hrs IST and goes on till the open time for modification and closes at 9:08 hrs IST. There are around 8,000 listed companies in the Indian market of which 5,000 are listed in the BSE while its rival NSE has around 1,600 listed companies. Of all the listed companies in the BSE, only 500 firms constitute over 90% of its capitalization. The rest is made up of highly illiquid shares.
Most of the significant firms in India are listed on both BSE and NSE. The NSE enjoys a monopoly in derivates trading with a 98% share in this market. Both exchanges allow for arbitrageurs, keeping the prices on them at a very tight range. The trading takes place from 9:15 AM to 3:30 PM IST, Monday through Friday. Saturday and Sunday are off days, and no trading takes place on those days.
Foreign investments have been promising for most of the investors, and many foreign investors see India as a growing market, and foreign investments have been increasing ever since their conception. The stock market of India is by no means stable, but it is one of the fastest-growing markets second only to China. Hence, there seems to be a lot of scope for future investors in India.