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Evolution of India’s Stock Market: Key Milestones & Insights

The Indian share market has a fascinating history that demonstrates the nation’s journey of economic growth and development. For investors, understanding this evolution can offer valuable insights. From its humble beginnings on the streets of Bombay to becoming one of the world’s largest stock exchanges, India’s stock market has transformed in ways that have shaped its identity and promise for investors. Let’s dive into the history of the stock market in India, its key milestones, and how it became the thriving centre of online share trading and investment it is today.

What Exactly is the Share Market?

Before we get into the history, let’s start with the basics of stock market india. The share market, or stock market, is a place where shares of publicly listed companies are bought and sold. When you invest in shares, you’re buying a small piece of ownership in a company, giving you a stake in its growth. This market lets companies raise funds for expansion, while giving investors the chance to earn returns.

The Beginnings: India’s Stock Market in the 19th Century

India’s journey with stock trading started over a century ago, with informal trading in Mumbai (then Bombay). The formal foundation was laid in 1875 when the Bombay Stock Exchange (BSE) was established, thanks to the vision of businessman Premchand Roychand. He and a group of stockbrokers launched what would become the heart of India’s financial market. BSE started small, with fewer than 350 members, but quickly expanded as the investment opportunities it offered became apparent. This moment marked a critical step in India’s financial journey, laying the groundwork for a more organised and structured market.

Key Milestones in evolution of Stock Markets

As the BSE grew, India’s stock market saw the rise of other exchanges. A major breakthrough came with the launch of the National Stock Exchange (NSE) in 1992, which introduced modern practices like electronic trading. This move streamlined clearing and settlement, making trading faster and more efficient, attracting millions of investors. Today, the NSE and BSE dominate the Indian stock market and are instrumental in supporting everyday trading and investment activities for people across the country.

For those looking to begin their trading journey, finding the best trading app in India is crucial. Many apps offer real-time market insights, helping investors make informed decisions quickly, which aligns with the fast-paced nature of today’s stock market.

Liberalisation and the 1990s Boom

The 1990s marked a new era. India’s economic liberalisation in 1991 opened up the economy to foreign investments, revamping industries and sparking massive growth in sectors like IT and telecommunications. Companies like Infosys and Wipro became global names, putting Indian tech stocks on the world map. This was also when the Securities and Exchange Board of India (SEBI) was established in 1992, bringing much-needed regulation and building investor trust by cracking down on fraud and manipulation.

Even after the global financial crisis of 2008, India’s stock market rebounded swiftly, helped by reforms like relaxed FDI norms. This resilience built confidence in India’s status as a promising emerging market powerhouse.

Rise of Online Share Trading

The late 1990s and early 2000s saw technology taking over the trading world. Online platforms and trading software made it possible to trade from home, allowing individuals to manage investments independently. Today, almost all share trading app have democratised the market further, making it easy for anyone with a smartphone to trade on BSE or NSE. These apps empower investors to buy and sell shares, track market trends, and handle portfolios with ease.

Is India’s Stock Exchange an organised market?

Absolutely. Both BSE and NSE are highly organised and regulated entities, with SEBI acting as the market watchdog. SEBI’s oversight ensures that exchanges operate transparently and fairly, protecting investors while maintaining the market’s integrity. This robust regulatory framework has helped the Indian stock market evolve into one of the most dynamic and well-regulated markets globally.

Basic tips for investing in the Indian Stock Market

Do your Research

Before investing, dive into the company’s fundamentals, like financial health and growth potential. Investor presentations, annual reports, and other resources can help give a solid background. Rather than relying on random advice or influencers, one must do their studies and then make investing decisions in share market trading.

Diversify your Portfolio

Don’t put all your eggs in one basket. Spreading investments across sectors helps reduce risks. If you invest in multiple stocks and some do well while some do poor, the net impact on your income is good.

Define your goals

Share market investments are ideal for both short and long-term goals, but understand your time horizon to guide your decisions. It shouldn’t happen that you need funds in the short run, however, you invest in shares which don’t do well in the short run and you lose your capital.

Stay Informed

Markets can be volatile, and prices shift daily. Monitoring trends and news is essential for timely decisions. Global as well as domestic events, policy changes can have a major impact on stock prices and eventually on your portfolio.

Making Investing Simple

Share market app which is accessible on your phone has transformed the investment landscape by offering real-time access to the market. With features like price alerts, insights, and tracking tools, they cater to everyone from beginners to experienced investors, making trading as easy as a few taps on a screen.

Conclusion

India’s share markets have come a long way from a simple trading setup to a sophisticated financial ecosystem. What started with the Bombay Stock Exchange in 1875 is now a cornerstone of the country’s economy.

With innovations like online trading and accessible investing tools, participating in the market has never been easier. So, if you’re interested in building wealth, the stock market offers an exciting avenue. Ready to start? 

Opening Demat Account with a trusted provider like HDFC Sky could be your first step into the world of stock market investing!

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