Summer Internship Project On

A STUDY ON STOCK MARKET PERFORMANCE OF MAJOR

INDICES OF BSE
submitted for the partial fulfillment of the requirement of the
degree of
POST GRADUATE DIPLOMA IN MANAGEMENT (PGDM)
Approved by
All India Council of Technical Education (AICTE)
Submitted by
GAUTAMI SUNIL SURYAVANSHI
Roll No: 102
Specialization: Finance

Submitted To

SASMIRA’S BUSINESS SCHOOL

(SBS) SARSMIRA MARG, WORLI, MUMBAI.
JULY, 2022
 DECLARATION BY THE CANDIDATE

I GAUTAMI SUNIL SURYAVANSHI hereby certify that the work which is being presented in this
Summer Internship Project Report entitled. “A Study on Stock Market Performance of Major
Indices of BSE” in partial fulfillment of the requirement for the award of the Degree of Post
Graduate Diploma in Management and submitted to the Sasmira’s Business School, Sasmira Marg,
Worli, Mumbai, is an authentic record of my own carried out during a period from 5th May 2022, till
7th July, 2022 at Finlatics under the guidance of DR. PASHMEEN KAUR ANAND assistant
professor.

The matter presented in this project report has been not been submitted by me for the award of any
other degree of this or any other Institute.

Wherever references have been made to intellectual properties of any individual / Institution /
Government / Private / Public Bodies / Universities, research paper, text books, reference books,
research monographs, archives of newspaper, corporate, individual, business / Government and any
other source of intellectual properties viz, speeches, quotations, conference, proceedings, extracts
from the website, working paper, seminal work et al, they have been clearly indicated, duly
acknowledged and included in the Bibliography.

Name of the Student:

Signature of the Student:

This is to certify that the above statement made by the candidate is correct to the best of our
knowledge.

Signature of Supervisor:

Name of Supervisor:

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II
CERTIFICATE BY THE COMPANY

3
III
 CERTIFICATE

This is to certify that MS. GAUTAMI SUNIL SURYAVANSHI is a bonafide student of the two-
year full-time Post Graduate Diploma in Management (PGDM), (Finance), Roll No.102 of the
institute. As a part of All India Council of Technology (AICTE) guidelines, the students have
carried out the Summer Internship Project ‘’A Study on Stock Market Performance of Major
Indices of BSE’’ at Finlatics during the period from 5th May 2022 to 7th July 2022 under my
guidance
in partial fulfillment of requirement for the completion PGDM as prescribed by the All India of
Technical Education (AITCE).
This Summer Internship Project Report is the record of authentic work carried out by her during the
period from May 2022 to July 2022.

Name & Signature of Name & Signature of Name & Signature

(Faculty Supervisor) (Placement Coordinator) (Dean)

Place:

Date:

IV4
 ACKNOWLEDGEMENT

This project has been a great learning experience for me. I take this opportunity to thank Prof.
Pashmeen Kaur Anand, my internal project guide whose valuable guidance & suggestions made
this project possible. I am extremely thankful to her for her support. She has encouraged me and
channelized my enthusiasm effectively.

I express my heart-felt gratitude towards parents Mr. Sunil Suryavanshi & Mrs. Asawari
Suryavanshi, sibling and all those friends who have willingly and with utmost commitment helped
me during the course of my project work.

I also express my profound gratitude to Dr. Kamal Tandon sir, Director of Sasmira’s Institute of
Management studies & Research and our Dean Dr. Sanskruti Kadam for giving me the
opportunity to work on the projects and broaden my knowledge and experience.

I would like to thank all the professors and the staff of Sasmira’s Business School Institute
especially the library staff who were very helpful on providing books and articles I needed for my
project.

Last but not the least, I am thankful to all those who have indirectly extended their co-operation and
invaluable support to me.

V5
 ABSTRACT
This internship report is based on experience as a intern at Fincrux Technologies Services Limited.
This report is divided into five chapters, first deals with introduction about BSE market, history,
causes, importance, measures, market performance, factors affecting volatility, needs and
significance, nature and scope.

The second chapter of the report deals with literature review of the study which has industry profile,
company profile, literature reviewed by different people related to my topic, swot analysis of
company, organizational structure.

The third chapter of the report deals with research methodology which includes problem
identification, methodology, purpose of study, background of study, investors perspective.

The fourth chapter of the report deals with data description and discussion which deals with the
analysis of questionnaire.

The last chapter of the report deals with conclusion and findings of the research and also the
limitations, suggestions and recommendations are covered.

Fincrux Technologies Services Limited is a private company in finance domain

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VI
 List of Charts

Chart No. Chart Title Page No.

1 PIE CHART - 1 27

2 PIE CHART - 2 28

3 PIE CHART – 3 29

4 PIE CHART – 4 30

5 PIE CHART – 5 31

6 PIE CHART – 6 32

7 PIE CHART – 7 33

8 PIE CHART – 8 34

9 PIE CHART - 9 35

10 PIE CHART - 10 36

11 PIE CHART - 11 37

12 PIE CHART - 12 38

13 PIE CHART - 13 39

14 PIE CHART – 14 40

15 PIE CHART - 15 41

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VII
 CONTENTS
Chapter Chapter Details Page No.
No.
I Title Page I

II Candidate’s Declaration II
III Certificate by the Company III
IV Certificate by the Institute IV
V Acknowledgement V

VI Abstract / Executive Summary VI

VII List of Charts VII

1 INTRODUCTION 1-8

1.1 Background 1-2

1.2 Need and Significance of the Study 3-5
1.3 Nature and Scope for the Study 5-6
1.4 Aims and Objectives of Study 7
1.5 Types of Trading 7-8

2 LITERATURE REVIEW 9-20

2.1 Industry Profile 9-10

2.2 Company Profile 10

2.3 Board and Mission 11

2.4 Consulting Board 12
2.5 Organizational Structure 13
2.6 Specific Details of the Department 14-16
2.7 Review 17-20

3 RESEARCH METHODOLOGY 21-25

3.1 Problem Identification 21

3.2 Methodology of Research 21
3.3 Data Collection 22

3.4 Data Analysis Tools and Techniques 22-24

3.5 Trading Process 24-25
3.6 Sampling 25

4 DATA DESCRIPTION & ANALYSIS 26-40

5 SUMMARY & CONCLUSION 41-46

5.1 Findings & Conclusions 41

5.2 Learnings from the Study 42-43

5.3 Strengths of the Study 43-44

5.3 Limitations of the Study 44

5.4 Future Scope of Research 45-46

VIII REFERENCES VIII

IX BIBLIOGRAPHY IX

X Annexure X - XIII

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A Study on Stock Market Performance of Major Indices Of BSE

Chapter One: - Introduction

1.1 Background
A stock exchange or stock market is a physical or digital place where investors can buy and sell
stock, or shares, in publicly traded companies. The price of each share is driven by supply and
demand. The more people want to buy shares, the higher the price goes. Less demand, and the price
of a share drops.
The first modern stock trading was created in Amsterdam when the Dutch East India Company was
the first publicly traded company. To raise capital, the company decided to sell stock and pay
dividends of the shares to investors. Then in 1611, the Amsterdam stock exchange was created.
Reading about the stock market, you encounter names like the Dow Jones Industrial Average and
the S&P 500 Index. These are two of the stock market’s most famous benchmarks, or barometers
that try to capture the performance of the whole market and even the whole economy.

Founded in 1896 by Charles Dow and Edward Jones, the Dow is a price-weighted average. That
means stocks with higher price-per-share levels influence the index more than those with lower
prices. The Dow is made up of 30 large, U.S.-based stocks. It was designed as a proxy for the
overall economy.

The Dow’s 12 initial components were mainly industrial companies, such as producers of gas,
sugar, tobacco, oil, as well as railroad operators. It has since gone through many changes and now
includes technology, healthcare, financial and consumer companies. General Electric was one of the
original Dow members. Meanwhile, Procter & Gamble was added in 1932 and remains in the
benchmark today.

