“Overview Study of Stock Exchange Market of India”

Submitted in Partial fulfillment for the award of the

degree

(Batch 2022-2024)
Submitted by

Reg.No.-2206247013

AVP,IIFL Securities, Associate Professor,

BBSR RCM,BBSR
 DECLARATION

I, Mr. Balaram Sahoo student of Master of Business Administration, belong in to

Regional College of Management, declare that this Project Report / Dissertation entitled
“Overview Study of Stock Exchange Market of India” is the result the of project /
dissertation work done by me under the supervision of Dr. SANJUKTA MISHRA.
I am submitting this Project Report / Dissertation in partial fulfillment of the requirements
for the award of the degree of Master of Business Administration in Finance by the
REGIONAL COLLEGE OF MANAGEMENT, Bhubaneswar during the academic year
2022-24.

(Signature of the candidate)

Certified that this project work submitted by BALARAM SAHOO has been carried out
under my / our guidance and the declaration made by the candidate is true to the best of my
knowledge.

Signature of Guidance Signature of Director of RCM,

Date: BBSR

Date:

i
 CERTIFICATE BY INTERNAL GUIDE

This is to certified that Mr. Balaram Sahoo, student of Regional

College of Management, Bhubaneswar has completed project work on
“An overview Study of Stock Exchange Market of India.” Under my
guidance and supervision. He has successfully completed his summer
internship with IIFL Securities Ltd.

I certify that this is an original work and has not copied from any
source.

Signature of Guide

Asso. Prof. Dr. Sanjukta Mishra

Date:

ii
 CERTIFICATE BY EXTERNAL GUIDE

This is to certified that Mr. Balaram Sahoo, student of Regional

College of Management, Bhubaneswar has completed project work on
“An overview Study of Stock Exchange Market of India.” Under my
guidance and supervision. He has successfully completed his summer
internship with IIFL Securities Ltd.

I certify that this is an original work and has not copied from any
source.

Signature of Guide

Mr. Anup Kumar Mishra,

AVP,IIFL SECURITIES,BBSR

Date:

iii
 ACKNOWLEDGEMENT:

I would like to express my gratitude to all those who gave me this opportunity to complete
this project in
IIFL Securities Ltd. I would like to thanks the institute authorities and my internal guide
Asso. Prof. Dr. Sanjukta Mishra first for providing me the opportunities to work with one
of the most prestigious organization.

My sincere gratitude to Mr. Anup Kumar Mishra, the AVP of IIFL Securities Ltd,
Bhubaneswar, give me an opportunity to work in this financial area of Security Market and
Mutual funds and helping me in gaining the maximum out of this whole process.

I also wish to acknowledge my sincere thanks to my internal guide Asso. Prof. Dr.
Sanjukta Mishra for the entire concern for their valuable advice and suggestions
throughout the internship.

I am grateful to all those who have directly or indirectly inspired me and helped me in my
successful accomplishment of this report.

iv
Sl. No. Title Page no.

Company Profile 01-03

Industry Profile 04-06

CHAPTER-01

Design of the study

1.1 Introduction 07

1.2 Significance of study 08

1.3 Objectives 09

1.4 Methodology 09

1.5 Review of literature 10-15

1.6 Limitations 15

1.7 Chapter scheme 15

Sl. No. Chapter 2 Page no.

Stock market an over view

2.1 Stock market 16

2.2 How stock market works 16-17

2.3 Functions of stock market 17-19

2.4 Stock market participants 19

2.5 Types of stock market 20-23

v
Sl. No. Chapter 3 Page No.

Data Analysis

3.1 Emerging stock market in India 23

3.1.1 NSE Emerge 23-24

3.1.2 Bombay stock exchange 24-26

3.2 Year effect of stock markets 26

3.2.1 Year effect of NSE 26-30

3.2.2 Year effect of BSE 30-33

3.3 Market capitalisation of stock markets 33-35

3.3.1 Market capitalisation of NSE 35-40

3.3.2 Market capitalisation of BSE 40-43

3.4 Risk and returns of stock markets 43-44

3.4.1 Risk and returns of NSE 44-47

3.4.2 Risk and returns of BSE 47-51

3.5 Analysing the trading pattern of stockholders. 51

3.5.1 Reason for trading in stock market 51-52

3.5.2 Source of information on stock market 52-54

3.5.3 Time horizon preferred for trading 55

3.5.4 Year of experience in trading 56

3.5.5 Mode of trading 57

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 Sl. No. Chapter 4 Page no.

Findings

4.1 Findings of the study 58-59

4.2 Conclusion 59-60

4.3 Bibliography 60

4.4 Websites 61

LIST OF TABLES
Table Title Page No.
No.
3.1 Year effect of NSE 29

3.2 Year effect of BSE 32-33

3.3 Top 10 companies based on market capitalisation 34

3.4 Market capitalisation of Nifty 36-40

3.5 Market capitalisation of Sensex 41-42

3.6 Annual return of Nifty 45

3.7 Annual return of Sensex 49

3.8 Reason for investing in stock market 51

3.9 Source of information on stock market 53

3.10 Time horizon preferred for trading 55

3.11 Year of experience in trading 56

3.12 Mode of trading 57

vii
 LIST OF FIGURES
Fig. No. Title Page No.

3.1 Year effect of NSE 30

3.2 Year effect of BSE 33

3.3 Risk and returns of NSE 46

3.4 Risk and returns of BSE 50

3.5 Reason for trading in stock market 52

3.6 Source of information on stock market 54

3.7 Time horizon preferred for stock market 55

3.8 Year of experience in stock market 56

viii
 COMPANY PROFILE:
IIFL Securities is a one-stop financial services shop, most respected for quality of its advice,
personalized service and cutting-edge technology. The IIFL (India Infoline) group, comprising
the holding company, India Infoline Ltd (NSE: INDIAINFO, BSE: 532636) and its subsidiaries,
is one of the leading players in the Indian financial services space. IIFL offers advice and
execution platform for the entire range of financial services covering products ranging from
Equities and derivatives, Commodities, Wealth management, Asset management, Insurance,
Fixed deposits, Loans, Investment Banking, GoId bonds and other small savings instruments.

A network of over 2,500 business locations spread over more than 500 cities and towns across
India facilitates the smooth acquisition and servicing of a large customer base.

• India Infoline Pvt Ltd:

IIFL has been awarded the ‘Best Broker, India’ by Finance Asia and the ‘Most improved
brokerage, India’ in the Asia Money polls. India Infoline was also adjudged as ‘Fastest Growing
Equity Broking House - Large firms’ by Dun &Bradstreet. A forerunner in the field of equity
research, IIFL’s research is acknowledged by none other than Forbes as ‘Best of the Web’ and
‘…a must-read for investors in Asia’. Our research is available not just over the Internet but also
on international wire services like Bloomberg, Thomson First Call and Internet Securities where
it is amongst one of the most read Indian brokers. India Infoline Limited is listed on both the
leading stock exchanges in India,

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 India Infoline Ltd:

India Infoline Limited is listed on both the leading stock exchanges in India, viz. the Stock
Exchange, Mumbai (BSE) and the National Stock Exchange (NSE) and is also a member of
both the exchanges. It is engaged in the businesses of Equities broking, Wealth Advisory
Services and Portfolio Management Services. It offers broking services in the Cash and
Derivatives segments of the NSE as well as the Cash segment of the BSE. It is registered with
NSDL as well as CDSL as a depository participant, providing a one-stop solution for clients
trading in the equities market.

 India Infoline Media and Research Services Limited:

The content services represent a strong support that drives the broking, commodities, mutual
fund and portfolio management services businesses. Revenue generation is through the sale of
content to financial and media houses, Indian as well as global. It undertakes equities research
which is acknowledged by none other than Forbes as 'Best of the Web' and '…a must read for
investors in Asia'. India Infoline’s research is available not just over the internet but also on
international wire services like Bloomberg (Code: IILL), Thomson First Calland Internet
Securities where India Infoline is amongst the most read Indian brokers

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 India Infoline Commodities Limited:

India Infoline Commodities Pvt Limited is engaged in the business of commodities broking.
Our experience in securities broking empowered us with the requisite skills and technologies to
allow us offer commodities broking as a contra-cyclical alternative to equities broking. We
enjoy memberships with the MCX and NCDEX, two leading Indian commodities exchanges,
and recently acquired membership of DGCX.

 India Infoline Marketing & Services:

India Infoline Marketing and Services Limited is the holding company of India Infoline
Insurance Services Limited and India Infoline Insurance Brokers Limited. India Infoline
Insurance Brokers Limited India Infoline Insurance Brokers Limited is a newly formed
subsidiary which will carry out the business of Insurance broking.

 India Infoline Investment Services Limited:

Consolidated shareholdings of all the subsidiary companies engaged in loans and financing
activities under one subsidiary. India Infoline Investment Services Private Limited consists of
the following step-down subsidiaries.
 India Infoline Distribution Company Limited (distribution of retail loan
products)
 Money line Credit Limited (consumer finance)
 India Infoline Housing Finance Limited (housing finance)
 IIFL (Asia) Private Limited:

IIFL (Asia) Private Limited is wholly owned subsidiary which has been incorporated in
Singapore to pursue financial sector activities in other Asian markets. Further to obtaining the
necessary regulatory approvals, the company has been initially capitalized at 1 million
Singapore dollars.

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 INDUSTRY PROFILE

The Indian broking industry is one of the oldest trading industries that have been around even
before the establishment of the BSE in 1875. Despite passing through number of changes in
the post liberalization period, the industry has found its way onwards sustainable growth. With
the purpose of gaining a deeper understanding about the role of the Indian stock broking
industry in the country’s economy, we present in this section some of the industry insights
gleaned from analysis of data received through primary research.

