National Stock Exchange, popularly referred to as the NSE, is the stock exchange that has, more than any other institution, mirrored India’s journey into the equity cult. It began operating as a platform for equity trading in November 1994, when the market economy in India began taking baby steps, thanks to the collaboration of Prime Minister Narasimha Rao and Finance Minister Manmohan Singh. In the next 3 decades, the exchange has not only tracked the growth of the equity markets and the prosperity of India Inc but has also taken the equity markets to the drawing and bedroom of the Indian middle-class and beyond, catalysing thereby the funding requirements of an economy possessed by the animal spirits of growth and the hunger for capital.
While becoming the bridge between the Indian common man show shared the dreams of India Inc and the industry, the NSE has come to mirror the aspiration of the Indian entrepreneur as the economy of the country drew on that profit-making journey as the Indian economy went from strength to strength to emerge as the fifth largest. As Indian leaders are dreaming of turning the third biggest economy in a few years, NSE will be a vital spoke of the wheel that is trying to turn faster and faster.
Sixth largest in the world
NSE has the distinction of being the sixth largest stock exchange in the world in terms of market capitalisation. Nothing fewer than 20 crore investors – who could have formed the fourth most populous nation in the world – trade in it every day. NSE market cap has surpassed $5 trillion, though the GDP is yet to touch that milestone (now $5.29 trillion). In the past few years, Nifty returns have eclipsed all the major exchanges of the world. Ahead of NSE are Tokyo Stock Exchange, Shanghai Stock Exchange, NASDAQ and New York Stock Exchange, which is the biggest.
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Better returns than NYSE
Nifty50, has given a return of 11.79% in 2024 and 26.38% in the past 1 year. New York Stock Exchange has provided returns of 14.32% and 24.42% in the corresponding period. The returns by Nasdaq stood at 23.53% (current year) and 35.33% (in one year) respectively. On the other hand, the Shanghai stock exchange has lagged far behind at 10.46% and 7.96% respectively.
History in F&O
The futures and options segment of NSE has attracted global attention. The F&O segment offers trading in Nifty 50 Index, Nifty IT Index, Nifty Bank Index, Nifty Next 50 Index and single stock futures. Trading is also available in Mini Nifty Futures & Options and Long Term Options on Nifty 50. During FY14, the average daily turnover in the F&O segment of the exchange was $18 billion. On May 3, 2012, NSE launched derivative contracts (futures and options) on FTSE 100, the most widely tracked index of the UK equity stock market. This was the first of its kind index of the UK equity stock market launched in India.
Quickly overtook BSE
NSE started with the wholesale debt market segment on 30 June 1993 and the equity segment on 3 November 1994. It was the first exchange in India to introduce electronic trading facility. Within a year of its launch, the daily trade volumes on NSE exceeded that of BSE. On 12 June 2000, NSE launched the derivatives segment. After 8 years, i.e. in August 2008, NSE launched currency derivatives.