Meanwhile, the S&P 500 was created in 1923 by Henry Barnum Poor’s company, Poor’s
Publishing. It began by tracking 90 stocks in 1926. Standard & Poor’s was founded in 1941, when
the company merged with Standard Statistics.

Today, the S&P 500 is a market-cap-weighted index, meaning companies whose market value is
larger have a bigger influence. Market value or market cap is calculated by multiplying the price-
per- share by the number of shares outstanding. More so than the Dowor other gauges like the
Russell 2000 Index, the S&P 500 has become synonymous among investors with the stock market.

The Indian stock market traces its history back to the late 18th century when the trading floor was
under the shade of a sprawling banyan tree opposite the Town Hall in Mumbai. A few people would

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meet under this tree to informally trade in cotton. This was mainly due to the fact that Mumbai was
a busy trading port and essential commodities were traded here often.

The Companies Act was introduced in 1850 following which investors started showing an interest
in corporate securities. The concept of limited liability also put in an appearance around this time.
By 1875, an organization known as ‘The Native Share and Stock Broker’s Association’ came into
being. This was the predecessor of the BSE. In 1894, the Ahmedabad Stock Exchange came into
being primarily with the objective of enabling dealing in the shares of textile mills in the city.

The Calcutta Stock Exchange was formed in 1908 with the intention of facilitating a market for
shares of plantations and jute mills It was in 1920 that the Madras Stock Exchange took shape. In
1957, the BSE was the first stock exchange to be recognized by the Government of India under the
Securities Contracts Regulation Act. The SENSEX was launched in 1986 followed by the BSE
National Index in 1989.

The Securities and Exchange Board of India (SEBI) was constituted in 1988 to monitor and regulate
the securities industry and stock exchanges. In 1992 it became an autonomous body with
completely independent powers.

In 1992, the NSE was formed as the first demutualized electronic exchange in the country with the
intention of ensuring transparency in the markets.

NSE began operations in the Wholesale Debt Market (WDM) segment in 1994, the equities
segment in 1994, and the derivatives segment in 2000. It was in 1995 that the BSE made the switch
to an electronic system of trading from the open-floor system.

In 2015, SEBI was merged with the Forward Markets Commission (FMC) with the aim of
strengthening regulation of the commodities market, facilitating domestic and foreign institutional
participation.

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1.2 Need and Significance of Study

The majority of people turn to the performance of a country’s stock market as the best indicator of
how well that economy is doing. Stock markets cover all industries across all sectors of the
economy. This means they serve as a barometer of what cycle the economy is in and the hopes and
fears of the population who generate growth and wealth.

Stock markets have existed for centuries and will no doubt go on being the main public, regulated
marketplaces where people can buy and sell shares of different companies.

The stock exchange is the mirror of the economy of any country. It helps industries and commerce
to develop a country. In this regard the importance of stock exchange is massive. To make a country
economically strong and dynamic there is no alternative to the stock exchange. If stock markets did
not exist, companies would have to resort to borrowing from the bank to raise money for expansion.
This would be a burden on the company as they would have to repay the loans with interest.

Fortunately, with stock markets, businesses have the ability to create an initial public offering and
raise large amounts of cash without having to worry about repayment. Moreover, publicly traded
companies have no obligation to pay dividends when they incur losses.

One of the most important benefits of the stock market is its ability to help generate personal wealth
in the economy. For the individual investor, the stock market provides a way to invest your income
to earn a share of the companies’ profits. The revenue they earn can increase spending in the
economy that can have a multiplier effect. The increased spending by individuals leads to increased
investment and employment.

The stock market gives opportunities to businesses and the public to transfer capital and ownership
in a controlled, secure and managed environment.

In addition to providing a convenient way for companies to raise capital and for individuals to
increase wealth, the stock market helps keep a check on corporate regulation and increases the
economic growth and prosperity of the nation.

Capital raised this way can help companies expand operations and create jobs in the economy. From
a greater economic perspective, consumer spending increases, governments can benefit from tax
revenues and there will be lower levels of unemployment. The importance of the stock exchange
are:
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Formation of capital: To form the capital for industries, it plays the key role. Though banks and
other financial institutions help to form capital but among them stock exchange is vital for
collecting long-term huge capital.

Inspiring savings: Stock exchanges inspire individuals to reducing current consumption and
inspire to increases savings. By this means individuals can be benefited and thus the industries as
well.

Improving living standard: It creates attractive investment sectors for the mass people. One can
gain easily by investing his savings in the market. Thus, the stock market helps in improvement of
living standard of general people.

Proper valuation of share and security: It has specific rules for valuation for the stocks and
securities. It publishes the daily transaction from that the investors can be aware of the price of
shares and securities.

Proper utilization of savings: Stock exchange helps the proper utilization of savings of general
people. It brings the savings and form capital for the companies, thus utilizes properly the savings.

Strong economic base: It helps industrialization through mobilization of resources. Thus, it makes
the economy strong. For a strong economy, the industrial development is essential and the stock
exchange act here effectively.

Safety of investment: It secures the investment. Stock exchange maintains rules and regulation to
guard the market against fraudulence.

Role of an Economic Barometer: Stock exchange serves as an economic barometer that is

indicative of the state of the economy. It records all the major and minor changes in the share
prices. It is rightly said to be the pulse of the economy, which reflects the state of the economy.

Making the public aware of equity investment: Stock exchange helps in providing information
about investing in equity markets and by rolling out new issues to encourage people to invest in
securities. Also, one of the major benefits of investing in the stock market is that investors get the
chance to earn more money.

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Over time, if the stock market rises in value, the prices of a particular stock can rise or fall.
However, investors who have put their money in stable companies will see profit growth. Afterall,
the stock exchange is an important economic institution. It helps both the investors and the
companies for mutual benefits. It deals with great importance to the development of the economy of
a country.

1.3 Nature and Scope of the Study: -

The Scope of study is to analyze the overall performance of various sectors in BSE. Analyze the
latest trend in major sectors by tracking the change in market-cap of individual sectors daily,
quarterly, monthly, half-yearly and year-to-date. You can track it with the advance-decline graph of
stocks plotted according to the change in market-cap contribution in their sector along with an
absolute count of stocks advancing or declining. It helps in viewing the current status of global
stock markets and sectors, and access the latest news and research reports.

Today, electronic trading systems dominate the financial industry overall, offering fewer errors,
faster execution, and better efficiency than traditional open-outcry trading systems. Securities that
the BSE lists include stocks, stock futures, stock options, index futures, index options, and weekly
options. Making money is everyone’s dream but people often get scared by the risks. Stock Market
is one such field where a person having its knowledge is prepared to take a calculated risk which in
return gives him a profit multiplied by manifolds.

It is the perfect platform that provides you the in-hand services regarding the financial planning and
helps you to get the best in return according to your current financial situation. It focuses on the
way you see the stock marketing and changing the perspective of an individual to understand it
properly.

Investing in many different stocks can help build your wealth by leveraging growth in different
sectors of the economy, resulting in a profit even if some of your individual stocks lose value.

The BSE's overall performance is measured by the Sensex, a benchmark index of 30 of the BSE's
largest and most actively traded stocks covering 12 sectors. Debuting in 1986, the Sensex is India's
oldest stock index. Also called the "BSE 30," the index broadly represents the composition of
India's entire market.

The first step towards making a career in the stock market is always checking on how much
aptitude you have for the workings of the market. If you have a passion for the numbers and
understand the background of the market you are halfway there. There is nothing as hard and fast

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rule to have a degree in Finance to make a Career in Stock Market. Even if you are a B.Sc./B.Tech
or 12th pass out, you have equal chances to become a successful career in this domain.

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The Stock market is an emerging place to start your career with. Day by day it is getting bigger, and
many startups are setting up every day in the country. The opportunity to become an entrepreneur is
also straightforward in the stock market.