 A BRIEF HISTORY:

India Infoline was originally incorporated on October 18, 1995 as Probity Research and
Services Private Limited at Mumbai under the Companies Act,1956 with Registration No. 11
93797. India Infoline commenced operations as an independent provider of information,
analysis and research covering Indian businesses, financial markets and economy, to
institutional customers. India Infoline became a public limited company on April 28, 2000 and
the name of the Company was changed to Probity Research and Services Limited. The name
of the Company was changed to India Infoline.com Limited on May 23, 2000 and later to India
Infoline Limited on March 23, 2001.India Infoline broking services was launched under the
brand name of5paisa.com through our subsidiary, India Infoline Securities Private Limited
andwww.5paisa.com, the e-broking portal, was launched for online trading in July2000.

 Facilities

India Infoline’s main offices are located in approximately 4,000 square feet of office space
located in Mumbai, India. India Infoline Branches collectively occupy an additional 10,000
square feet of office space located throughout India, As on March 31, 2005, India Infoline has
73 branches across 36 locations in India.

 Terminals

Almost 52% of the terminals in the sample are based in the Western region of India, followed
by 25% in the North, 13% in the South and 10% in the East. Mumbai has got the maximum
representation from the West, Chennai from the South, New Delhi from the North and Kolkata
from the East.

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 Branches & Sub-Brokers

The maximum concentration of branches is in the North, with as many as 40%of all branches
located there, followed by the Western region, with 31%branches. Around 24% branches are
located in the South and East constitutes for 5% of the total branches of the total sample. In
case of sub-brokers, almost 55% of them are based in the South. West and North follow, with
30% and 11% sub-brokers respectively, whereas East has around 4% of total sub-brokers.

 Financial Markets
The financial markets have been classified as cash market, derivatives market, debt market and
commodities market. Cash market, also known as spot market, is the most sought after amongst
investors. Derivatives and commodities market. Firms that are into cash, derivatives and debt
are 7%. On the other hand, firms into cash and commodities are 3%, cash &debt market and
commodities alone are 2%. 4% firms trade in all the markets. In the cash market, around 34%
firms trade at NSE, 14% at BSE and 52%trade at both exchanges. In the equity derivative
market, 48% of the sampled broking houses are members of NSE and 7% trade at BSE, while
45% of the sample operate in both stock exchanges. Around 43% of the broking houses
operating in the debt market, trade at both exchanges with 31% and 26% firms uniquely at NSE
and BSE respectively.

 Products

The survey also revealed that in the past couple of years, apart from trading, the firms have
started offering various investment related value-added services. The sustained growth of the
economy in the past couple of years has resulted in broking firms offering many diversified
services related to IPOs, mutual funds, company research etc.

More than 50% of the sample broking houses deal in mutual fund investment services. The
average growth in assets under management in the last two years is almost 48%. Company
research is another lucrative area where the broking firms offer their services; more than 33%
of the firms are engaged in providing company research services.

Of the total sample of broking houses providing trading services, 52% are based in the West,
followed by 25% from North, 13% from South and 10% from the East. Around 50% of the
firms offering IPO related services are based in the West as compared to 27% in North, 13% in
South and 10% in East. In providing mutual funds services, the Western region was dominant

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amounting to 49%followed by 27% from North; The South and the East are almost at par with
13%and 11% Respectively.

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 CHAPTER 1 DESIGN OF THE STUDY
1.1 INTRODUCTION
The stock market refers to the collection of markets and exchanges where regular
activities of buying, selling, and issuance of shares of publicly-held companies take place.
Such financial activities are conducted through institutionalized formal exchanges or
over-the counter (OTC) marketplaces which operate under a defined set of regulations.
There can be multiple stock trading venues in a country or a region which allow
transactions in stocks and other forms of securities. The stock market or equity market
and is primarily known for trading stocks/equities, other financial securities - like
exchange traded funds (ETF), corporate bonds and derivatives based on stocks,
commodities, currencies, and bonds - are also traded in the stock markets. While both
terms - stock market and stock exchange - are used interchangeably, the latter term is
generally a subset of the former. If one says that she trades in the stock market, it means
that she buys and sells shares/equities on one (or more) of the stock exchange(s) that are
part of the overall stock market. The leading stock exchanges in the U.S. include the New
York Stock Exchange (NYSE), Nasdaq, and the Chicago Board Options Exchange
(CBOE). These leading national exchanges, along with several other exchanges operating
in the country, form the stock market of the U.S.
Stock market is a place where people buy/sell shares of publicly listed companies. It
offers a platform to facilitate seamless exchange of shares. In simple terms, if A wants to
sell shares of Reliance Industries, the stock market will help him to meet the seller who is
willing to buy Reliance Industries. However, it is important to note that a person can trade
in the stock market only through a registered intermediary known as a stock broker. The
buying and selling of shares take place through electronic medium. We will discuss more
about the stock brokers at a later point.
There are two main stock exchanges in India where majority of the trades take place -
Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE). Apart from
these two exchanges, there are some other regional stock exchanges like Bangalore Stock
Exchange, Madras Stock Exchange etc but these exchanges do not play a meaningful role
anymore.

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National Stock Exchange (NSE)

NSE is the leading stock exchange in India where one can buy/sell shares of publicly
listed companies. It was established in the year 1992 and is located in Mumbai. NSE has
a flagship index named as NIFTY50. The index comprises of the top 50 companies based
on its trading volume and market capitalization . This index is widely used by investors
in India as well as globally as the barometer of the Indian capital oil markets.

Bombay Stock Exchange (BSE)

BSE is Asia’s first as well as the oldest stock exchange in India. It was established in
1875 and is located in Mumbai. It has a total of ~5,295 companies listed out of which
~3,972 are available for trading as on August 21, 2017. BSE Sensex is the flagship index
of BSE. It measures the performance of the 30 largest, most liquid and financially stable
companies across key sectors.
Historically, stock trades likely took place in a physical marketplace. With the invent of
new technologies and due to the covid-19 pandemic, the stock market works
electronically, through the internet and online stockbrokers. Each trade happens on a
stock-by-stock basis, but overall stock prices often move in tandem because of news,
political events, economic reports and other factors.

1.2 SIGNIFICANCE OF THE STUDY

Stock market is the best indicator of how well the 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 market have been the regulated where people
can buy and sell shares of different companies. Stock markets today are emerging as a
very popular and a better financial market instrument for a large number of investors. A
large variety of stocks or shares are available in Indian stock market to cater the needs
and expectations of all types of investors. The rapid growth in the number of
intermediaries and stock market applications indicate the increasing importance of stock
market investments. Still large section of Indian investors has little information to take
prudent investment decisions. Such information drought is the breeding grounds for
misguidance, leading the investors to opt for a particular stock or share without an in-
depth analysis, resulting in the dissatisfaction over the return. Stock market enable
companies to be traded publicly and raise capital. The transfer of capital and ownership
is traded in a regulated, secure environment. Stock markets promote investment. The
raising capital allows companies to grow their businesses, expand operations and
create jobs in the economy. The present study analyses the important Indian stock
market (NSE and BSE) with respect to their market capitalisation, year effect, risk and
return from 2000 to 2020.The study also includes the much more data regarding the
history and functioning of BSE and NSE.

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1.3 OBJECTIVES:

1. To study about the emerging stock markets in india such as NSE and BSE.
2. To study about the year effect of the Indian stock market (BSE and NSE) from
2000 to 2020.
3. To examine the market capitalisation of Indian stock market (NSE and BSE)
from 2000 to 2020.
4. To examine the trend of risk and return of Indian stock market (NSE and BSE)
from 2000 to 2020.
5. To study about the type of trading preferred by the investors in stock market.

1.4 METHODOLOGY
The purpose of this study is to analyse the market capitalisation, year effect and the risk
and returns of the important stock market (NSE and BSE) of about 23 years from 2000 to
2023 and to analyse the investment pattern of traders in stock market. In order to
assess the objective both primary data and secondary data were used. The primary data
was collected from 30 respondents from bhubaneswar by using google form. The
secondary data was collected from various journals, articles, publications and online
websites.

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1.5 REVIEW OF LITERATURE

Kian –Pinhg Lim & Robert Brooks (2011) provides a systematic review of the weak‐form
market efficiency literature that examines return predictability from past price changes,
with an exclusive focus on the stock markets. Our survey shows that the bulk of the
empirical studies examine whether the stock market under study is or is not weak‐form
efficient in the absolute sense, assuming that the level of market efficiency remains
unchanged throughout the estimation period. However, the possibility of time‐varying
week‐form market efficiency has received increasing attention in recent years. We
categorize these emerging studies based on the research framework adopted, namely
nonoverlapping sub‐period analysis, time‐varying parameter model and rolling estimation
window.
Anju Bala (2013) evaluated that stock market is one of the most vibrant sectors in the
financial system, marketing an important contribution to economic development. Stock
market is a place where buyers and sellers of securities can enter into transaction to
purchase and sell shares, bonds, debentures etc. In other words, stock market is a
platform for trading various securities and derivatives. Further, it preforms an important
role of enabling corporate, entrepreneurs to raise resource for their companies and
business venture through public issues. Today long-term investors are interested to
invest in the stock market rather than invest anywhere.
Ross Levine & Sara Zervos empirically evaluate the relationship between stock market
development and long-term growth. The data suggest that stock market development is
positively associated with economic growth. Moreover, instrumental variables
procedures indicate a strong connection between the predetermined component of
stock market development and economic growth in the long run. While cross-country
regressions imply a strong link between stock market development and economic
growth, the results should be viewed as suggestive partial correlations that stimulate
additional research rather than as conclusive findings. Much work remains to be done to
shed light on the relationship between stock market development and economic
growth. Careful case studies might help identify causal relationships and further
research could be done on the time-series property of such relationships. Research
should also be done to identify policies that facilitate the development of sound
securities markets.
Samveg Patel is an Assistant Professor in S. K. Patel Institute of Management and
Computer Studies, Gandhinagar. His areas of interest include Financial Econometrics and
Financial Management. His most recent publication was in IUP Journal of Applied
Finance. The study investigates the effect of macroeconomic determinants on the

