NSE Share Market

NSE Share Market

With the liberalization of the Indian economy, the need to lift the financial sector in India to international standards was seen. Thus, on the recommendations of the high powered Pherwani Committee, The National Stock Exchange (NSE) was established in November 1992, but was recognized as a share market in April 1993. The NSE share market was promoted by the following leading financial institutions of the country:

  • IDBI
  • IFCI
  • LIC
  • SBI
  • ICICI Bank
  • IL & FS Trust Company
  • SHCI
  • SBI Capital Markets
  • Bank of Baroda
  • Canara Bank
  • GIC
  • NIC
  • The New India Assurance Company
  • The Oriental Insurance Company
  • United India Insurance Company
  • PNB
  • Oriental Bank of Commerce
  • Indian Bank
  • Union Bank of India
  • IDFC

The NSE market is the nation’s largest share market in terms of daily turnover and trading volumes in both – equity shares trading and derivatives trading segment. The NYSE Euronext and Goldman Sachs have taken a stake in the NSE. The NSE share market was instrumental in setting up of the National Securities Clearing Corporation Ltd. it also co-promoted the setting up of the first depository in India - National Securities Depository Ltd.

  • Equity Shares
  • Futures and Options
  • Retail Debt Market
  • Wholesale Debt Market
  • Currency futures
  • NSE brings an integrated share market trading network across the nation
  • Investors can trade at the same price from anywhere in the country using NSE intraday tips since inter-market operations are streamlined coupled with the countrywide access to the NSE share market
  • Delays in communication, late payments and the malpractice’s prevailing in the traditional trading mechanism can be done away with greater operational efficiency and informational transparency in the share market operations, with the support of total computerized network
  • Trading members
  • Participants

Recognized members of NSE are called trading members who trade on behalf of themselves and their clients. Participants include trading members and large players like banks who take direct settlement responsibility. NSE market was the first to introduce a systematic process of member inspections, a sophisticated market surveillance system and a country wide high capacity data network supporting close to 2,00,000 dealer terminals. On an average, the daily turnover in equity shares trading segment on the NSE is close to 17,000 crore. The daily turnover in the derivatives segment on the NSE is close to Rs 55,000 crore. The NSE also conducts training and certification programmes for the general public. The NSE is also the first share market to allow trading in ETFs in India

The primary index of the NSE is the S&P CNX Nifty. The S&P CNX Nifty is an index consisting 50 NSE shares from 21 sectors of the economy. The NSE market has 8 other indices representing different sectors of the market. These include:

  • S&P CNX DEFTY (the Dollar-linked version of the Nifty)
  • S&P CNX 500
  • CNX NIFTY JUNIOR (the most liquid NSE shares other than the constituents of S&P CNX Nifty)
  • CNX IT
  • CNX 100T

The NSE has a system called the National Exchange Automated Trading (NEAT) system which supports an order driven share market, wherein orders match on the basis of time and price priority