In India, young people are often reluctant to make the Stock market their Career choice as they get
scared by any kind of financial investment required in the process. But the growth of this industry in
the last few decades is phenomenal and one who is passionate can seriously turn.

Following are the things which are required to make a successful Career in Stock Market

Be passionate: As the market requires continuous learning and improving, being passionate about it
is something that is of utmost priority. You need motivation from within to grow by making you
aware of all the new nuances and facts of the industry

Finalize your interest Area: Since there is a plethora of options under the Stock market, you
should demarcate your interest area. Within the Stock market, you can choose to work in Broking
and distribution, asset management, be a trainer, financial advisor, etc. depending upon your
interest. Having a clear idea of which field interests, you the most will help make smarter career
sections.

Decision making: Once you have finalized your field of interest, now its the turn to have the
complete knowledge about that particular field. Decide by making smart choices which courses you
can opt for, which training you should take to become well versed in this domain.

Read Tirelessly: Reading is something that cannot be taken for granted. All the successful people
in the world had good reading habits. Particularly in this field, one needs to be more proactive
towards reading in order to understand the market in a better way.

Choose a Right mentor: It's a career where the business is often cyclical in nature and the same
will affect your performance as well. So, it's always good to have a mentor who can predict the
situation and work on your skills with time. their dreams into reality by choosing the right path.

Career options available in the Stock Market:

1) Market maker

2) Stockbroker

3) Sub broker

4) Research analyst
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5) Trader for hedge funds

6) Personal finance expert for clients of broking house

7) Risk mitigation

1.4 Aims and Objectives: -

1. To determine the possible price movements based on past patterns with the help of Candlesticks.

2. To calculate the risk and expected returns of various investment tools and the investment portfolio.

3. To examine the market and formulate methods to invest in purchasing shares of the companies.

4. To evaluate the stock market performance of major indices of BSE.

1.5 Types of Trading

Intraday trading

Intraday trading is also known as day trading. If an investor buys and sells stocks within the same
specific day, then it is called intraday trading. It directly means that if an investor buys a set of
shares on a day, they must sell those shares by the end of the same day, before the market closes for
the day. This form of trading lets the investors make use of margins, where they avail credit from a
broker.

Delivery trading

Delivery trading is the form of a long-term investment and it is also considered as one of the most
secure ways of investing in the stock market. This form of trading is the most prevalent one in the
stock market. The investor does delivery trading with a view to holding on to their purchased stocks
for a longer period of time.

Swing trading
Swing trading capitalizes on the changes or swings in prices of stocks or any other financial
commodity in the market over a few days. Traders participating in swing trading aim to hold stocks
for more than a day and benefit from the added momentum in the price of stocks.
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Positional trading

Positional trading is the form of trading that relies on a ‘buy and hold strategy. It requires the
traders to hold stocks for a long period of time. Traders who would like to respond to even the
slightest movements in the market, opt for day trading whereas positional trading yields profits only
when the traders wait for a significant rise in the prices.

Fundamental trading

Traders involved in fundamental trading are well-known for their fundamental analysis with respect
to the company’s data and further growth estimations. There is a special focus on the events related
to the company. This type of trading is also called a borderline investment which is because
fundamental traders do believe in a ‘buy and hold strategy, leading to long term trading i.e.,
investment.

Technical trading

Technical trading is done through efficient technical market analysis. This kind of analysis helps the
traders to understand the price changes of stocks and make trading decisions accordingly. A
technical trader can be successful through his capability to do research and required knowledge
about the stocks. This form of trading would need the trader to be able to read the charts and graphs
containing information clearly. Moreover, the risk involved in this type of trading is comparatively
high and tracking the patterns is crucial.

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Chapter Two: - Literature Review

2.1 Industry Profile: -

The Bombay Stock Exchange (BSE) is a stock exchange located on Dalai Street, Mumbai and is
the oldest stock exchange in Asia. The equity market capitalization of the companies listed on the
BSE was US$1 trillion as of December 2011, making it the 6th largest stock exchange in Asia and
the 14th largest in the world. The BSE has the largest number of listed companies in the world. As of
December 2011, there are over 5,112 listed Indian companies and over 8,196 scripts on the stock
exchange, the Bombay stock exchange has a significant trading volume.

This stock exchange, Mumbai, popularly known as ‘BSE’ was established in 1875 as “The Native
Share and stock brokers association”, as a voluntary non-profit making association. It has an
evolved over the years into its present status as the premiere stock exchange in the country. It may
be noted that the stock exchanges the oldest one in Asia, even older than the Tokyo stock Exchange,
which was founded in 1878. The exchange, while providing an efficient and transparent market for
trading in securities, upholds the interests of the investors and ensures redressed of their grievances,
whether against the companies or its own member brokers. It also strives to educate and enlighten
the investors by making available necessary informative inputs and conducting investor education
programs.

BSE Indices: -

In order to enable the market participants, analysis etc., to track the various ups and downs in the
Indian stock market, the exchange has introduced in 1986 an equity stock index called BSE-
SENSEX that subsequently became the barometer of the moments of the share prices in the Indian
stock market. It is a “Market capitalization weighted” index of 30 component stocks representing a
sample of large, well-established and leading companies. The base year of Sensex is 1978-79. The
Sensex is widely reported in both domestic and international markets through print as well as
electronic media.

Sensex is calculated using a market capitalization weighted method. As per this methodology, the
level of the index reflects the total market value of all 30-component stocks from different

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industries related to particular base period. The total market value of a company is determined by
multiplying the price of its stock by the number of shares outstanding. Statisticians call an index of

1
a set of combined variables (such as price and number of shares) a composite index. An Indexed
number is used to represent the results of this calculation in order to make the value easier to work
with track over a time. It is much easier to graph a chart based on indexed values than one based on
actual values world over majority of the well-known indices are constructed using “Market
Capitalization weighted method”.
In practice, the daily calculation of Sensex is done by dividing the aggregate market value of the 30
companies in the index by a number called the Index divisor. The divisor is the only link to the
original base period value of the Sensex. The divisor keeps the index comparable over a period or
time and if the reference point for the entire index maintenance adjustments.

2.2 Company Profile: -

Finlatics was started in July 2017 with the aim of making finance more accessible, friendly, and
fun. It was conceptualized and launched as a foremost work experience platform that helps students
experience domains like financial markets, portfolio management, equity research, investment
banking, private equity, venture capital among others as a highway to their careers in finance.

Due to the career acceleration nature of our platform and the impact it can have on lives, Finlatics
was one of the companies selected for incubation at the prestigious Atal Incubation Centre –
NMIMS, supported by Atal Innovation Mission, NITI Aayog & Government of India. We’re also a
recognized ‘Start – Up’ by Department for Promotion of Industry & Internal Trade, Government of
India.

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2.3 Board and Mission

Finlatics was started in July 2017 with the aim of making finance more accessible, friendly, and fun.
Their mission statement is “We simply the Stock Market”

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2.4 Consulting Board: -

Prof. Ninad Patwardhan

(Assistant Professor, FLAME University)

Balkrishna Mohta
(Former Director and Member, Bombay Stock Exchange Ltd)

Dr. Rohit Muraleedharan

Assistant Professor, Sarla Anil Modi School of Economics, Narsee Monjee Institute of
Management Studies

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2.5 Organizational Structure: -

Nisant Mohta - Founder & CEO

Neerav Doshi - Co-Founder & COO

Arvind Mourya - Associate Head - Technology

Chinmay Das - Associate Head - Programs & Growth

Sushant Vasishta - Associate Head - Growth

Ashwin Solanki - Technology Specialist

Amisha Salian - Program Manager - Financial Markets

Schnella Dias - Program Manager - Investment Banking

Vaibhav Jadhav - Creative Head

Sunil Panigrahi - Software Engineer

Vidhi Parakhiya - Software Engineer

Shubhankar Ghag - Program Manager - Financial Markets

Raviteja Bommagani - Program Administrator

Dinesh C. Shukla - Office Support

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2.6 Specific Details of the Department: -

Description of this project: -

Actively follow the companies listed on the Bombay Stock Exchange, specifically those that fall
under the BSE 500 INDEX. This is a composite index of the top 500 companies in India. Create,
manage & maintain a real-time simulated portfolio on BSE 500 listed companies. The simulated
portfolio will be assessed by linking it to the real-time BSE 500 INDEX, akin to an asset
management company Engage in economy-wide, sector-specific and company-oriented research
and analysis. Conduct in-depth research and analysis of any two sectors of the Indian economy and
finish the assigned research work.