Page | 10
performance of the Indian Stock Market using monthly data over the period January
1991 to December 2011 for eight macroeconomic variables, namely, Interest Rate,
Inflation,
Exchange Rate, Index of Industrial Production, Money Supply, Gold Price, Silver Price &
Oil Price, and two stock market indices namely Sensex and S&P CNX Nifty.
Aman Srivastava (2010) evaluated that Stock market is an important segment of the
financial system of any country as it plays an important role in channelizing savings from
deficit sector to surplus sector. These stock markets have always been an area of serious
concern for policy makers, economists and researchers. They are often defined as the
barometer of any economy because they reflect the change and direction of pressure on
the economy. The movement and volatility in stock markets often reflect the direction
of any economy. The available literature suggests that since the inception of stock
markets researchers are making attempts to establish relationship between change in
macroeconomic factors and stock market returns.
Charles K.D, Adjasi, Nicholas B. Biekpe (2006) studies the effect of stock market
development on economic growth in 14 African countries in a dynamic panel data
modelling setting. Results largely show a positive relationship between stock market
development and economic growth. Further analyses, based on the level of economic
development and stock market capitalization, are also conducted. The results reveal that
the positive influence of stock market development on economic growth is significant
for countries classified as upper middle-income economies. On the basis of market
capitalization groupings, stock market developments play a significant role in growth
only for moderately capitalized markets. The general trend in results shows that low-
income African countries and less developed stock markets need to grow more and
develop their markets to elicit economic gains from stock markets.

L.M.C.S. (2006) study investigates the effects of macroeconomic variables on stock

prices in emerging Sri Lankan stock market using monthly data for the period from
September 1991 to December 2002. The multivariate regression was run using eight
macroeconomic variables for each individual stock. The null hypothesis which states that
money supply, exchange rate, inflation rate and interest rate variables collectively do
not accord any impact on equity prices is rejected at 0.05 level of significance in all
stocks. The results indicate that most of the companies report a higher R2 which justifies
higher explanatory power of macroeconomic variables in explaining stock prices.
Roman Horvath& Dargan Petrovski (2012) examine the international stock market
commovements between Western Europe vis-à-vis Central (Czech Republic, Hungary
and Poland) and South Eastern Europe (Croatia, Macedonia and Serbia) using
multivariate GARCH models in the period 2006–2011. Comparing these two groups, we
find that the degree of comovements is much higher for Central Europe. The correlation
of South Eastern European stock markets with developed markets is essentially zero. An
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exemption to this regularity is Croatia, with its stock market displaying a greater degree
of integration toward Western Europe recently, but still below the levels typical for
Central Europe.
Najeb M.H. Masoud (2013) tries to explore the causal link between stock market
performance and economic growth in terms of a simple theoretical and empirical
literature framework. Researchers hold diverse opinions regarding the importance of
stock markets playing a significant role in economic growth processes by performing the
following functions: improving liquidity, aggregating and mobilising capital, observing
managers and exerting corporate control, providing risk-pooling and sharing services
including investment levels. The growing theoretical literature argues that stock markets
are crucially linked to economic growth. The findings suggest a positive relationship
between efficient stock markets and economic growth, both in short run and long run
and there is evidence of an indirect transmission mechanism through the effect of stock
market development on investment. They are seen as providing a service that boosts
economic growth
Rafaqet Ali and Muhammad Afzal (2012) devastating global financial crisis started from
United States, spread all over the world and adversely affected real and financial sectors
of developed as well as developing countries. This crisis is called the first largest crisis
after the recession of 1930s. The prime aim of this study is to envisage the impact of
recent global financial crisis on stock markets of Pakistan and India. For this purpose,
daily data from 1st January 2003 to 31st August 2010 of KSE-100 and BSE-100 indices,
representing stock markets’ indices of Pakistan and India respectively, are used.
Avijan Dutta, Gautam Bandopadhyay & Suchismita Sengupta (2012) use logistic
regression (LR) and various financial ratios as independent variables to investigate
indicators that significantly affect the performance of stocks actively traded on the
Indian stock market. The study sample consists of the ratios of 30 large market
capitalization companies over a four-year period. The study identifies and examines
eight financial ratios that can classify the companies up to a 74.6% level of accuracy into
two categories – “good” or “poor” – based on their rate of return.
Gagan Deep Sharma & B.S Bodla (2010) states that financial markets of the world for
foreign capital has led to the increased financial integration among different countries.
This paper reviews and summarizes the research on the subject of integration and
dynamic linkages between stock markets in different parts of the world. Majority of the
studies suggested that market integration has increased significantly over the years,
within an international context. We find that not many studies have concentrated on
the interaction of Indian markets with the foreign markets, and most of the studies
concerning Indian have concentrated at the inter-relationship of Indian stock market
with those of the Developed nations. Therefore, there is a scope to study the inter-
linkages between Indian stock markets and those of the other SAARC nations.

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Peter Sellin (2002) gives a comprehensive view on the interaction between real stock
returns, inflation, and money growth, with a special emphasis on the role of monetary
policy. This is an area of research that has interested monetary and financial economists
for a long time. Monetary economists have been interested in the question whether
money has any effect on real stock prices, while financial economists have investigated
whether equity is a good hedge against inflation. Empirical studies show that money can
be helpful in predicting future stock returns. Empirical evidence also suggest that equity
is not a good hedge against inflation in the short run but may be so in the long run.
Alok Kumar Mishra (2004) attempts to examine whether stock market and foreign
exchange markets are related to each other or not. The study uses Granger’s Causality test
and Vector Auto Regression technique on monthly stock return, exchange rate, interest
rate and demand for money for the period April 1992 to March 2002. The major findings
of the study are (a) there exists a unidirectional causality between the exchange rate
and interest rate and between the exchange rate return and demand for money; (b)
there is no Granger’s causality between the exchange rate return and stock return.
Mara Madaleno & Carlos Pinho (2011) accounts for the time‐varying pattern of price
shock transmission, exploring stock market linkages using continuous time wavelet
methodology. In order to sustain and improve previous results regarding correlation
analysis between stock market indices, namely FTSE100, DJIA30, Nikkei225 and Bovespa,
we extend here such analysis using the Coherence Morlet Wavelet, considering financial
crisis episodes. Results indicate that the relation among indices was strong but not
homogeneous across scales, that local phenomena are more felt than others in these
markets and that there seems to be no quick transmission through markets around the
world, but yes, a significant time delay.
Vivek Rajput & Sarika Bobde (2016) study different techniques to predict stock price
movement using the sentiment analysis from social media, data mining. In this paper we
will find efficient method which can predict stock movement more accurately. Social
media offers a powerful outlet for people’s thoughts and feelings it is an enormous
evergrowing source of texts ranging from everyday observations to involved discussions.
This paper contributes to the field of sentiment analysis, which aims to extract emotions
and opinions from text. A basic goal is to classify text as expressing either positive or
negative emotion. Sentiment classifiers have been built for social media text such as
product reviews, blog posts, and even twitter messages. With increasing complexity of
text sources and topics, it is time to re-examine the standard sentiment extraction
approaches, and possibly to redefine and enrich the definition of sentiment.
Vanita Tripathi & Shruthi Sethi (2010) evaluated the Financial integration is one of the
buzz words in financial world. The co movement of share prices across the stock markets
in the world is a frequently experienced phenomenon. Especially during the times of
crisis, it is observed that the stock markets crash together. The oil crisis of 1973, the

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October 1987 crash, the South East Asian crisis of 1997 and the present financial crisis
evidence the same.
Marxia Oli Sigao (2007) investigated the effect of weather (temperature) factor, on the
returns and volatility of the Indian stock indices (BSE Sensex and S&P CNX Nifty). This
study examined how weather (temperature) affected the volatility of top stock market
indices in India. The study used the monthly data of weather in five sample cities
(Chennai, Mumbai, Delhi, Kolkata and Hyderabad) in India. This study applied statistical
tools like Descriptive Statistics, ADF Test and GARCH (1, 1) model and found that the
returns of sample stock market indices were influenced by weather (temperature) factor
in Chennai, Mumbai, Kolkata and Hyderabad in India. But the returns of stock indices
were not influenced by the temperature in Delhi City.
Juhi Ahuja (2012) presents a review of Indian Capital Market & its structure. In last
decade or so, it has been observed that there has been a paradigm shift in Indian capital
market. The application of many reforms & developments in Indian capital market has
made the Indian capital market comparable with the international capital markets. Now,
the market features a developed regulatory mechanism and a modern market
infrastructure with growing market capitalization, market liquidity, and mobilization of
resources. The emergence of Private Corporate Debt market is also a good innovation
replacing the banking mode of corporate Nance.
Suresh G Lalwani (1999) emphasized the need for risk management in the securities
market with particular emphasis on the price risk. He commented that the securities
market is a 'vicious animal' and there is more than a fair chance that far from improving,
the situation could deteriorate
Debjit Chakraborty (1997) in his study attempts to establish a relationship between
major economic indicators and stock market behaviour. It also analyses the stock market
reactions to changes in the economic climate. The factors considered are inaction,
money supply, and growth in GDP, scal debit and credit deposit ratio. To nd the trend in
the stock markets, the BSE National Index of Equity Prices (Natex) which comprises 100
companies was taken as the index. The study shows that stock market movements are
largely inuenced by, broad money supply, ination, C/D ratio and scal decit apart from
political stability.
Bhanwar Singh, Sahil Narang, (2020) in his study examines the impact of the COVID19
outbreak on the stock markets of G-20 countries. We find statistically significant
negative ARs in the four sub-event windows during the 58 days. Negative ARs are
significant for developing as well as developed countries. The findings of this study
reveal that cumulative average abnormal return (CAAR) from day 0 to day 43, ranging
from – 0.70 per cent to –42.69 per cent, is a consequence of increased panic in the stock
markets resulting from an increased number of COVID-19 positive cases in the G-20
countries.

