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What Is the Bombay Stock Exchange (BSE)?
The Bombay Stock Exchange (BSE) is the first and largest securities market in India and was established in 1875 as the Native Share and Stock Brokers’ Association. Based in Mumbai, India, the BSE lists over 5,300 companies and is one of the largest exchanges in the world, along with the New York Stock Exchange (NYSE), Nasdaq, London Stock Exchange Group, Japan Exchange Group, and Shanghai Stock Exchange.
Key Takeaways
- Established in 1875 as the Native Share and Stock Brokers’ Association, the BSE is Asia’s first exchange.
- The BSE has been instrumental in developing India’s capital markets.
- The BSE enables investors to trade equities, currencies, debt instruments, derivatives, and mutual funds.
Trading on the BSE
In 1995, the BSE switched from an open floor to an electronic trading system. In 2024, electronic trading systems dominate the financial industry overall, offering fewer errors, faster execution, and better efficiency than traditional open-outcry trading systems.
Securities that the BSE lists include stocks, stock futures, stock options, index futures, index options, and weekly options. The BSE has helped develop India’s capital markets and provides clearing, settlement, and risk management.
The BSE’s overall performance is measured by the Sensex, a benchmark index of 30 of the BSE’s largest and most actively traded stocks covering 12 sectors. Debuting in 1986, the Sensex is India’s oldest stock index. Also called the “BSE 30,” the index broadly represents the composition of India’s entire market.
On Jan. 22, 2024, India’s stock market capitalization surpassed Hong Kong’s for the first time, making India the fourth-largest equity market globally. According to data compiled by Bloomberg, the combined value of shares reached $4.33 trillion on the exchanges in India, beating the $4.29 trillion in Hong Kong.
Dalal Street
BSE is located on Dalal Street in downtown Mumbai, India. In the 1850s, stockbrokers would conduct business under a banyan tree in front of the Mumbai town hall. After a few decades of various meeting locations, Dalal Street was formally selected in 1874 as the location for the Native Share and Stock Brokers’ Association, and the organization would eventually become the BSE.
Mumbai is a financial center in India, and Dalal Street is home to banks, investment firms, and related financial service companies. The importance of Dalal Street to India is similar to that of Wall Street in the United States.
What Are the Largest Companies Listed on the BSE?
By market capitalization, Reliance Industries LTD., Tata Consultancy Services LTD., and HDFC Bank LTD. are the top three companies on the BSE in Jan. 2024.
What Global Stock Exchanges Operate Similarly to BSE?
What Is the Largest Stock Exchange in the World?
As of Sept. 2023, the NYSE was the largest stock market in the world, boasting over $25 trillion in equity market capitalization.
The Bottom Line
The BSE was the first securities market in India, established in 1875. BSE is located on Dalal Street in downtown Mumbai, India. Dalal Street is often regarded as the Wall Street of India.