The Department which I have selected is Financial Markets Experience Program (FMEP). So it is a
2- month equity trading, research, and analysis based program where we are supposed to create,
manage and maintain a real-time simulated portfolio on BSE 500 listed companies which is mentor
based under the guidance of Equity Advisor. And over here no prerequisites or prior domain
knowledge is required. So basically, they have provided us virtual money of Rs. 2,00,000 on the
initial day of the trading to build up our portfolio by buying and selling stocks from the capital
market. Also, we have being provided with the research section where we could publish our
research on the companies. A set of various modules were given for the better understanding of the
financial markets.

After Completion of the project, we will be getting a Certificate of Work Experience in Portfolio
Management As a certified 'Start - Up' in Skill Development & Assessment by Department for
Promotion of Industry and Internal Trade, Government of India; we would be issuing a Financial
Markets Performance Report (FMPR) covering all aspects of your engagement period with us. It
will include insights into your portfolio management skills, investment decisions, and research work
assessments. Top quality research has a chance to be published in our in-house blog. Letter of
Recommendation to top performers Cash Incentives upto Rs. 6000 will be given to top performers
in the FMEP Gold Program. There are two main elements to the program:

1. Portfolio Management
Portfolio management is the first task that you have to entail in the next 2
months. You have 2 lakhs as virtual money in your account and your task
is to invest this proportionately to maximize returns over the next two
months. There are three segments in the market:
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1. Large Cap - This is the segment that contains the top 100 most valuable
companies in India. Value of a company is determined by its market capitalization. Market
Capitalization is the product of a company on basis of its current market
price and number of outstanding shares in the market, A higher market
capitalization typically means that the company has a higher valuation.

2. Mid Cap - This is the segment that contains the companies, ranked 100
250 in India; in terms of value; that is in terms of market capitalization.

3. Small Cap - This is the segment that contains the companies,

ranked 250 - 500 in India; in terms of value, that is in terms of market
capitalization.

2. Equity Research
Equity Research primarily means analyzing the company's financials, perform
ratio analysis, forecast the financial in excel (financial modelling) and explore
scenarios with the objective of making BUY/SELL stock investment
recommendation.
Research reports were to be made on two sectors of our choice giving reasons
for selecting the same and two companies each under those sectors based on the
following parameters:
1. General Overview about the company
2. Management of the company
3. SWOT Analysis
4. Competitive Analysis
5. Conclusion and way forward

Under equity research part of the project 1 report on a company was to be submitted every week.
Also, we were supposed to rate the reports made by other finlatics users. Parameters of a good
research reports were given and according score were to be given. After submission of report, we
used to get ratings and feedback on our report to be better at it.

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1
2.7 Literature Review

Renu Choudhary and Neha Jain (2020), they studied about research on volatility pattern of BE
BANKEX Index & BSE Sensex index using Exponential weighted moving Average Model". The
main aim of the study was to model the volatility patterns of Bombay Stock Exchange (BSE)
Sensex and BE BANKEX Index using EWMA model. S&P BSE BANKEX index moment of last
10 years represented also the great attractions of investors and the high volume of turnovers. To
concluded that volatility last 10 years represented also the great attractions of investors and the high
volume of turnovers.

Roni Bhowmik and Shouyang Wang (2020), studied about stock market volatility and return
analysis. The aim of the study was to examined effective GARCH models recommended for
performing market returns and volatilities analysis. The study founded that there has been a
significant change in research work within the past 10 years and most of researchers have worked
for developing stock markets.

Dr. Silky ViggKushwah and Ms. SulekhaMunshi (2018), studied about the effect of seasonality
over stock exchanges in India. The method of data analysis used in this research work is the
descriptive statistics and paired sample t-test. S&P CNX Nifty 50 has been taken as sample. It was
also found that Diwali and Change in calendar year events have an inverse relationship with Nifty
returns as they have negative correlation between them. While Budget announcement and changed
in financial year events have direct relationship with Nifty returns as there exists a positive
correlation between them.

Ashok Bantwa (2017), studied about a study on India volatility index (VIX) and its performance as
risk management tool in Indian stock market". The main aim of the study was to study the
performance of volatility Index as a barometer of investor's sentiment and volatility in stock market.
To concluded that changed in volatility as the main driver for time varying risk premium.

Dr. Satish Kumar (2017), studied about market efficiency in India: An empirical study of Random
walk hypothesis of Indian stock market NSE midcap. The existence of random walk for NE Midcap
Index has been examined through autocorrelation, Q-statistics and the run test and found that the
Indian stock market was not efficient in the weak form during the testing period. Study was found
the stock prices in India was not reflected all the information in the past stock prices and abnormal
returns can be achieved by investors through exploiting the market inefficiency.

PapiaMitra (2016), studied about day of the week effect on stock market return and volatility:
evidence from Indian stock market". The period covered from January 2000 to December 2015 used

1
daily closing prices. It has incorporated the GARCH model specifications where a conditional
variance term is included to eliminated the problem of heteroscedasticity of the residual term. To
concluded that Friday and Monday are the most volatile days for Sensex and Nifty respectively

Venkataramanaiah. M (2016), studied about a study on volatility in Indian stock market. The
main aim of the study was to examined the movement of inter and intra-day volatility in BE Sensex.
The daily indices of Sensex for a period of 10 years from 1998 to 2008 have taken for the study. It
was found that daily average returns and daily average volatility across the index was varying over
time and space. This divergence was highly demonstrable. Sometimes provided as high as 0.04 per
cent retune while sometimes it was negative.

GoutamTanty and PramodPatjoshi (2016), they studied on stock market volatility pattern of BSE
and NSE in India. The main focus of this research paper was to examined the nature of the volatility
in the Indian stock markets. In this study ARCH and GARCH models have applied to study the
behavior of stock market volatility. The results of the present study showed that both the stock
markets i.e. BSE Sensex and NSE-S&P CNX Nifty exhibit volatility clustering. The descriptive
statistics result of both the markets' return series suggested that the return series of BSE was
positively skewed while that of NSE was negatively skewed.

VelmuruganRamaseamy (2016), studied about day of the week effect in Indian stock market with
reference to NSE nifty Index. The main aim of the study was identifying the existence of the day of
the week effect in Indian stock market. The study utilized the daily return data of the National Stock
Exchange's CNX Nifty Index for the period ranging from April 2011 to March 2016 for analysis.
The collected secondary data are analyzed by applying descriptive statistics and ordinary Least
Square Regression (OLS). Study was found out that Indian stock market was inefficient. To
concluded that lower returns on Tuesday and maximum returns on Wednesday in Nifty index.

Sarika Mahajan and Balwinder Singh (2013), they studied about return, volume and volatility
relationship in Indian stock market: Pre and Post rolling settlement analysis. The study used a bi-
variate Vector autoregressive model (VAR) model of order p of the form. To conclude that there
was a positive contemporaneous relation between volume and volatility in both pre and post rolling
settlement period for SENSEX but degree of correlation is more in post period.

SomSankar Sen (2013), studied about an investigation of the day of the week effect on return and
volatility of NE Nifty. The descriptive statistics of daily market returns have been applying
GARCH- M model on the daily NIFTY returns data. Study was clearly indicated that there was day-
of- the- week effect in the daily NIFTY return during the pre-T+2 rolling settlement period. To
concluded

2
that the anomaly could be due to investor optimism and thereby a will to buy stocks just before the
weekend.