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Rosy Call (2020) examines the herding behaviour at the industry level from national
stock exchange (NSE). Using daily stock closing prices of 191 firms, which constitute the
12 industry indices for the period from 1 January 2015 to 1 June 2020, the results for the
full sample period (1 January 2015 to 1 June 2020) and before COVID-19 outbreak
period (1 January 2015 to 29 January 2020) indicate the non-existence of herding
formation at the industry level, but they do suggest a strong evidence of anti-herding
behaviour. Further, the findings suggest that COVID-19 pandemic caused the formation
of herding behaviour at the industry level. The study facilitates investors to devise their
trading strategies in the regime of the COVID-19 pandemic.
T. P Madhusoodan in his study applies the variance ratio tests under the null hypotheses
of homoscedasticity as well as heteroscedasticity, to the Indian stock market. The tests
are conducted at the aggregate level of market indices and disaggregate level of
individual stocks. The results indicate that random walk hypothesis cannot be accepted
in the Indian market. Both the market indices the author tested showed persistent
behaviour, while most of the individual stocks also showed evidence on persistence. The
variance ratios were significant under heteroscedasticity in most of the cases where it
was significant under homoscedasticity assumption. This implies that heteroscedasticity
does not play a major role in the Indian market.

1.6 LIMITATION
The study was conducted mainly based on the secondary data. As our study was during
the time covid-19 pandemic and lock down, the data collection was narrowed by online
sources. Many online sites have given insufficient information and data. So, there was a
dependency on various sites. The unavailability of books and other physical materials
had been a major limitation of our project.

1.7 CHAPTER SCHEME

The first chapter shows the introduction, significance of the study, objective of the
study, review of literature, methodology, limitation and chapter scheme. The second
chapter includes stock market, How stock market works, functions of stock market,
stock market participants, Types of stock market, Overview of stock market. The third
chapter includes Indian stock market: NSE and BSE, Year effect of NSE and BSE, Market
capitalization of NSE and BSE, Risk and Return of NSE and BSE, Analysis of trading
pattern among stockholders. The fourth chapter includes Findings of the study,
Bibliography, Websites, Conclusion.

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 CHAPTER 2 STOCK MARKET AN OVER VIEW
2.1 STOCK MARKET

A stock market, equity market, or share market is the aggregation of buyers and
sellers of stocks (also called shares), which represent ownership claims on businesses;
these may include securities listed on a public stock exchange, as well as stock that is
only traded privately, such as shares of private companies which are sold to investors
through equity crowdfunding platforms. Investment in the stock market is most often
done via stockbrokerages and electronic trading platforms. Investment is usually made
with an investment strategy in mind.
Stocks can be categorized by the country where the company is domiciled. For example,
Nestlé and Novartis are domiciled in Switzerland and traded on the SIX Swiss Exchange,
so they may be considered as part of the Swiss stock market, although the stocks may
also be traded on exchanges in other countries, for example, as American depositary
receipts (ADRs) on U.S. stock markets.

2.2 HOW THE STOCK MARKET WORKS

Stock markets provide a secure and regulated environment where market participants
can transact in shares and other eligible financial instruments with confidence with zero-
to low-operational risk. Operating under the defined rules as stated by the regulator, the
stock markets act as primary market and as secondary markets.

As a primary market, the stock market allows companies to issue and sell their shares to
the common public for the first time through the process of initial public offerings (IPO).
This activity helps companies raise necessary capital from investors. It essentially means
that a company divides itself into a number of shares (say, 20 million shares) and sells a
part of those shares (say, 5 million shares) to common public at a price (say, $10 per
share).

To facilitate this process, a company needs a marketplace where these shares can be
sold. This marketplace is provided by the stock market. If everything goes as per the
plans, the company will successfully sell the 5 million shares at a price of $10 per share
and collect $50 million worth of funds. Investors will get the company shares which they
can expect to hold for their preferred duration, in anticipation of rising in share price
and any potential income in the form of dividend payments. The stock exchange acts as
a facilitator for this capital raising process and receives a fee for its services from the
company and its financial partners.

Following the first-time share issuance IPO exercise called the listing process, the stock
exchange also serves as the trading platform that facilitates regular buying and selling of

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the listed shares. This constitutes the secondary market. The stock exchange earns a fee
for every trade that occurs on its platform during the secondary market activity.
The stock exchange shoulders the responsibility of ensuring price transparency, liquidity,
price discovery and fair dealings in such trading activities. As almost all major stock
markets across the globe now operate electronically, the exchange maintains trading
systems that efficiently manage the buy and sell orders from various market
participants. They perform the price matching function to facilitate trade execution at a
price fair to both buyers and sellers.

A listed company may also offer new, additional shares through other offerings at a later
stage, like through rights issue or through follow-on offers. They may even buyback or
delist their shares. The stock exchange facilitates such transactions.

The stock exchange often creates and maintains various market-level and sector-specific
indicators, like the S&P 500 index or Nasal 100 index, which provide a measure to track
the movement of the overall market. Other methods include the Stochastic Oscillator
and Stochastic Momentum Index.

The stock exchanges also maintain all company news, announcements, and financial
reporting, which can be usually accessed on their official websites. A stock exchange also
supports various other corporate-level, transaction-related activities. For instance,
profitable companies may reward investors by paying dividends which usually comes
from a part of the company’s earnings. The exchange maintains all such information and
may support its processing to a certain extent. (For related reading, see "How Does the
Stock Market Work?")

2.3 FUNCTIONS OF A STOCK MARKET

A stock market primarily serves the following functions:

Fair Dealing in Securities Transactions: Depending on the standard rules of demand

and supply, the stock exchange needs to ensure that all interested market participants
have instant access to data for all buy and sell orders thereby helping in the fair and
transparent pricing of securities. Additionally, it should also perform efficient matching
of appropriate buy and sell orders.
For example, there may be three buyers who have placed orders for buying Microsoft
shares at $100, $105 and $110, and there may be four sellers who are willing to sell
Microsoft shares at $110, $112, $115 and $120. The exchange (through their computer
operated automated trading systems) needs to ensure that the best buy and best sell
are matched, which in this case is at $110 for the given quantity of trade.

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Efficient Price Discovery: Stock markets need to support an efficient mechanism for
price discovery, which refers to the act of deciding the proper price of a security and is
usually performed by assessing market supply and demand and other factors associated
with the transactions.

Say, a U.S.-based software company is trading at a price of $100 and has a market
capitalization of $5 billion. A news item comes in that the EU regulator has imposed a
fine of $2 billion on the company which essentially means that 40 percent of the
company’s value may be wiped out. While the stock market may have imposed a trading
price range of $90 and $110 on the company’s share price, it should efficiently change
the permissible trading price limit to accommodate for the possible changes in the share
price, else shareholders may struggle to trade at a fair price.

Liquidity Maintenance: While getting the number of buyers and sellers for a particular
financial security are out of control for the stock market, it needs to ensure that
whosoever is qualified and willing to trade gets instant access to place orders which
should get executed at the fair price.

Security and Validity of Transactions: While more participants are important for
efficient working of a market, the same market needs to ensure that all participants are
verified and remain compliant with the necessary rules and regulations, leaving no room
for default by any of the parties. Additionally, it should ensure that all associated entities
operating in the market must also adhere to the rules, and work within the legal
framework given by the regulator.
Support All Eligible Types of Participants: A marketplace is made by a variety of
participants, which include market makers, investors, traders, speculators, and hedgers.
All these participants operate in the stock market with different roles and functions. For
instance, an investor may buy stocks and hold them for long-term spanning many years,
while a trader may enter and exit a position within seconds. A market maker provides
necessary liquidity in the market, while a hedger may like to trade in derivatives for
mitigating the risk involved in investments. The stock market should ensure that all such
participants are able to operate seamlessly fulfilling their desired roles to ensure the
market continues to operate efficiently.

Investor Protection: Along with wealthy and institutional investors, a very large number
of small investors are also served by the stock market for their small number of
investments. These investors may have limited financial knowledge, and may not be
fully aware of the pitfalls of investing in stocks and other listed instruments. The stock
exchange must implement necessary measures to offer the necessary protection to such
investors to shield them from financial loss and ensure customer trust.

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For instance, a stock exchange may categorize stocks in various segments depending on
their risk profiles and allow limited or no trading by common investors in high-risk
stocks. Exchanges often impose restrictions to prevent individuals with limited income
and knowledge from getting into risky bets of derivatives.

Balanced Regulation: Listed companies are largely regulated and their dealings are
monitored by market regulators, like the Securities and Exchange Commission (SEC) of
the U.S. Additionally, exchanges also mandate certain requirements – like, timely filing
of quarterly financial reports and instant reporting of any relevant developments - to
ensure all market participants become aware of corporate happenings. Failure to adhere
to the regulations can lead to suspension of trading by the exchanges and other
disciplinary measures.
Regulating the Stock Market
A local financial regulator or competent monetary authority or institute is assigned the
task of regulating the stock market of a country. The Securities and Exchange
Commission (SEC) is the regulatory body charged with overseeing the U.S. stock
markets. The SEC is a federal agency that works independently of the government and
political pressure. The mission of the SEC is stated as: "to protect investors, maintain
fair, orderly, and efficient markets, and facilitate capital formation." 1

2.4 STOCK MARKET PARTICIPANTS

Along with long-term investors and short-term traders, there are many different types
of players associated with the stock market. Each has a unique role, but many of the
roles are intertwined and depend on each other to make the market run effectively.

