NSE recorded almost 145 crore equity trades on its platform last year, a gain of 3% from 2012, making it the biggest among 51 global peers, according to data with the World Federation of Exchanges (WFE).
Rival exchange BSE slipped one place to eighth position. Although it has more than 4,000 listed companies, the BSE recorded 34.46 crore trades last year, a drop of 3% compared to 2012.
China's Shenzhen Stock Exchange recorded 129 crore trades, climbing three places to become the second-largest bourse in the world. Trades on the Shenzhen SE, which pushed NYSE Euronext to third place, rose 38% from 2012.
Another Chinese bourse, the Shanghai Stock Exchange, moved up to fourth place from sixth in 2012, while the Nasdaq dropped two places to fifth.
Others in the top 10 include Korea Exchange (6th), Japan Exchange Group - Tokyo (7th), Canada's TMX Group (9th) and London SE Group (10th).
The combined equity trade volume of NSE and BSE rose by almost 2% to 179.4 crore in 2013.
Globally, the number of equity trades rose 6.6% to 1,045 crore. The Asia Pacific region witnessed a gain of 13.7% to 660.6 crore.
According to experts, the positive trend in equity trades was bolstered by steps taken by the government and the Reserve Bank of India as well as sustained foreign institutional investment besides the global economic recovery.
"No doubt, the year 2013 will be remembered as the renaissance of equities as the financial crisis ended, while the year 2014 should see the end of the economic crisis bringing more opportunities for the market participants," SMC Global Securities Associate Analyst Kamla Devi said.
"Despite Fed's decision to taper its bond buying programme by USD 10 billion, the buying rally continued in the market," she added.
Echoing the view, CNI Research CMD Kishor Ostwal said: "The rise in equity...Is for three reasons -- one, global rally; two, expectation of policy decisions post-general election of 2014, and three, the rate cycle is peaking and very soon can start reversing."
About 60 crore trades were recorded on the Japan Exchange Group - Tokyo, 71.4% more than in 2012.
"The Japanese economy has seen a remarkable turnaround on the back of Abenomics, Prime Minister Shinzo Abe's three-pronged strategy for Japan's economy. Driven by a renewed inflow of foreign capital on the prospects of Abe's economic policies, the equity markets surged with the remarkable gains," Devi said.
"China's Shenzhen Stock Exchange also has performed well on the back of the government announcement for far-reaching economic and social reforms," she noted.
Experts believe that 2014 would further stimulate the bulls in the stock market as better economic conditions are likely to prevail.
"...The gap between mid cap, small cap and large cap has increased to a level which suggests huge action in mid cap and small cap stocks, going forward," Ostwal said.
"The general election results, which so far is in favour of BJP, too is driving investors," he added.
According to Devi, with "improving market conditions and investor confidence coming into place, trading volumes at the bourses are expected to see a decent rise, improving the depth and breadth of the market."