Mr. Divyang j Joshi (2012), studied about testing market efficiency of Indian stock market". The
purpose of this study was to tested the random walk theory in Bombay stock exchange. The main
intention of this paper was to study the efficiency level in Indian stock market and the random walk
nature of the stock market by using run test for the period from Ist January 2001 to 31st December
2010. So, the findings support the random-walk hypothesis in short duration but in long term didn't.

RanjanDasgupta (2012), studied about long run and short run relationship between BE Sensex and
macroeconomic variables. His study was attempted to explore the long-run and short-run
relationships between BE SENSEX and four key macroeconomic variables of Indian economy by
using descriptive statistics, ADF tests, Johansen and Juselius'scointegration test and Granger
causality test. To concluded that no short-run relationships between the BE Sensex index and the
macroeconomic variables selected under this study by applying Granger causality test.

Sudharshan Reddy Paramati and Rakesh Gupta (2011), studied about an empirical analysis of
stock market performance and economic growth: evidence from India". The collected data were
seasonally adjusted to correct seasonal variations and then converted into natural logarithms (In) for
all the variables. The present study undertaken a comprehensive set of econometric tests for the
empirical analysis such as; Unit root (ADF, PP and KPSS) tests, Granger Causality test, Engle-
Granger Cointegration method and finally; Error Correction Model (ECM). To concluded that there
was no causal relationship between BSE and GDP but in the case of NE and GDP there was a
unidirectional relationship and that runs from GDP to NSE.

A. Q. Khan, Sana Ikram and MariyamMehtab (2011), studied about testing weak form market
efficiency of Indian capital market: A case of national stock exchange (NSE) and Bombay stock
exchange (BSE). The main aim of the study was to developed an understanding of the various
forms of efficiency of the stock market. The efficiency of the Indian capital market was tested using
the daily closing values of the indices of NSE and BSE over the period of 1st April 2000 to 31st
March 2010 by employing Runs Test, which was a nonparametric test.

Study confirmed that both the NSE and BSE do not follow the random walk and the Indian Capital
Market is not weak form efficient. To concluded that develop an understanding of the various forms
of efficiency of the stock markets.

Gagan Deep Sharma, MandeepMahendru (2009), they studied about efficiency hypothesis of the
stock markets: A case of Indian securities. The main aim of the study was to investigated the
validity
2
of the efficient market hypothesis on the Indian securities market. It was observed that the effect of
stock prices for the sample companies on future prices is very meagre and an investor cannot reap
profits by using the share price data as the current share prices already reflect the effect of past
share prices. Study was found out that indicated that the BSE needs to strengthen its regulatory
capacity to boost investors' confidence.

Golaka C Nath and Manoj Dalvi (2004), they studied about day of the week effect and market
efficiency evidence from Indian equity market using high frequency data of national stock
exchange. Study examined empirically the day of the week effect anomaly in the Indian equity
market for the period from 1999 to 2003 using both high frequency and end of day data for the
benchmark Indian equity market index S&P CNX NIFTY using robust regression with biweights
and dummy variables. Study was found that Mondays' average returns were negative and Fridays
were positive.

Kaushik Bhattacharya and DebabrataMukhopadhyay (2003), they studied about stability of the
day of the week effect in return and in volatility at the Indian capital market: A GARCH approach
with proper mean specification. The study specified a generalized autoregressive conditional
heteroscedasticity (GARCH) model on returns. Results were compared to those based on ordinary
least squares (OLS) procedure to examined how erroneous the inference on day-level seasonality
could be when the aspect of volatility is ignored.

HakanBerument and HalilKiymaz (2001), they studied about the day of the Week Effect on
Stock Market Volatility. The aim of the study was to investigated the day of the week effect in
stock market volatility in sub-periods. They estimated day of the week effect in return equation by
using Ordinary Least Square method (OLS). This study tested the presence of the day of the week
effect on stock market volatility by using the S&P 500 market index during the period of January
1973 and October 1997. The findings showed that the day of the week effect is present in both
volatility and return equations

Sunil Poshakwale (1996), studied about evidence on weak form efficiency and day of the week
effect in the Indian stock market". This study provided empirical evidence on weak form efficiency
and the day of the week effect in Bombay Stock Exchange over a period of 1987-1994. The results
of runs test and serial correlation coefficients tests indicate non-random nature of the series and,
therefore, violation of weak form efficiency in the BSE. To concluded that the weekend effect was
evidenced as the returns achieved on Fridays was significantly higher compared to rest of the days
of the week.

2
Chapter Three: - Research Methodology

3.1 Problem Identification

Analysis of stock market for the assessment of the risk has assumed greater significance in India
after liberalization and to be very specific over the last decade. New investors need to understand
that the stock market is very volatile. Volatility refers to the frequency with which changes in stock
prices occurs over a given period of time. The term 'volatility' is often used in respect of stock
market. When the stock market goes up one day, and then goes down for the nest five days, then up
again, and then down again, that's what we call stock market volatility.

If the new investors want to be a part of the stock market, they should learn how to face the
volatility. Facing volatility means efficient in managing the risk of the investment.

3.2 Research Methodology

The project is on stock market performance of BSE. Hence the study has been done on the basis of
information and news available about the sectors i.e., by both Primary and Secondary Data by
various modes. This research has completed by doing Fundamental analysis and technical analysis
of the companies. Secondary data was collected from the internet, company websites. However, the
main source of information is Annual Report issued by the companies and also quarterly reports of
the current year showing their performances in current market scenario. Firstly, data was analyzed
on the basis of the industry. The industry i.e., Financial services sector were focused on and its
performance and relation with the Indian economy was monitored and then specific stocks were
chosen to be invested in depending upon the fundamentals of the company stocks. These stocks
were individually analyzed and then measured whether it would give maximum returns if invested
in. Internet was a major source of information while preparing the project as most of the data
collected was gathered from various websites.

Here researcher considered different indices of BSE, following are

BSE SENSEX BSE SENSEX 50 BSE SENSEX NEXT 50

BSE 100 BSE 100 ESG Index BSE 100 LargeCap TMC
BSE 150 MidCap BSE 200 BSE 250 Largemidcap
BSE 250 SmallCap BSE 400 MidSmallCap BSE 500
BSE AllCap BSE LargeCap BSE MidCap
BSE SmallCap BSE SME IPO S&P BSE CPSE

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3.3 Data Collection

In this study the data is collected through personal contacts using a Structured Questionnaire
Method which is original. A questionnaire is a research instrument that consists of a set of questions
or other types of prompts that aims to collect information from a respondent. A research
questionnaire is typically a mix of close-ended questions and open-ended questions. Open-ended,
long-form questions offer the respondent the ability to elaborate on their thoughts. The Secondary
data regarding company, retailer and product profiles and investor list for sampling was collected
from company records and internet.

3.4 Data Analysis Tools and Techniques

Tools and techniques

In this section, researcher first describe about the data set used in this study. The data set is major
BSE indices. In order to study the pattern of time varying volatility of daily returns, ARCH-M
model was employed. The data is obtained fromwww.bseindia.com online data base. The stock
market volatility has been estimated on return in this study, researcher have examined inter-day and
intra- day returns of Sensex. Stock prices are usually observed at fixed intervals of time (daily,
weekly or monthly) and we then have a time in this study, researcher have examined inter-day and
intra- day returns of Sensex. Stock prices are usually observed at fixed intervals of time (daily,
weekly or monthly).

To calculate return:

R= LN(PUPO)

Where, R= Return

LN= Natural logarithm function

Pt- Today's closing price

PO= Yesterday's closing price

Here, Rt is logarithmic daily return at time t and Pt-1 and Pt are daily prices of an asset at two
successive days, t-1 and t respectively. For the time series analysis, transformation of original series
is required and depending upon the type of series when the data is in the level form.