• Stockbrokers, also known as registered representatives in the U.S., are the licensed
professionals who buy and sell securities on behalf of investors. The brokers act as
intermediaries between the stock exchanges and the investors by buying and
selling stocks on the investors' behalf. An account with a retail broker is needed to
gain access to the markets.
• Portfolio managers are professionals who invest portfolios, or collections of
securities, for clients. These managers get recommendations from analysts and
make the buy or sell decisions for the portfolio. Mutual fund companies, hedge
funds, and pension plans use portfolio managers to make decisions and set the
investment strategies for the money they hold.
• Investment bankers represent companies in various capacities, such as private
companies that want to go public via an IPO or companies that are involved in

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 pending mergers and acquisitions. They take care of the listing process in
compliance with the regulatory requirements of the stock market.

2.5 TYPES OF STOCK MARKET

1.Classification based on stock classes

There are some stocks that do not give the shareholders the power to vote at the annual
meetings where the decisions regarding the management of the company and such
issues take place. Unlike these stocks, there are some other stocks that allow
shareholders to participate in the decision making in the company matters, by casting
their votes. Another kind of stocks offer shareholders the opportunity to cast multiple
votes in matters pertaining to different aspects of the company.

2.Classification based on market capitalization

Stocks can be classified on the basis of the market capitalization of the company, which
is the total shareholding of a company. This is calculated by multiplying the current price
of the company stock with the total number of shares outstanding in the market. Listed
below are the types of stocks based on market capitalization.

i. Large Cap Stocks

These are often stocking of Blue-chip companies which are established enterprises with
large reserves of cash at their disposal. It is interesting to note that the larger size of the
large cap companies does not mean that they grow more rapidly. In fact, it is the small
stock companies that tend to outperform them over the longer time frame. But large
cap stocks do come with the benefit of allowing the investors to reap higher dividends in
comparison to the smaller and mid cap companies’ stocks, ensuring that the capital is
preserved over the long-term period.

ii. Mid Cap Stocks

These are the stocks of medium sized companies that have a market capitalization of
INR 250 Crore to about INR 4000 crore. These companies have a well recognize name in
the market which brings along the benefit of potential for growth, as well as the stability
that is usually accompanied with being a seasoned player in the market. Mid cap
companies have a good track record of steady growth and are very similar to blue chip
stocks barring their size. In the long term these stocks do and grow well.
iii. Small Cap Stocks
As is suggestive of the name, small cap stocks have the smallest value in the market as
compared to its counterparts. These are small sized companies that have a market
capitalization of up to INR 250 and have the potential to grow at a good pace in the
future. Investors who are willing to commit to a long term and are not very particular
about the current dividends, and are willing to stand their ground during price volatility,

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can make significant gains in the future. As an investor you can buy these stocks when
they are available at a cheap price during the initial stage of the company. There is no
surety about the how the company will perform in the market since they are relatively
new. Because these small cap companies are new, they are highly volatile and their
growth impacts the value and revenue of the company to a huge extent.

3. Classification based on ownership

Based on wonder ship, there are three types of stocks that investors can own which
offer them different rights and growth potential.

i. Preferred & common stocks

Preferred stocks offer investors a fixed amount of dividend every year unlike common
stocks. The price of preferred stocks is not as volatile as a common stock but it is
common stock that gets the benefit of priority when the company has surplus money to
distribute. At the time of company liquidation, it is the company’s creditors, its bond
holders, debenture holders who get priority over the preferred shareholders. Common
stockholders have voting rights, a privilege preferred shareholder do not enjoy.

ii. Hybrid Stocks

There are companies that offer preferred shares with the option of converting them to
common shares, with conditions, at a certain point in time. These are known as hybrid
stocks or convertible preferred shares and may or may not have voting rights.
iii. Stocks with embedded derivative options
Stocks that come with the embedded derivative option means that they can be ‘callable’
or ‘potable’ and are not as commonly available. A ‘callable’ stock has the option of being
bought back by the company for a certain price at a certain point in time. Similarly, a
‘potable’ stock offers its holder to sell it to the company at a certain price and time.

4. Classification based on dividend payment

I. Growth Stocks
These stocks do not pay high dividends as the company prefers to reinvest the earnings
to enable it to grow faster, hence, the name growth stocks. The value of the shares of
the company rises with the fast growth rate which in turn allows investors to profit
through higher returns. It is best suited for those investors who seek long term growth
potential and not an immediate second source of income. Growth stocks carry higher
risk than their counterpart.

ii. Income Stocks

In comparison to growth stocks, income stocks hand out a higher dividend in relation to
the price of the share. Higher dividends translate to higher income; hence, the name
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Income Stocks. Income stocks are indicative of a stable company that can afford
consistent dividends but these are also companies that do not promise very high
growth. This means that the stock price of such companies may not rise much. Income
stocks also includes preferred stocks. IT is a good investment for those investors who
seek a secondary source of income through relatively low risk stocks. The dividend
income in income stocks is not taxed and thus is great for investors of low risk profile
who want long term investment. You may want to use the dividend yield measure to
find such stocks that offer high dividends.
5. Classification based on fundamentals
Investors who believe that a share price must equal the intrinsic value of the company’s
share, the value investing investors, compare the share prices with components like per
share earnings, profits etc. to reach at an intrinsic value per share.

I. Overvalued Shares

These are shares with prices that exceed the intrinsic value and are considered
overvalued.

ii. Undervalued Shares

These types of shares are popular amongst the value investors as they believe that the
price of the share would rise in the future.

6. Classification based on Risk

The risk level of stocks differs depending on the share price fluctuations. Stocks with
higher risk reward the investor with higher returns, while low risk stocks generate low
returns.

I. Beta Stocks
The beta or the measure of risk is derived by calculating the price volatility of the stock.
Beta can be positive or negative which denotes whether it moves in sync with the
market or against it. The higher the beta, higher is the risk quotient of the stock. If the
beta value is more than 1 it means that the stock is more volatile than the market. A lot
of investors with knowledge of this measure use it to make their investment decisions.

ii. Blue Chip Stocks

Blue chip stocks are stocks of those companies that have lower liabilities and stable
earnings and which pay regular dividends. These very large and well-recognised
companies that have a long history of sound financial performance are a good bet for
Investors who seek safer avenues of investment.
7. Classification based on price trends
This classification is based on the movement of stock prices in tandem with or against
the company earnings.

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I. Defensive Stocks
These are stocks that are somewhat unfazed by economic conditions and are preferred
when the market conditions are poor. Food and beverage companies are a common
example.

ii. Cyclical Stocks

Stocks of companies that are greatly affected by economic conditions and see high price
fluctuations with market changes are cyclical stocks. These types of stocks grow rapidly
during the boom cycle but the growth is slowed down in the slow economy. Automobile
stocks fall in this category.

CHAPTER 3 DATA ANALYSIS

3.1 EMERGING STOCK MARKETS IN INDIA

3.1.1 NSE EMERGE

NSE EMERGE is NSE’s new initiative for Small and medium-sized enterprises (SME) &
Start-up companies in India. These companies can get listed on NSE without an Initial
public offering (IPO). This platform will help SME’s & Start-ups connect with investors
and help them with the raising of funds. On 8 July 2015, Sucheta Dalal wrote an article
on Money life alleging that some NSE employees were leaking sensitive data related to
highfrequency trading or co-location servers to a select set of market participants so
that they could trade faster than their competitors. NSE alleged defamation in the article
by Money life. On 22 July 2015, NSE filed a ₹1 billion (US$14 million) suit against
Money life. However, on 9 September 2015, the Bombay High Court dismissed the case
and fined NSE ₹5 million (US$70,000) in this defamation case against Money life (The
High Court asked NSE to pay ₹150,000 (US$2,100) to each journalist Debashis Basu and
Sucheta Dalal and the remaining ₹4.7 million (US$66,000) to two hospitals.
The Bombay High Court has stayed the order on costs for a period of two weeks,
pending the hearing of the appeal filed by NSE. In May 2019 SEBI has debarred NSE from
accessing the markets for a period of 6 months. While NSE confirmed this will not
impact their functioning, they won’t be able to list their IPO or introduce any new trading
products for that period. Additionally, the watchdog also ordered NSE to disgorge Rs
624.9 crores (along with accrued interest for the period), an amount equivalent to the
profits it made from the unfair trade practice of co-location servers they provided during
the period from 2010–11 to 2013–14. The board also passed orders against 16
individuals including former managing directors and CEOs Ravi Narain and Chitra
Ramakrishna ordering them to disgorge 25% of their salaries during that period along
with interest. All money is to be paid into the Investor protection and education fund.
These individuals have also been debarred from the markets or holding any position in a
listed company for a period of five years. Crash of 1991After economic liberalisation in

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India in 1991, the stock market saw a number of cycles of booms and busts, some
related to scams such as those engineered by players such as Harshad Mehta and Ketan
Parekh, some due to global events and a few due to circular trading, rigging of prices
and the irrational exuberance of investors leading to bubbles that finally burst.
Crashes of 2020

On 1 February 2020, as the FY 2020-21 Union budget was presented in the lower house
of the Indian parliament, Nifty fell by over 3% (373.95 points) while Sensex fell by more
than 2% (987.96 points). The fall was also weighed by the global breakdown amid
coronavirus pandemic cantered in China. On 28 February 2020, Sensex lost 1448 points
and Nifty fell by 432 points due to growing global tension caused by coronavirus, which
W.H.O said has a pandemic potential. Both BSE and NSE fell for the entire five days of
the week ending with the worst weekly fall since 2009.
On March 4 and 6, markets fell by around 1000 points and several crores of wealth was
wiped out. On 6 March 2020, Yes Bank was taken over by RBI under its management for
reconstruction and will be merged with SBI. This was done to ensure smooth functioning
of the bank as it was struggling for couple of years to cope up with heavy pressure due
to cleaning of bad loans. On 9 March 2020, the Sensex fell by 1,941.67 points, while
Nifty50 broke down by 538 points. The fear of COVID-19 outbreak has created havoc all
over the globe and India is no exception. Further, the recent Yes, Bank crisis also made
the markets fell. The markets ended in red with Sensex closing on 35,634.95 and Nifty-
50 on 10,451.45.
On 12 March 2020, the Sensex fell by 2919.26 points (-8.18%), the worst continuation of
the week in the history while Nifty-50 broke down by 868.25 points (-8.30%) amid World
Health Organisation (WHO) declaring Coronavirus outbreak as “pandemic”. Sensex
ended to 33-month low of 32778.14.On 16 March 2020, Sensex plunged by 2,713.41
points (around 8%), the second worst fall in its history. On the other hand, Nifty ended
below 9200–mark at 9,197.40 due to global economic recession. However, the Sensex
continued to fall straight for 4–continuous days till 19 March 2020, losing 5815 points
during the period. On 23 March 2020, Sensex lost 3,934.72 points (13.15%) and Nifty
plunges 1,135 points (12.98%) at 7610.25 as coronavirus-led lockdowns across the world
triggered fears of a recession. These are now the lowest levels since 2016. It’s witnessing
the biggest weekly loss since October 2008, as the increasing number of coronavirus
cases in India as well as globally.

