Stock Market Basics: BSE, NSE, Sensex & Nifty Explained

Q: What is the difference between BSE and NSE?

BSE (Bombay Stock Exchange), established in 1875, is Asia's oldest exchange and tracks the Sensex. NSE (National Stock Exchange), founded in 1992, is India's largest exchange by trading volume and tracks the Nifty 50. Most listed Indian companies trade on both.

Q: What is the difference between Sensex and Nifty?

Sensex tracks 30 large, established companies on the BSE. Nifty 50 tracks 50 large-cap companies on the NSE. Both are benchmark indices used to gauge overall market direction, not specific stocks you can directly buy.

Q: What does SEBI do?

SEBI (Securities and Exchange Board of India) is the market regulator. It registers and oversees brokers, exchanges and depositories, enforces disclosure rules for listed companies, and works to prevent insider trading and market manipulation.

Q: How much money do I need to start investing in stocks in India?

There is no statutory minimum. You can buy a single share for whatever it costs (sometimes under Rs 500-1,000), and index-fund SIPs are available from as little as around Rs 100 a month. You do need a demat and trading account with a SEBI-registered broker first.

Quick answer: India has two main stock exchanges — BSE (tracks the Sensex, 30 companies) and NSE (tracks the Nifty 50, 50 companies). Both are regulated by SEBI, which oversees brokers and enforces disclosure rules. To actually buy shares, you need a demat + trading account with a SEBI-registered broker — there's no fixed minimum amount to start.

What the stock market actually is

A stock exchange is a marketplace where shares of publicly listed companies are bought and sold. When you buy a share, you're buying a small ownership stake in that company. Prices move based on demand and supply — driven by company results, economic news, industry trends, and broader investor sentiment.

BSE vs NSE

	BSE	NSE
Founded	1875	1992
Benchmark index	Sensex (30 companies)	Nifty 50 (50 companies)
Known for	Asia's oldest exchange	Largest by trading volume in India

In practice, most large listed Indian companies trade on both exchanges — you're not usually choosing one over the other as an investor, since your broker routes your order to whichever has the best price at that moment.

Sensex and Nifty are indices, not stocks

Sensex and Nifty aren't individual investments — they're benchmark indices that track a basket of large companies, used to gauge whether "the market" as a whole is up or down on a given day. News headlines about "Sensex up 400 points" are describing this basket's average movement, not any single stock.

Who SEBI is and why it matters

SEBI (Securities and Exchange Board of India) is the regulator that oversees the entire market — registering and supervising brokers, exchanges, and depositories, requiring listed companies to disclose financial information, and enforcing rules against insider trading and market manipulation. Any broker you open an account with should be SEBI-registered.

Getting started

Open a demat account (holds your shares electronically) and a trading account (used to place buy/sell orders) with a SEBI-registered broker.
Learn a few basic company metrics (P/E ratio, revenue growth, debt levels) before picking individual stocks.
There's no statutory minimum investment — single shares can cost under Rs 500-1,000, and index-fund SIPs are available from roughly Rs 100/month.

Go deeper: Understanding the Stock Market course

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Frequently asked questions

What is the difference between BSE and NSE?

BSE (1875) tracks the Sensex; NSE (1992) tracks the Nifty 50 and has India's largest trading volume. Most large companies list on both.

What is the difference between Sensex and Nifty?

Sensex tracks 30 BSE-listed companies; Nifty 50 tracks 50 NSE-listed companies. Both are market-direction benchmarks, not individual investments.

What does SEBI do?

Regulates brokers, exchanges and depositories; enforces disclosure rules; polices insider trading and manipulation.

How much money do I need to start investing in stocks in India?

No statutory minimum — you need a demat + trading account, and can start with a single share or an index-fund SIP from around Rs 100/month.

This is general financial education, not investment advice. Facts on exchange history, index composition, and SEBI's role summarized from public exchange and regulator information as of August 2026. For investment decisions, consult a SEBI-registered advisor.

Stock market basics: BSE, NSE, Sensex and Nifty explained