2
In this paper we have transformed the series of return by taking natural logarithm of the series. As
per research scholars (Bollerslev, 1986; Schewert, 1989; Engle and Patton, 2001; Harvinder Kaur,
2001; M.

Karmakar, 2005) have pointed out two advantages of this kind of transformation of the time series
data. First, it eliminates the possible dependence of changes in stock price index on the price level
of the various indexes. Second, the change in the log of the stock price index yields continuously
compounded series.

Convenient Sampling Method is being used for collecting the data. The sample size of the present
study is 53 samples. Sampling Unit consists of students and investors. In statistics, survey sampling
describes the process of selecting a sample of elements from a target population to conduct a
survey. The term "survey" may refer to many different types or techniques of observation.

To Find Daily Volatility:

Once the daily return has calculated use excel function called 'STDEV' to calculate the standard
deviation of daily returns, which of you realize the daily volatility of particular indices or stocks.

To calculate annual volatility:

In order to convert the daily volatility to annual volatility just multiply the daily volatility number
with the square root of time.

Unit root test

Unit-root problem is concerned with the existence of characteristic roots of a time series model on
the unit circle. Recall that a random walk model is zt = zt-1 + at, where fat; is a white noise process.
In general, (at} can be a sequence of martigale differences, that is, E (at IFt-1) = 0, Var (at Ft-1) is
finite, and E (at| 2+8 Ft-1) < co for some 8 > 0, where Ft-1 is the 6-field generated by (at-1, at-2, .;.
For simplicity, one often assumes that ZO = 0. It will be seen later that this assumption has no effect
on the limiting distributions of unit-root test statistics. This simple model plays an important role in
the unit-root literature. The assumption that at is a martingale difference is the basic setup used in
Chan and Wei (1988, Annals of Statistics) for their famous paper on limiting properties of unstable
AR processes. However, this assumption can be relaxed without introducing much complexity. In
what follows, we adopt the approach of Phillips (1987, Econometrical) with a single unit root and at
is a stationary series with weak serial dependence. The case of unit roots with multiplicity greater
than 1 or other characteristic roots on the unit circle can be handled via the work of Chan and Wei
(1988). The results of the previous section can be used to test for a unit root, especially the t-ratio
statistics.
2
Assume that the true model is zt = zt-1 + t and, for simplicity, we start with the model zt = azt-1 +
et. The null hypothesis is Ho : 7 = 1 and the alternative is Ha: I< I From the basic theorem, the
limiting distribution of the t-ratio of the least squares estimate "I depends on some parameters of yt
series. These parameters of yt become nuisance parameters and we shall consider ways to overcome
them. To this end, we shall focus on the case that yt is driven by some martingale-difference
sequence. Later we shall consider the model zt=a0 + 12t-1 + et ARCH-M model An ARCH
(autoregressive conditionally heteroscedastic) model is a model for the variance of a time series.
ARCH models are used to describe a changing, possibly volatile variance. Although an ARCH
model could possibly be used to describe a gradually increasing variance over time, most often it is
used in situations in which there may be short periods of increased variation.

ARCH models were created in the context of econometric and finance problems having to do with
the amount that investments or stocks increase (or decrease) per time period, so there's a tendency
to describe them as models for that type of variable. For that reason, the authors of our text suggest
that the variable of interest in these problems might either bey=(xt-y-1)/xt-1, the proportion gained
or lost since the last time, or /og(xt/rr-1) =log(xt)-log(xt-1), the logarithm of the ratio of this time's
value to last time's value. It's not necessary that one of these be the primary variable of interest. An
ARCH model could be used for any series that has periods of increased or decreased variance. This
might, for example, be a property of residuals after an ARIMA model has been fit to the data.

3.5 Trading Process

The steps in trading procedure on stock exchange are as follows:

(i) Selection of a broker: The first step is to select a registered broker prior to purchase /sale
of securities that assist investors to execute trade transactions in secondary markets.
These brokers can be an individual, corporate body or a partnership firm.

(ii) Opening a DEMAT account with depository: Individual investors need to open a
DEMAT or Dematerialized account provided by Depository Participants (DP) who act
as agents or intermediaries between depositors and investors. DPs include SEBI, banks,
sub-brokers, etc.

2
(iii) Placing the order: post-opening a demat account, investors can place an order by,
specifying the number of securities and the company /script name at an expected price
either through a DP or personally through an email, phone, etc.

(iv) Executing the order: The order is placed by a broker for buying or selling the securities.
Broker prepares a contract note that contains the name and price of securities, name of
parties and brokerage or commission charged by them and duly signed by the broker.

(v) Settlement: Settlement is carried out either through cash or carry forward basis under
either two or both types of settlements:
(a) On the spot settlement, which occurs in T+2 basis where T stands for transaction
date and '2' are the number of days.

(b) Forward settlement, that can take place on some future date, which can be T4-5 or T
+ 7.

3.6 Sample Plan

 Convenience Sampling Method is used in this research project. I circulated the questionnaire
survey to the nearest people I know and analyzed their responses.

 Sample Size
The sample size for this research is 54.

 Sampling Unit
The sampling unit used in this research is investors who invest in stock market.

2
Chapter Four: - Data Description and Analysis

Data Description and Analysis: -

Chart no.1

Interpretation:

Here, it is found that 90.4% respondents belong to the age group between 20 – 30 who actually
invest into the stock market and others belong to the age group between 30 – 40 and a very few
belong to 50 – 60 age group.

2
Chart no.2

Interpretation:

Here, it is found that most of the responses are from the graduated members i.e. (48.1%) and then of
the post-graduated (38.5%) people following with the under graduates, MBA & Serviceman.

2
Chart no. 3

Interpretation:

Here, it is found that the highest group of respondents belong to the category of Annual Income
Below 2 lakhs (54.9%) which would be mostly the young generation investing in stock and then
followed by the category between 2 lakhs and 4 lakhs i.e. (23.5%) and so on.

3
Chart no. 4

Interpretation:
Here, it is found that 42.3% of respondents feel that yes investing in stocks might be safe but are not
sure about it. Also 50% of the respondents think that it is absolutely safe to invest into stock market
but a very few respondents i.e., 7.7% think that it is not actually safe to invest into the stock market.

3
Chart no. 5

Interpretation:
Hence, it is found that most respondents i.e., 59.6% do actually invest into the stock market and the
remaining 40.4% have not yet invested in the stock market.

3
Chart no. 6

Interpretation:
Here, it is found that 46.2% respondents prefer Long Term as their investment pattern and 32.7 %
respondents prefer Short Term as their investment pattern and a very few i.e., 21.2% respondents
prefer neither of the two-investment pattern.

3
Chart no. 7

Interpretation:
Here, it is found that most respondents i.e., (63.5%) invest in Stock Market and (15.4%)
respondents invest into Bank and (9.6%) respondents invest in Gold. And no respondents are seen
investing into Property and Insurance from the survey.

3
Chart no. 8

Interpretation:
Hence, it is found that 76.9% of the respondents think that investing is both an opportunity and a
certain amount of loss. And 17.3% respondents think that investing is mostly an opportunity.

3
Chart no. 9

Interpretation:
Here, it is found that 61.5% respondents consider all the criteria included i.e., (background of the
company, statistics of daily stock activities, historical and futuristic information, external influence
or insider’s information). And 13.5% respondents prefer statistics of daily activities as well as
historical and futuristic information before investing a product. And 11.5% prefer to check the
background of the company before investing a product.

3
Chart no. 10

Interpretation:
Here, it is found that 32.7% respondents have selected social media as their source of information
about the Stocks. And 30.8% respondents have selected Through learning and their experience
along with 23.1% as Studies and 9.6% as through Google.

3
Chart no. 11

Interpretation:
Here, it is found that most of the respondents i.e., 90.2% have experience less than 5 years in stock
market and the remaining 9.8% respondents have experience between 5 – 10 years into the stock
market.

