MUMBAI -- India's third stock exchange began trading Monday, competing for market share in a country where the number of small investors in shares is still low.
The MCX-SX started trading in equities and derivatives, with blue chip stocks such as oil explorer Reliance Industries and State Bank of India being among the first shares traded.
The Mumbai-based exchange has several local banks as shareholders and its flagship index will be the SX40 made up of 40 large-cap stocks representing a cross-sector of the economy.
India's investment community is hopeful that the MCX-SX can help reduce trading costs by spurring competition among India's three bourses to reduce the cost of brokerage membership fees.
They also hope that the exchange will create new investment products.
The launch of the MCX-SX will provide "us an opportunity to contribute in development of India's capital market", Jignesh Shah, vice-chairman of the new exchange, said in a statement.
Indians — largely seen to be risk-averse — have traditionally preferred to invest in gold and property rather than in equities and derivatives.
Only five out of 100 people invest in the stock markets directly or through mutual fund schemes, regulatory data shows.
The National Stock Exchange based in Mumbai (formerly Bombay) was set up by local financial institutions in 1994 with government backing and quickly became a rival to the Bombay Stock Exchange.
The NSE is now India's biggest exchange with the value of shares traded totaling $526 billion last year, according to industry data.
That is triple the value of shares traded on the BSE, Asia's oldest exchange which dates from 1875 when brokers first started trading under banyan trees.
Copyright Agence France-Presse, 2013