3.1.2 BOMBAY STOCK EXCHANGE (BSE)

BSE Limited, formerly known as the Bombay Stock Exchange is an Indian government
owned stock exchange located on Dalal Street in Mumbai. Established in 1875, it is Asia's
oldest stock exchange. The BSE is the world's 7th largest stock exchange with an overall
market capitalization of more than US$2.8 trillion on as of February 2021. While Bombay
Stock Exchange Limited is now synonymous with Dalal Street, it was not always so. In

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the 1850s, five stock brokers gathered together under Banyan tree in front of Mumbai
Town Hall, where Horniman Circle is now situated. A decade later, the brokers moved
their location to another leafy setting, this time under banyan trees at the junction of
Meadows Street and what was then called Esplanade Road, now Mahatma Gandhi Road.
With a rapid increase in the number of brokers, they had to shift places repeatedly. At
last, in 1874, the brokers found a permanent location, the one that they could call their
own. The brokers group became an official organization known as "The Native Share &
Stock Brokers Association" in 1875. The Bombay Stock Exchange continued to operate
out of a building near the Town Hall until 1928. The present site near Horniman Circle
was acquired by the exchange in 1928, and a building was constructed and occupied in
1930. The street on which the site is located came to be called Dalal Street in Hindi
(meaning "Broker Street") due to the location of the exchange.
On 31 August 1957, the BSE became the first stock exchange to be recognized by the
Indian Government under the Securities Contracts Regulation Act. Construction of the
present building, the Phiroze Jeejeebhoy Towers at Dalal Street, Fort area, began in the
late 1970s and was completed and occupied by the BSE in 1980. Initially named the BSE
Towers, the name of the building was changed soon after occupation, in memory of Sir
Phiroze Jamshedji Jeejeebhoy, chairman of the BSE since 1966, following his death.
BSE established India INX on 30 December 2016. India INX is the first international
exchange of India. Mr. Ashish Kumar Chauhan. Shri Ashish Kumar Chauhan is the MD &
CEO of BSE (Bombay Stock Exchange), the first stock exchange of Asia. He is one of the
founders of India's National Stock Exchange ("NSE") where he worked from 1992 to
2000. Based in Mumbai, India, the BSE lists close to 6,000 companies and is one of the
largest exchanges in the world, along with the New York Stock Exchange (NYSE), Nasdaq,
London Stock Exchange Group, Japan Exchange Group, and Shanghai Stock Exchange.
The BSE has helped develop India's capital markets, including the retail debt market, and
has helped grow the Indian corporate sector. The BSE is Asia's first stock exchange and
also includes an equities trading platform for small-and-medium enterprises (SME). BSE
has diversified into providing other capital market services including clearing,
settlement, and risk management. The BSE has been instrumental in developing India's
capital markets by providing an efficient platform for the Indian corporate sector to raise
investment capital. In the 1850s, stockbrokers would conduct business under a banyan
tree in front of the Mumbai town hall. After a few decades of various meeting locations,
Dalal Street was formally selected in 1874 as the location for the Native Share and Stock
Brokers' Association, the forerunner organization that would eventually become the
BSE. Mumbai is now a major financial center in India and Dalal Street is home to a large
number of banks, investment firms, and related financial service companies. The
importance of Dalal Street to India is simisimiz.
In the third week of January 2008, the SENSEX experienced huge falls along with other
markets around the world. On 21 January 2008, the SENSEX saw its highest ever loss of
1,408 points at the end of the session. The SENSEX recovered to close at 17,605.40 after
Page | 25
it tumbled to the day's low of 16,963.96, on high volatility as investors panicked
following weak global cues amid fears of a recession in the US.
The next day, the BSE SENSEX index went into a free fall. The index hit the lower circuit
breaker in barely a minute after the markets opened at 10 am. Trading was suspended
for an hour. On reopening at 10.55 am, the market saw its biggest intra-day fall when it
hit a

low of 15,332, down 2,273 points. However, after reassurance from the market bounced
back to close at 16,730 with a loss of 875 points. Over the course of two days, the BSE
SENSEX in India dropped from 19,013 on Monday morning to 16,730 by Tuesday evening
or a two-day fall of 13.9%. Less than a month later, on 11 February 2008, the SENSEX
lost 833.98 points, when Reliance Power fell below its IPO price in its debut trade after a
high-profile public offer. On 2015, The index crossed the historical mark of 30,000 after
repo rate cut announcement by RBI. The index plummeted by over 1,624.51 points on
24 August 2015, the then worst one-day point plunge in the index's history. On 9 March
2020, Sensex tumbled down by 1941.67 points amid the fears of and crisis. This was the
second worst single-day fall in the history, where the investors lost ₹ 6.50 lakh crores.
While on 12 March 2020, the index plunged down by 2919.26 points, the second–worst
fall in the history, ending in red to a 33-month low at 32,778.14. The fall wiped off ₹ 11.2
lakh crores wealth. On March, trading was halted for 45 minutes for the first time in 12
years since January 2008 due to lower circuit. Sensex touched a low of 29,687.52 down
by 3090.62 points (or 9.43%). However, after the 45-minute halt, the index saw biggest
intra-day recovery by 5,380 points to end up by 1325 points. Continuing the losing
streak, wealth worth ₹14.22 lakh crore was erased on 23 March 2020 as BSE SENSEX
lost 3,934.72 points to end at 25,981.24. As on 21 January 2021, Sensex has recovered to
50,167.71

3.2 YEAR EFFECT OF STOCK MARKETS

3.2.1 YEAR EFFECT OF NSE
Indian benchmark indices posted their biggest daily percentage decline in 10 months on
Friday, as a North Korean threat to carry out a hydrogen bomb test in the Pacific Ocean
rattled global markets. The Indian government’s stimulus spending plan and jitters that
it would widen the fiscal deficit also contributed to the decline, which was led by bank
stocks. The National Stock Exchange’s 50-share Nifty index dipped 1.56% to close below
the psychological 10,000-point mark at 9,964.40 points. The BSE Sensex tumbled 1.38%
to end at 31,922.44 points. North Korea struck back at US President Donald Trump’s
threats to destroy it, with Kim Jong Un warning of the “highest level of hard-line
countermeasure in history" and his foreign minister suggesting that could include testing
a hydrogen bomb in the Pacific Ocean.

Page | 26
Indian stocks are the most expensive among peers, prompting concerns about
valuations overshooting fundamentals amid slow economic growth and an elusive
corporate earnings recovery. “Impact of good and services tax (GST) could be more
prolonged and earnings recovery could be delayed by a quarter or two. As a result, a
market correction at this juncture should not come as a surprise," said Ravi Gopala
Krishnan, head of equities at Canara Robeco Mutual Fund. The price-to-earnings ratio
for FY19 is 18.48 and 18.18 for the Sensex and Nifty respectively, whereas that for MSCI
Emerging Markets is 12.76 and MSCI World 16.50. Analysts described the correction in
the Indian markets as healthy and long overdue.
Most stocks in the capital goods, healthcare and metals sectors were under pressure on
Friday. Among sectoral indices, the BSE Metal index fell 3.9%, reacting to China’s credit
downgrade by S&P Global Ratings, triggering concerns that demand from the world’s
second-biggest economy may decline. So far this year, FIIs have bought a net $6.4 billion
worth of stocks, but sold $761.55 million worth of Indian equities in September.
Even as the Nifty surged to fresh record high on April 3 2019, it’s intriguing to note that
the index has grown by a whopping 11.70 times in the last 25 years. Notably, the Nifty
surged past its earlier high of 11,760.20 in the morning trade on Tuesday, on the back of
sustained FII flows ahead of the general elections due to fresh optimism that PM
Narendra Modi will return to power in 2019, say experts. Investors are convinced that
Modi will retain power in the upcoming election 2019, veteran investor Raamdeo
Agrawal said in an interview to ET Now.
Journey to 10,000: After the Narendra Modi-led government rose to power, the Nifty
scaled the 7,000-mark on 12 May 2014. On the back of a euphoria, it soon surged past
the 8000mark on 01 September 2014. The next 1,000 took a while, as the Nifty breached
9,000 on 14 March 2017. “In 2017, Nifty spurred too the 9,000-mark backed by strong
buying from foreign investors,” noted a Kotak report. The Nifty finally crossed the much
awaited 5figure mark of 10,000 on 25th July 2017, amid good monsoons, strong
corporate earnings and the rollout of Goods and Services Tax (GST).
Gain to 11,000: Nifty crossed the 11,000-mark on January 23rd 2018, on the back of fall
in US crude oil prices and the World Bank’s positive update on Indian economy. The
move was significant. as it came ahead of Union Budget 2018 presented on February 1
later that year. Record high of 11,761, the Nifty hit a fresh record high of 11,761 on
Monday. The index gained nearly 17% from record lows hit on October 26, 2018. In the
near-term, the Nifty could top the crucial 12,000-mark. “We remain positive on markets
in long-term, but one can expect some profit booking from 12,000 levels, and near-term
volatility from events like credit policy, election results etc. cannot be ruled out. Any
decline to around the 11,200 levels would be a good opportunity to create long
positions,” B Gopkumar, ED & CEO, Reliance Securities said as it came ahead of Union
Budget 2018 presented on February 1 later that year.
Record high of 11,761

