National Stock Exchange – NSE

The National Stock Exchange of India (NSE) is India’s leading financial exchange headquartered in Mumbai, Maharashtra. The NSE was incorporated as the primary stock exchange in 1992. It was created in line with recommendations from leading financial experts and the government-appointed Pherwani committee. The exchange platform offers trading services to investors across India. As of 2015, NSE had the 4th largest trading volume among global stock markets.

NSE allows traders to invest in domestic as well as global securities. It was the first Indian stock exchange to make electronic trade accessible to investors all over. NSE’s market capitalization in 2018 was recorded at $2.25 trillion, making it the 11th largest stock exchange in the world. NSE has 7800 companies listed on its exchange platform, with 4000 trading on the Indian market. Share market trading contributes 4% of India’s GDP.

How does the NSE operate?

When investors place an order to buy or sell securities on the market, it is carried out via the ‘electronic limit order book’ method. Market orders are automatically matched with limit orders via computers. The process does not require any intervention from specialists or market makers. Thus, the buyers’ and sellers’ identities remain anonymous. 

The stock exchange operates with transparency as every buy or sell order is displayed on the trading system. These orders are placed on the platform indirectly via brokers. A few traders have direct access meaning they can place orders directly into the trading system.

Operational days and timings

The NSE is operational from Monday to Friday except on Saturdays, Sundays, and other listed holidays. The market timings are as follows:

1. Pre-opening session: Order entry opens at 9 am and closes at 9:08 am.
2. Regular session: The market opens at 9:15 am and closes at 3:30 pm. 

Nifty 50 is the flagship index of the NSE. It constitutes 63% of the NSE’s total market capitalization. Nifty 50 includes 12 different sections of the economy under 50 variable stocks. 

The segments of NSE

The different avenues via which investment and trading are carried out on the NSE are:

1. Equity: Equity comprises volatile assets which provide a high return for investors on the market. Examples of equity include Mutual funds, Exchange-traded funds, Equity, Indices, Security lending and borrowing scheme, etc. 
2. Equity derivatives: NSE started trading in equity derivatives in 2002 when it launched the index feature. In 2011, it started trading derivative contracts on the world’s most-followed index, Dow Jones Industrial Average and S%P 500. Examples of equity derivatives include global indices like Dow Jones, CNX 500, and currency derivatives, 
3. Debt: Examples of Debt trading and investment segment includes Mutual Funds, Exchange-traded funds, corporate bonds, securitized product, etc. 

Primary indices in NSE

An index of a stock market is created by a collection of stocks representing the complete stock exchange or a part of it. Important indices of the NSE include

1. Nifty 50 index
2. Nifty 100 index
3. Nifty Next 50 index
4.  Nifty 50 Midcap index
5. Nifty Smallcap 250 index
6. India Vix index

Companies listed on NSE in terms of their market capitalization

Name of the company	Market capitalization (in Cr)
Reliance	870,174.70
TCS	767,681.63
HDFC	354,145.17
Infosys	328,515.21
Kotak Mahindra	307,037.57
ICICI Bank	281,198.85
Bajaj Finance	233,044.98
SBI	228,380.81
Larsen	199,937.28
Axis Bank	195,509.98

The benefits of listing with NSE

1. Transparency: Everything is available on the trading system, from information on trade and post-trade details to buy and sell orders. Transparency allows investors to be thoroughly informed about the stock exchange. 
2. Economic feasibility and convenience: With the volume of trading high on the NSE, the expense cost for the traders is affordable. The automated trading system makes it easy and efficient to trade.  
3. India’s premier stock exchange: NSE is India’s largest stock exchange platform, with a market capitalization greater than $2.25 trillion. 
4. Quick responsiveness: The quick responsiveness of the trading system allows traders to buy and sell securities at the best prices. 
5. Track trade statistics: Companies listed on the NSE can track their monthly performance. The NSE provides the data.