Stock Markets
1. What is a Stock Market?
- A stock market is a platform where buyers and sellers trade shares of publicly listed companies.
- It is a part of the capital market that helps companies raise long-term funds.
- In India, the two major stock exchanges are NSE (National Stock Exchange) and BSE (Bombay Stock Exchange).
2. Key Facts & Figures
| Parameter | BSE | NSE |
|---|---|---|
| Established | 1875 (Asia’s oldest) | 1992 |
| Headquarters | Mumbai | Mumbai |
| Index | Sensex (30 stocks) | Nifty 50 (50 stocks) |
| No. of Listed Cos. | ~5,400 | ~2,100 |
| Market Cap (Mar 2024) | ≈ ₹290 lakh crore | ≈ ₹280 lakh crore |
| Electronic System | BOLT (1995) | NEAT (1994) |
3. Milestone Dates & Events
| Year | Event |
|---|---|
| 1875 | BSE founded as “Native Share & Stock Brokers Association” |
| 1986 | Sensex (Sensitivity Index) launched |
| 1992 | NSE incorporated; Harshad Mehta scam surfaced |
| 1993 | NSE recognized as stock exchange |
| 1995 | BSE switches to screen-based trading (BOLT) |
| 1996 | Nifty 50 launched |
| 2000 | Derivatives trading starts (Nifty futures) |
| 2010 | BSE introduces currency derivatives |
| 2016 | Nifty 50 crosses 9,000 mark first time |
| 2021 | NSE glitch on 24 Feb halted trading for 4 hrs |
| 2024 | India becomes 4th largest equity market by m-cap |
4. Regulatory Bodies & Abbreviations
| Abbreviation | Full Form | Role |
|---|---|---|
| SEBI | Securities & Exchange Board of India | Regulator (est. 1988; statutory 1992) |
| IRDAI | Insurance Regulatory & Development Authority | Regulates insurance companies’ investment norms |
| RBI | Reserve Bank of India | Regulates banks’ investment exposure |
| NSDL | National Securities Depository Ltd. | First electronic depository (1996) |
| CDSL | Central Depository Services Ltd. | Second depository (1999) |
| FMC | Forward Markets Commission | Merged with SEBI in 2015 |
5. Important Indices (Quick Table)
| Index | Constituents | Managed by |
|---|---|---|
| Sensex | 30 blue-chip cos. | BSE |
| Nifty 50 | 50 large-cap cos. | NSE Indices Ltd. |
| Nifty Bank | 12 largest banks | NSE |
| Nifty IT | 10 IT stocks | NSE |
| BSE Mid-cap | 100 mid-size cos. | BSE |
| Nifty Next 50 | 50 stocks after Nifty 50 | NSE |
6. One-Liner Revision Facts
- Sensex base year 1978-79 = 100; Nifty base year 1995 = 1,000.
- T+2 rolling settlement introduced in India in 2003.
- Demat account holds shares in electronic form.
- IPO = Initial Public Offering; FPO = Follow-on Public Offering.
- Bull market = rising prices; Bear market = falling prices.
- Market cap = Share price × Total no. of shares.
- India’s first IPO by Indian Oil in 1964 (pre-reform).
- SME platform of BSE = BSE SME; NSE = EMERGE.
- Circuit breaker halts trading if index moves ≥ 10/15/20 %.
- NSE’s Nifty 50 weightage: Reliance ≈ 11 % (highest as on Mar 2024).
7. 15+ MCQs for Railway Exams
Click to view MCQs with answers
-
Which is the oldest stock exchange in Asia?
A) NSE
B) BSE
C) Tokyo SE
D) Shanghai SE
Ans: B -
Sensex comprises how many stocks?
A) 50
B) 30
C) 100
D) 25
Ans: B -
Nifty 50 is managed by
A) BSE
B) SEBI
C) NSE Indices Ltd.
D) RBI
Ans: C -
In which year did NSE commence trading?
A) 1991
B) 1992
C) 1994
D) 1995
Ans: C -
Who regulates the Indian stock market?
A) RBI
B) IRDAI
C) SEBI
D) PFRDA
Ans: C -
The base year for Sensex is
A) 1980-81
B) 1978-79
C) 1984-85
D) 1990-91
Ans: B -
Which of the following is a depository?
A) SEBI
B) NSDL
C) BSE
D) NSE
Ans: B -
The first electronic depository in India was
A) CDSL
B) NSDL
C) SEBI
D) RBI
Ans: B -
T+2 settlement means settlement occurs
A) Same day
B) Next day
C) Two working days after trade date
D) Within a week
Ans: C -
A market with rising stock prices is called
A) Bear market
B) Bull market
C) Pig market
D) Stag market
Ans: B -
The highest weight in Nifty 50 (Mar 2024) is of
A) TCS
B) HDFC Bank
C) Reliance Industries
D) Infosys
Ans: C -
Which index tracks banking stocks?
A) Nifty IT
B) Nifty Bank
C) Sensex PSU
D) BSE 100
Ans: B -
The Harshad Mehta scam is associated with
A) 2001
B) 1992
C) 1986
D) 1998
Ans: B -
Forward Markets Commission was merged with
A) RBI
B) SEBI
C) IRDAI
D) PFRDA
Ans: B -
India’s first IPO by a government company was
A) ONGC
B) IOC
C) GAIL
D) NTPC
Ans: B -
BSE SME platform is meant for
A) Large-cap companies
B) Small & medium enterprises
C) Foreign companies
D) PSU disinvestment
Ans: B -
Circuit breaker is triggered when Nifty moves
A) 5 %
B) 10 %
C) 2 %
D) 25 %
Ans: B (first level) -
Which of the following is NOT an index of NSE?
A) Nifty 50
B) Nifty Next 50
C) Sensex
D) Nifty IT
Ans: C -
The term “Demat” stands for
A) Demand Materialization
B) Dematerialization
C) Demand Maturation
D) Demand Management
Ans: B -
Which city hosts both BSE & NSE headquarters?
A) New Delhi
B) Kolkata
C) Mumbai
D) Chennai
Ans: C
8. Quick Reference Infographic (Text Mode)
BSE vs NSE
┌-------------┬-------------┬-------------┐
│ Feature │ BSE │ NSE │
├-------------┼-------------┼-------------┤
│ Born │ 1875 │ 1992 │
│ Index │ Sensex │ Nifty 50 │
│ Tech │ BOLT │ NEAT │
│ Listed cos. │ ~5,400 │ ~2,100 │
└-------------┴-------------┴-------------┘
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