Page | 27
This morning, the Nifty hit a fresh record high of 11,761 on Monday. The index gained
nearly 17% from record lows hit on October 26, 2018. In the near-term, the Nifty could
top the crucial 12,000-mark. “We remain positive on markets in long-term, but one can
expect some profit booking from 12,000 levels, and near-term volatility from events like
credit policy, election results etc. cannot be ruled out. Any decline to around the 11,200
levels would be a good opportunity to create long positions,” B Gopkumar, ED & CEO,
Reliance Securities said. The S&P BSE Sensex and NSE Nifty 50 indices ended on a flat
note on last session of 2020 as losses in FMCG, IT and state-run banking offset gains in
metal, pharma and media shares. Both benchmarks traded on a choppy note for the
most part of the day, as derivatives (futures and options) contracts for the month of
December expired at the end of the session. The Nifty touched a record high of
14,024.85 during the session and the Sensex touched an all-time high of 47,896.97.
The Sensex ended 5 points higher at 47,751 and Nifty 50 index closed unchanged at
13,982. In the calendar year 2020, the Sensex rallied 15.75 per cent and the Nifty
climbed 14.90 per cent, making it the best year for the indices since 2017, news agency
Reuters reported. For the decade ended 2020, the Sensex has gained a whopping 173
per cent and Nifty surged 169 per cent. A gush of liquidity by foreign investors has lifted
the benchmarks to new highs, according to analysts. On Wednesday, foreign
institutional investors (FIIs) had net bought Indian shares worth ₹ 1,824 crore. So far this
calendar year, FIIs have net purchased domestic equities worth $22.44 billion but net
sold assets worth $14 billion in the debt markets, NSDL data showed.
Six of 11 sector gauges compiled by the National Stock Exchange ended higher, led by
the Nifty Metal and Pharma indices, which rose 0.7 per cent each. Auto, financial
services, media and realty shares also witnessed buying interest. On the other hand, PSU
banking, FMCG, IT and private banking shares witnessed mild selling pressure. Mid- and
small-cap shares witnessed buying interest, with the Nifty Midcap 100 index rising 0.5
per cent and the Nifty Small cap 100 index gaining 0.3 per cent. HDFC was the top Nifty
gainer, rising 1 per cent to close at ₹ 2,550 apiece on the BSE. Sun Pharma, Divi's Labs,
ICICI Bank, Asian Paints, Dr Reddy's Labs, Hindalco and HCL Technologies were also
among the gainers. NSE believes that Small and Medium Enterprises (SME) are crucial
not only for economic growth, but also critical for employment and inclusive growth. As
of March 31, 2019, there are 189 SME companies listed on NSE Emerge (SME Platform),
of which 62 were listed during 2018-19 raising more than H1,048 crores. During fiscal
2019, the aggregate value of Initial Public Offerings (IPOs) and Offer for Sale (OFS) was
around H208.33 billion. During FY2019, the number of listed companies available for
trading on NSE was 1,884 compared to 1,758 at the end of March 31, 2018. The market
capitalisation of securities available for trading on the Capital Market segment has
increased by 6.34% during 2018-19.

Page | 28
 Table 3.1 YEAR EFFECT OF NSE

Year Year effect

2000 1264
2001 1059
2002 1094
2003 1880
2004 2081
2005 2837
2006 3966
2007 6139
2008 2959
2009 5201
2010 6185
2011 4624
2012 5905
2013 6304
2014 8283
2015 7946
2016 8786
2017 10531
2018 10863
2019 12168
2020 13982
2021 17354
2022 18105.30
2023 19794.70
Source:www.nseindia.com

Page | 29
 Fig: 3.1

Out of the total market capitalisation of H1,49,34,227 crores as on March 29, 2019,
H1,05,921 crores were contributed by newly listed companies. Introduction of an
electronic platform for the IPO process has resulted in paperless filing and significantly
easing the process for the issuers. Intermediaries and issuers no longer need to be
present at Exchange premises for completing the activity of allotment. NSE has taken
proactive measures by sending email alerts to shareholders of listed companies alerting
them on non-compliances and impending suspension of the listed company in which
they hold shares which shareholders have found to be very valuable. NSE has accorded
high priority for resolution of investor complaints and the Investor Services Cell
facilitates resolution of complaints of investors against the listed corporate entities and
NSE members.
3.2.2 YEAR EFFECT OF BSE
Ariel (1987) found that, on an average, rates of return were significantly lower during
the second half of the month as compared to the first half. This research found that
month of the year effect occurred in USA as well as few other developed countries. The
research revealed that the return was higher in January month and in December was
generally lower in comparison to returns in other months. Similar results were found by
Jeffrey Jaffe and Randolph Westfield (1988) in their investigation of stock markets of
Australia, UK, Japan, and Canada. This research found that returns over the second half
of the month were lower than the returns over the first half for Australia, UK and
Canada. Wachtel (1942) was the first researcher to investigate the January Effect.
Haugen and Lakonishok (1988) studied the January Effect in detail and has authored a

Page | 30
book on this well-known calendar effect. Kok Kim Lian (2002) studied the Year of Month
Effect and Half Month Effect in the Asia Pacific stock markets.
The government had proposed to increase the surcharge levied on top of the applicable
income tax rate from 15 per cent to 25 per cent for those with taxable incomes between
Rs 2 crore and Rs 5 crore, and to 37 per cent for those earning over Rs 5 crore, taking the
effective tax rate for them to 39 per cent and 42.74 per cent, respectively. The Sensex
rallied 1,922 points, or 5.3 per cent, to end at 38,015, while the Nifty surged 569 points,
or 5.3 per cent, to close at 11,274.2.That apart, the government announced a slew of
policy reforms, which included strategic sales of select public sector enterprises (PSEs)
merger of select public sector banks (PSBs), and an alternative investment fund of Rs
25,000 crore for the realty sector among others. US-China trade talks: At the global
level, flip-flop by the United States (US) on trade related issues, especially with China,
kept market participants on tenterhooks throughout the year.
In November, market scaled fresh peaks one after another on the optimism around
trade talks between the two largest economies. In the latest development, both the
countries have agreed on the terms of a “phase one” trade deal that reduces some US
tariffs on Chinese goods while boosting Chinese purchases of American farm, energy and
manufactured goods. Pre COVID-19, market capitalisation on each major exchange in
India was about $2.16 trillion. The 2019 stock market rally was limited to 8-10 stocks
within the large caps. The Sensex returned around 14% (excluding dividends) for the
year 2019 but prominently featured blue-chip companies such as HDFC Bank, HDFC, TCS,
Infosys, Reliance, Hindustan Unilever, ICICI Bank and Kotak Bank, without which Sensex
returns would have been negative? However, in the start of 2020, there was overall
recovery which led to both NSE and BSE traded at their highest levels ever, hitting peaks
of 12,362 and 42,273 respectively. At the beginning of the year, there were close to 30
companies that were expected to file IPO’s. The market conditions were generally
favourable as they witnessed record highs in mid-January.
Ever since COVID 19 strike, markets loom under fear as uncertainty prevails. lt has sent
markets around the world crashing to levels not witnessed since the Global Financial
Crisis of 2008. Following the strong correlation with the trends and indices of the global
market as BSE Sensex and Nifty 50 fell by 38 per cent. The total market cap lost a
staggering 27.31% from the start of the year. The stock market has reflected the
sentiments this pandemic unleashed upon investors, foreign and domestic alike.
Companies have scaled back; layoffs have multiplied and employee compensations have
been affected resulting in negligible growth in the last couple of months. Certain sector
such as hospitality, tourism and entertainment have been impacted adversely and stocks
of such companies have plummeted by more than 40%. While the world has witnessed
many financial crises in the past, the last one being the global recession of 2008, the
current coronavirus crisis is different from the past fallouts. In response to current
turmoil, RBI and the Government of India has come up with a slew of reforms such as
reductions of repo rate, regulatory relaxation by extending moratorium and several
Page | 31
measures to boost liquidity in the system howsoever the pandemic has impacted the
premise of the corporate sector. Payment’s deferrals, subdued loan growth, rising cases
of bad loans and sluggish business conditions have impaired the growth and the health
of the economic activity. Deceleration of GDP growth, demand-supply chain, cut in
discretionary expenses and CAPEX has been the observed during the lockdown, which
has led to falling in household incomes, marketing spends, reduced travel cost and hiring
freeze.
Companies with innovative products, increasing distribution reach, technology-driven
processes and healthy balance sheet would revive the growth momentum post
lockdown. Lower oil prices and high capital expenditure by the government in turn
creating capital which will provide a platform to flourish when we overcome COVID 19
pandemic.

Table 3.2 YEAR EFFECT OF BSE

Year Year effect

2000 5006

2001 3972

2002 3262

2003 3377

2004 5839

2005 6603

2006 7378

2007 13787

2008 20187

2009 9647

2010 17465

2011 20509

2012 15455

2013 19427

Page | 32
 2014 21171

2015 27499

2016 26118

2017 26626

2018 34057

2019 36054

2020 41306

2021 47,785

2022 58,310

2023 60,871
Source: www.bseindia.com

Fig :3.2

3.3 MARKET CAPITALISATION OF STOCK MARKETS (2000-2023)

Market capitalisation Market capitalization is one of the most effective ways of
evaluating the value of a company. The evaluation of a company’s value is done based on
a company’s stocks. Essentially, this is defined by the total market value of the
outstanding shares of a company. This simple fact also means that publicly owned
companies are the only ones which can be evaluated by this method of evaluation.