3
Chart no. 12

Interpretation:
Here, it is found that 58.8% respondents would like to go for the best possible return even if there
were risk involved but are not sure. And 35.3% respondents are sure that they would definitely go
for the best possible return even if there were risk involved.

3
Chart no. 13

Interpretation:
Here, it is found that in case of major financial decision 51% of respondents are usually more
concerned about the possible gains and 27.5% of respondents are usually more concerned about the
possible losses and 17.6% of respondents are always concerned about the possible gains.

4
Chart no. 14

Interpretation:
Here, it is found that 46% respondents follow Intraday Trading pattern while investing in the share
market. And 32% respondents follow the positional trading pattern while investing and a very few
i.e., 14% respondents follow swing trading pattern while investing in share market.

4
Chart no. 15

Interpretation:
Here, it is found that 71.2% which means majority of the respondents are satisfied with the services
of their existing trading company and a very few i.e., 28.8% respondents are not satisfied with the
services of their existing trading company.

4
Chapter Five: - Summary Conclusions

Findings
 As per the ARCH-M model researcher has found that in all sample indices showed volatility
so as per the title researcher proved that performance of the market has been in high volatile
but it influences negatively.
 In case of BSE, it is noted that the z-value is computed as near to 2. The value falls outside
the 95% confidence interval and so we cannot accept the null hypothesis. This implies that
the succeeding price changes do not move in an independent manner. Here all sample BSE
major indices showed high volatility nature.
 Study has been showing more volatility in every indices and we also found out that sample
population of investors were risk averse. Therefore, researcher would suggest that investors
should make decision based on behavior of the market.

Conclusion

This research presents a comprehensive literature which has mainly focused on studies on return
and volatility of stock market using systematic review methods on various major indices of BSE in
India. This review was driven by researchers" available recommendations for accompanying
systematic literature reviews to search, examine, and categorize all existing and accessible literature
on market volatility and returns. Stock market return and volatility analysis is a relatively important
and emerging field of research. There has been plenty of research on financial market volatility and
return because of easily increasing accessibility and availability of researchable data and computing
capability. The ARCH-M type models have a good model on stock market volatilities and returns
investigation. The popularity of various ARCH-M family models has increased in recent times.
Understanding stock market, risk and return behavior is important for all countries but it is of more
important to developing countries, particularly, where the market consists of risk averse investors as
the opportunities to invest and diversify the investment is not much. During the last decade it is
evident that there is high growth in the Indian stock market in terms capitalization, trading,
turnover, number of investors, etc. during this period Indian stock market has gone through rapid
changes in all the aspects. It has seen all time ups and downs. The study concludes that BSE does
not follow any model. Unit root test and ARCH model are being employed in this study, which
rejects the presence of random walk and support that Indian capital market is not weak form market
efficient.

4
Learnings from the Study

1. Have a Plan

Whether you’re considering an asset allocation strategy, a budget, a set of standards for your kids,
or setting up a garden, it’s important to sketch out a plan before you act. The plan should include a
purpose or goal and reasons why you chose a certain course of action over several other
alternatives. That way, when you go back and evaluate your plan, you can remember why you made
the choices you made. If it’s going well, great. Stay the course. If things aren’t going the way you’d
like, try out one of your alternative choices or re-evaluate your purpose.

2. Have a Plan B

Contingency plans are always important, whether you’re talking about an investment decision or
not. Any plan should always include a “what if I’m wrong” clause. Have a course of action ready in
case things don’t go as planned. What will you do if you get sick, lose your job, or come into some
unexpected good luck?

3. Risk vs. Reward Analysis

I covered this in detail in Risk vs. Reward: The Ultimate Calculation, so I won’t belabour the point
here. Any decision you make can benefit from weighing the pros and cons and deciding how
important each factor is to you.

4. Let Your Winners Run

This is basically a reiteration of the old “if it ain’t broke, don’t fix it” adage. If your plan, financial
or otherwise, is going well, resist the urge to tinker. It’s like those cooking shows where they tell
you to sear one side of the meat well before flipping it over.

If you handle or manipulate the food too much, you’ll end up with something that resembles a piece
of leather rather than a juicy, gourmet dish. Still, many of us can’t resist shifting, poking, or worst
of all, pressing down on it with a spatula! Give your plan the room it needs to play out and
remember: tampering often leads to hampering.

5. Cut Your Losses

If you’ve given your plan some time and it’s clearly not working, it’s time to make a choice. Do
you give it a little more time, move to Plan B, or start working on Plan C? I admit that I probably
shouldn’t be giving any advice in this area, since I tend to perpetually cut losses either too early or
too late.

4
It’s always a tough call to make, but if your instincts (and the facts) are telling you it’s not working,
chances are you need to change directions.

6. Mean Reversion Rules

All trends eventually end. The trick is to recognize when that has occurred and prepare for it in
advance. Life, like the markets, seems to have cyclical peaks and valleys. A good rule of thumb is
to be the ant. If you’re experiencing a run of good luck, make provisions for when your luck turns.
Chances are it will do so at some point, and if it doesn’t, you can rest easy knowing that you are
prepared. If you play the grasshopper, you are likely to suffer a particularly harsh winter.

Strengths of the Study

Probability of high returns over the short-term

The biggest advantage of share market investment is that it has the potential to generate inflation-
beating returns within a short period of time as compared to other investment avenues like bank
FDs, saving accounts etc.

Ownership stake in the company.

When you buy shares of a public listed company, no matter how small your share size is, it gives
you proportionate control over the company. This ownership of shares will in turn grant you the
voting rights and you will receive dividends, bonus, etc.

High liquidity

Unlike other investment avenues, shares do not have any lock-in period. Investors can buy and sell
shares through the stock exchanges within seconds.

Your rights are well protected by SEBI

The stock market is regulated by the Securities and Exchange Board of India (SEBI). SEBI strictly
monitors market participants like brokers, sub-brokers, advisors and stock exchanges to safeguard
the interest of the shareholders.

Tax benefits

Long-term capital gains i.e., investments held for more than 12 months are taxed at 10% over Rs 1
Lakh only. Short-term capital gains i.e., investments held for less than 12 months are taxed at 15%
+ 3% cess. Any capital loss can be offset or carried forward for up to eight financial years.

4
Contribution to economic growth

The stock exchanges have notably contributed to the growth of the economy, and the growth of the
economy has aided the development of the stock exchanges. The first stock exchange Bombay
Stock Exchange was established in 1875 and the National Stock Exchange was established in 1992.

Easy to buy and sell

Stock market investments are one of the most liquid forms of investments, unlike fixed deposits in
banks or government bonds, there is no stipulated investment period. And as compared to real estate
transactions the process of transfer of title has considerably less legal formalities and quicker.

Tax benefits

Where earnings from several other investment options are subject to high tax rates the strategic
security investments save up on tax payment, Section 112A of the Income Tax Act, 1961 allows the
investors to claim tax benefit on the long-term capital gains, the term varies for the listed and
unlisted status of the company and the type of security itself.

Convenience

Equity investments are globally one of the most convenient forms of investment. Such convenience
is largely associated due to the facility of online trading, the immense amount of knowledge
available to investors in the form of television shows, YouTube videos, financial magazines or
newspapers and the ease and speed of conducting the transaction itself.

Limitations

 The obstacles faced during this research was lack of expertise for which a capable
management is required.
 The changing demand for a particular stock was again a challenge in the research process.
 Investing in BSE was challenging as it is subjected to many risks since the market is volatile.
 Apart from the volatility of the market as explained above, the equity investment carries the
highest amount of risk even in terms of corporate finance.
 Every time while purchasing or selling shares some amount of brokerage was supposed to
pay which kills the profit margin.

