When we imagine a picture going back to the 19th century, when stock trading in India would take place under a banyan tree in Mumbai. Hard to believe, but this is actually how the Indian stock market began! Today, The Journey Of The Indian Stock Market turns into a humongous financial ecosystem flocked by millions of traders, investors, and companies. But how did we arrive here?
Let us traverse the enthralling saga of The Journey Of The Indian Stock Market from the communitarian arrangements with the Bombay Stock Exchange to a new-age technology-driven exchange known as the National Stock Exchange.
Our story starts in 1875 when a group of 22 stockbrokers came together under a banyan tree in Mumbai's Dalal Street to establish what was to come to be the Bombay Stock Exchange (BSE). It was an informal arrangement, but it laid the foundation for the first official stock exchange in India. Over time, the BSE was established in a formalized manner; in 1956, it came to be recognized under the Securities Contracts (Regulation) Act.
For more than a century, BSE ruled undivided in the Indian stock trade. In 1986, it introduced India's first-ever stock index and termed it SENSEX (Sensitive Index). The SENSEX takes into consideration 30 large and actively traded stocks and is now a barometer of the Indian economy. A rise in SENSEX meant good days; however, a drop would signal the investors to brace for impact!
But even this great institution had its challenges. The greatest challenge was, ironically, the lack of transparency and automation. The BSE traded through an open outcry floor, where brokers shouted their bids and offers into the trading arena. The system, which was chaotic and inefficient on its best days, left gaps for manipulation and scams, most notably the one in 1992, led by Harshad Mehta, which shattered the investors' trust in BSE and provided a concrete basis for an urgent call for reform.
Amidst all such loopholes in BSE's functioning, the National Stock Exchange (NSE) was set up in 1992, commencing its operations in 1994. The NSE was a breath of fresh air; it came with an electronic trading system, and no physical trading floor was required. Trading was now conducted through the NCC, with investors placing their orders online for an efficient and speedy transaction. Honesty was the soul of this new system.
This annihilation of large traders' influence created a fair environment for trading. The NSE fast gained credibility for its anonymous order-matching system whereby buyers and sellers traded without knowing the other's identity; it had scuttled all claims of big traders' influence and thus helped develop a level playing field for trade.
In addition, it pioneered the NIFTY 50 index, a parameter for tracking the 50 largest companies within various sectors. This, however, provided a broader and diversified picture of the Indian stock market compared to the SENSEX.
With NSE’s rise, the Indian stock market witnessed an intense rivalry between the two exchanges. BSE had a legacy, but NSE had technology. The introduction of online trading meant investors could trade from anywhere, and this gave NSE a massive edge.
To stay relevant, BSE also went digital and launched BOLT (BSE Online Trading) in 1995. However, by then, NSE had already captured a significant market share. Currently, NSE dominates in terms of trading volumes, while BSE remains significant for its historical value and listings.
Today, India's stock market is one of the fastest-growing in the world. Stock market investments show signs of increased popularity with growing numbers of retail investors and discount brokers, and the public is now getting enthusiastic about mutual funds without being in the severest minority.
The future looks even more exciting. Using advanced technologies such as AI-driven trading, blockchain use, and even enhanced financial inclusion, stock trading will be coming out as an even more efficient and affordable option for every citizen of India.
From shouting brokers under a banyan tree to seamless trading at the click of a button, The Journey Of The Indian Stock Market has come a long way. Whether you’re an investor, a trader, or just an observer, its history is a testament to resilience, innovation, and evolution.
So, what’s next? Will India’s stock market rival global giants like the NYSE or Nasdaq? Only time will tell. But one thing’s for sure – the journey of the Indian stock market is far from over. It’s just getting started!
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Go and watch to avoid problems and learn about the stock market with exact logic and strategies!
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Read MoreAs a prominent Stock Market Trainer, Ruchir Gupta provides training in various stock market tactics through his specialised courses.
At Ruchir Gupta Training Academy, we can train a beginner into a pro trader in just one month. We use the highly proven GCD (Date, Direction and Target) method, which significantly enhances accuracy in identifying market trends and targets. With our comprehensive training approach, you'll gain the skills and knowledge needed to earn from the stock market successfully.
What sets us apart is our commitment to providing personalized attention and guidance to each student via the support team. We prioritize individual learning needs and tailor our approach accordingly. We provide online trading courses so you can learn at your own pace. Additionally, Sir Ruchir Gupta brings his own extensive experience to the table, ensuring that you receive top-notch mentorship.
Yes, absolutely. We believe in providing support and guidance to each student. Our support team is always there ensuring that you receive the assistance you need to succeed. Whether you're a beginner or an experienced trader, we're here to help you reach your goals.
Students enrolled in our share trading course have access to a wide range of recorded video lessons and scanners designed to enhance their learning experience. Apart from these students are also provided with a mighty community and telegram group where they can interact with their fellow learners of the course and enhance their knowledge.
Yes, we have numerous success stories and testimonials from previous students who have greatly benefited from our courses. Many of our graduates have gone on to become successful traders and investors, thanks to the knowledge and skills they acquired at Ruchir Gupta Training Academy. You can read some of their inspiring stories on our website.