4
Future Scope of Research

In a real sense, the stock market is a reflection of the economy and a function of supply and
demand. Indian economy is one of the fastest-growing economies in the world and is expected to
touch a 5 trillion-dollar mark by 2025 to become the third-largest economy in the world. India has a
very young and aspiring population with rising average income and has shown an increase in its
growth rates in every decade since independence. Developed countries like Japan or the USA,
have an older population and most of the market is saturated and less scope for development.

We have a habit of saving and investment unlike the US, which is based on debt. Government and
citizens have a lower level of debt compared to other economies. India's GDP is currently estimated
at around USD 2.72 trillion and to achieve 5 trillion economies as a plan of the current government,
India needed to grow on average at 9 to 10 percent per year in real terms 2020 to 2024 to achieve
the target.

Here it becomes important to develop important things like corporate policies, FDI inflows, job
creation, infrastructure, etc. The government is piloting the economy frontward by changing so
many policies. Demonetization, IBC, and other cleanup reforms, other constructive reforms, tax
cuts, privatization, were some of the important and strict measures, which could be a hindrance, in
the short, term but will surely be a great success in the future.

A stock exchange represents the performance of the companies listed on the stock exchange
cumulatively, thus giving the investor an idea of the financial growth of the region. Microeconomic
and macroeconomic factors, the business environment, the legal structure, and tax policies
applicable to each economy affect stock market movements.

Sensex was started in 1979, from that day until now it is at around 40000 levels similarly Nifty was
established in 1996 and is at 11000 levels, so if someone had invested in nifty or Sensex at an initial
level, he would have generated fantastic returns by now. However, out of a population of 1.3
billion, there are around two crores’ investors in the equity market.

The good news is the no. of Demat accounts has crossed four crores that is an essential part of
investing. The number of active Demat accounts opened CDSL has reached 2.5 crores. From 2015,
Central Depository Services Ltd (CDSL) alone has added 1.5 crore Demat accounts. The main
reason for people not participating in the economy is awareness and knowledge of financial
products and markets. The low-level participation from the female side in the financial market is
really a serious issue.

4
It becomes important for retail investors to look market from a different level, know their risk
appetite and investment goals, and set a disciplined approach. The magic mantra is value investing.
If you plant a mango tree, you should wait for 10-12 years to reap the fruit. Similarly, Asset
allocation, diversification, regular investment is some of the important factors one should know
before investing.

Securities and Exchange Board of India (SEBI) have been taking necessary steps to protect the
investors' interest and have brought measures to promote financial literacy. Regulatory bodies like
SEBI, governments, and RBI has taken many measures to cater to demand and transparency in the
market. Due to global situations, China-US trade war, many companies are planning to shift their
base to India. After globalization the world seems to be borderless, many trade barriers have been
removed, and people have more faith now, idea of capitalism facilitates the maximization of wealth.
Investors globally and at the domestic level also are looking forward to investing in the Indian
market. The market always looks at the future. In the long term, economic fundamentals propel the
market in the long-term. Thus, the Indian stock market is about to perform well in near future.

Some of the important facts for the development of the stock market could be the following:

1. The literacy rate has spurred up from 47 % to 74 % (2001 to present) and now people are more
aware of the market.

2. Development in science and technology has helped to cut the barrier, now anyone can operate his
account from anywhere.

3. India is one of the largest demanding markets and active participation by foreign players has
created a demand.

4. The developed market is already saturated and the rate of return is low, so investors are looking
for investment in new markets, which is developing.

5. Stable government, fair transparent policies are important factors that decide the fate of the stock
market.

6. No. of first-time investors since 2019 is an all-time high

4
VIII. Reference

I) K. Prachar, Primzahl Verteilung. -Berlin, 1957, p. 511 (K. Prahar, Distribution of prime
numbers, Mir Publishing House, Moscow, 1967.511 p
II) E.C. Titchmarsh, TheTheoryofTheRiemann Zeta-Function, Oxford, 1951,407p.
III) A.L. Karatsuba, Fundamentals of the analytical theory. - M.: Nauka. 1983.
IV) S.C. Coutinho, TheMathematicsofCiphers.NumberTheoryandRSACryptography. -AK
Peter, Ltd. AllRightsReserved, 1999, p. 323.
V) I.M. Vinogradov, Theory of the Theory. -M.: Science, 1981
VI) Don Tsagir, The First 50 million Simple Numbers, Uspekhimat.Nauk, 1984, vol. 39,
issue 6 (240), pp. 175-190.
VII) G.H. Hardy, E. M. Wright, AnIntroductiontotheTheoryofNumbers., Oxford Science
Publication, 1979.
VIII) A.E. Ingam, Distribution of prime numbers. –M.: EditorialSURSS, 2005,268 p.
IX) Introduction to cryptography. Subdiv.red. Yashchenko, M.: MCNMO-CheRo, 2000,316s.
X) N. Kbits, Kursteyorichiselikriptografii.M.: TVP, 2001, p. 101.
XI) D.G. Wells, Prime numbers: themostmysteriousfiguresinmath. New Jersey, 2005.
XII) V.I. Zenkin, Distribution of prime numbers. Kaliningrad, 2008, 1858 p.
XIII) H. Domash, Fire your Stock Analyst
XIV) The Visual Investor (2nd ed) by John Murphy
XV) Investment Fables by Aswath Damodaran
XVI) S. Nisson, Japanese Candlestick Charting Techniques (2nd ed)
XVII) M. Pring, Technician’s Guide to Day & Swing Trading
XVIII)Bodie, Zvi, Alex Kane, and Alan J. Marcus. Investments. 4th ed. Boston: Irwin/McGraw-
Hill, 1999.
XIX) Schwartz, Robert A. Equity Markets: Structure, Trading, and Performance. New York:
Harper & Row, 1988.
XX) Teweles, Richard J., and Edward S. Bradley. The Stock Market. 7th ed. New York: John
Wiley & Sons, Inc., 1998.

VIII
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IX. Bibliography

https://www.bseindia.com

http://www.zenithresearch.org.in

https://www.equitymaster.com

https://www.moneycontrol.com

https://trendlyne.com

https://m.economictimes.com

https://www.finlatics.com

https://in.linkedin.com

https://money.rediff.com

https://www.business-standard.com

https://www.investopedia.com

https://walletinvestor.com

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IX
X. Annexure

Questionnaire

I. Age Group of Investor.

 20 - 30
 30 - 40
 40 - 50
 50 – 60

II. Academic Qualifications

 Under Graduated
 Graduated
 Post Graduated
 Other

III.What is your Annual Income?

 Below 2 Lakhs
 2 Lakhs to 4 Lakhs
 4 Lakhs to 6 Lakhs
 6 Lakhs and above

IV.Do you think investing in stock market is safe?

 Yes
 No
 Maybe

49
X
V.Are you investing in stock market?

 Yes
 No

VI. What is your investment pattern?

 Short Term
 Long Term
 None

VII.Where do you invest?

 Stock Market
 Property
 Gold
 Insurance
 Bank

VIII.Do you think investing is mostly an opportunity or mostly a risk?

 Mostly an Opportunity
 Mostly a risk
 Both

IX.What criteria would you consider before investing a product?

 Background of the Company

 Statistics of daily stock activities
 Historical and futuristic information
 External influence or insider's information
 All of the above

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XI
X.How do you know about investment in stocks?

 Advertisement
 Google
 Social Media
 Studies
 Through learning and experience

XI.Your experience in Stock Market.

 Less than 5 years

 5 - 10 years
 Above 10 years

XII.Would you go for the best possible return even if there were risk involved?

 Definitely Yes
 Not at all
 Maybe

XIII.When you are faced with a major financial decision, are you more concerned about the
possible losses or the possible gains?

 Always the possible losses

 Usually the possible losses
 Usually the possible gains
 Always the possible gains

XII51
XIV.Which pattern you follow while investing in the share market?

 Intraday Trading
 Swing Trading
 Positional Trading
 Other

XV.Are you satisfied with the services of your existing trading company?

 Yes
 No

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XIII