Page | 33
Fluctuating market conditions and stock prices also impact the evaluation of a company
when this method of evaluation is being used.
Large-cap: These are some of the most stable groups of companies in the market.
Consequently, investing in these companies is the least risky option.
Mid-cap: Companies which have had a certain growth and are somewhat stable; and
yet have immense potential of growth, come under this group of evaluation by market
capitalization.
Small-cap: Constituting companies which have the least market cap are the riskiest of
all stocks.

Table: 3.3 Top 10 Indian companies based on market cap

Company name Market capitalization (in

crore)

Reliance Industries Limited Rs.8,49,234

Tata Consultancy Services Limited Rs.7,91,772

HDFC Bank Limited Rs.6,22,521

ITC Limited Rs.3,73,950

Hindustan Unilever Limited Rs.3,72,708

Development Finance Corporation Rs.3,46,629

Infosys Limited Rs.3,16,410

State Bank of India Rs.2,81,705

Kotak Mahindra Bank Limited Rs.2,61,730

ICICI Bank Limited Rs.2,53,192

Source: www.businessinsider.in

Page | 34
India's stock market is now the seventh biggest, up three spots, in the world as total
market capitalisation increased to $2.7 trillion. The BSE Sensex crossed the 51,000, while
the NSE benchmark Nifty crossed the 15,000 level for the first time on February 2021.
The benchmark Nifty has gained 6.9% so far in 2021. India's stock market is now bigger
than Canada, Germany and Saudi Arabia. India's stock market is the second-best
performer among the top 15 countries in 2021 and soon it may overtake France to
become the sixth biggest in the world.
3.3.1. MARKET CAPITALISATION OF NSE (NIFTY)
NIFTY 50 is NSE's diversified index comprising stocks from top 50 Indian companies
across 14 sectors. It tracks the market performance of the largest cap companies &
hence, broadly reflects the Indian economy. The NIFTY 50 index is India’s premier
stock index.
Launched on April 1, 1996, it's computed using the free float market capitalization
method.

Page | 35
S.No Nifty 50 Sub-Sector Market Close 1Y
Stock List Cap Price Retur
n
1 ITC Ltd FMCG – 5,62,802.7 452.85 71.47
Tobacco 8
2 Indusind 1,00,746.3 1298.40 65.6
Bank Ltd Private Banks 2

3 Larsen & Constructio 334807.43 2382 61.84

Toubro Ltd n&
Engineering
4 Axis Bank Private 3,00,203.1 974.85 55.16
Ltd Bank 5
5 UltraTech Cement 2,37,630.5 8243.45 54.57
Cement Ltd 2
6 Four 2,09,789.5 583.25 52.40
Tata Motors Ltd Wheelers 4

7 Titan Precious 2,64,027.6 2974 51.60

Company Metals, 0
Ltd Jewellery &
Watches
8 Britannia FMCG – 1,21,793.8 5056.45 49.66
Industries Foods 5
Ltd
9 Mahindra Four 1,67,088.1 1396.45 42.10
and Wheelers 2
Mahindra
Ltd
10 JSW Steel FMCG – 773.15 40.48
Ltd Foods 1,85,892.65

11 NTPC Ltd Hospitals & 1,81,812.4 187.50 36.61

Diagnostic 9
Centres
12 Eicher Trucks & 97,478.16 3562.10 35.79
Motors Ltd Buses
13 Hospitals & 74,222.36 5162.05 35.43
Apollo Hospitals Diagnostic
Enterprise Ltd Centres

14 Nestle India 2,21,327.5 22955.5 35.29

Ltd FMCG – Foods 8 5

Page | 36
15 ICICI Bank Trucks & 6,47,471.7 925.55 34.93
Ltd Buses 2
16 Grasim Iron & Steel 1,16,130.2 1769.10 34.43
Industries 7
Ltd
17 Hindalco Consumer 428.95 33.42
Industries Finance 95,997.96
Ltd

18 Tata Steel 114.25 32.62

Ltd Iron & Steel 1,39,631.06

19 Bajaj Insurance 4,38,487.2 7,248.8 32.51

Finance Ltd 6 0
20 State Bank Telecom 5,06,382.4 567.40 30.53
of India Services 8
21 Bajaj Two 1,521.0 29.9
Finserv Ltd Wheelers 2,41,964.75 5

22 Bharti Airtel Public 4,80,944.8 831.20 29.69

Ltd Banks 0
23 Bajaj Auto Home 4,662.0 28.93
Ltd Financing 1,31,914.72

24 Metals – 1,40,048.0 227.25 28.5

Coal India Ltd Aluminium 0

25 Bharat Paints 80,539.18 372.45 25.81

Petroleum
Corporation
Ltd
26 Asian Paints Paints 3,18,210.2 24.73
Ltd 7 3,318.70

27 Housing Mining – 4,91,378.1 2,658.5 24.51

Developme Coal 1 5
nt Finance
Corporation
Ltd
28 Maruti Power 2,86,661.4 9,492.1 23.9
Suzuki India Transmissio 2 0
Ltd n&
Distribution

Page | 37
29 Sun Private 2,38,002.0 991.95 23.18
Pharmaceut Banks 3
ical
Industries
Ltd
30 Hindustan FMCG – 6,28,774.1 2,676.1 21.87
Unilever Ltd Household 2 0
Products
31 HCL Pharmaceut 3,16,393.8 21.73
Technologie icals 8 1,168.65
s Ltd

32 Four 21.58
HDFC Bank Ltd Wheelers 8,98,475.33 1,607.50

33 SBI Life IT Services 1,29,651.8 1,295.3 20.39

Insurance & 0 5
Company Consulting
Ltd
34 Tata Tea & 79,792.81 858.9 19.82
Consumer Coffee
Products
Ltd
35 Power Grid Insurance 1,73,514.3 248.75 19.45
Corporation 9
of India Ltd
36 Dr Reddy’s Oil & Gas – 81,444.91 4,901.2 18.05
Laboratories Exploration 0
Ltd &
Production
37 Oil and Pharmaceut 1,97,824.8 157.25 17
Natural Gas icals 9
Corporation
Ltd
38 HDFC Life Insurance 643.70 16.37
Insurance 1,38,340.12
Company
Ltd
39 Adani Two 2,75,287.4 16.1
Enterprises Wheelers 7 2,414.80
Ltd

40 Hero 55,969.65 2,800.7 14.2

MotoCorp IT Services & 0
Ltd Consulting

Page | 38
 41 Tech Commoditie 1,07,902.8 1,107.3 13.07
Mahindra s Trading 6 5
Ltd
42 Adani Ports Private 1,59,375.0 11.26
and Special Banks 5 737.8
Economic
Zone Ltd
43 Kotak Ports 1,844.0 9.81
Mahindra 3,66,850.83
Bank Ltd
44 Cipla Ltd Pharmaceut 81,622.50 9.21
icals 1,011.15

45 UPL Ltd IT Services 51,300.28 683.45 6.71

&
Consulting
46 Tata IT Services 11,81,032. 3,227.7 3.7
Consultancy & 01 0
Services Ltd Consulting
47 Divi’s Oil & Gas – 3,566.2 0.92
Laboratories Refining & 94,671.40 0
Ltd Marketing

48 Reliance Labs & Life 17,30,033. 2,557.1 0.55

Industries Sciences 99 0
Ltd Services
49 IT Services 5,39,349.5 1,303.4 -7.83
Infosys Ltd & 6 0
Consulting

50 Wipro Ltd 2,09,569.6 380.15 -8.32

IT Services & 9
Consulting

Source: www.nseindia.com

Benefits of investing in NIFTY50 Index Funds:

Diversification – It deploys the investment in multiple companies and sectors thereby

reducing risk compared to investing in a single or small set of companies. Over time Nifty
50 replaces the underperforming companies at a market level with performing one.
Wide market presence – Nifty 50 Index funds are quite popular in India and have a
substantial market presence.
Low cost - These funds have lower operating expenses as fund managers simply need
to replicate the index.
Inflation + returns - Index funds have consistently generated inflation beating returns
over the long term. Coupled with low costs it becomes excellent value for investors.

Page | 39
 3.3.2 MARKET CAPITALISATION OF BSE (SENSEX)
The sum of the market value of BSE-listed companies crossed Rs 200 trillion for the
first time, on February 2021. The Sensex, ended at 50,614.29, up 358.54 points. In
dollar terms, the market cap figure of BSE-listed firms is $2.75 trillion -- the seventh
highest globally. The country’s market cap-to-GDP ratio is now more than 100 per
cent. Its nominal GDP (revised estimate for FY21) at current prices is around Rs 195
trillion.
The combined market cap of BSE-listed companies had topped the Rs 100 trillion-
mark in
December 2014. Back then, the market cap-to-GDP ratio was at 80 per cent. In
September 2007, when the market cap crossed Rs 50 trillion, the ratio was similar to
the current level. The markets had come off more than 50 per cent in the following
year due to the global financial crisis. In less the one year, India’s market cap (based
on BSE-listed companies) has nearly doubled. At the peak of the coronavirus-
induced sell-off in March 2020, the market cap had plunged to Rs 102 trillion.
BSE MD and CEO, Ashishkumar Chauhan said, "It is heartening to note BSE continues to
remain the primary wealth creator of the nation. It is also good to note that no other
developing country at the stage of India’s development has a thriving capital market as
compared to India. BSE has also become the world's 9th largest exchange in terms of
listed companies market capitalization, as on date." The four recently listed companies
which include Antony Waste Handling, Indian Railway Financing Corporation, Indigo
Paints, and Home First Finance Company, added ₹52562.21 crore in total m-cap. The
table below is an important data on BSE 30 Companies Share prices, 52-week High and
Low, PE ratio etc.

COMPANY NO OF MARKET EARNI

INDUSTR MARKET WEIGHTAGE( EPS(Rs
SHARES CAP.**(Rs NGS
Y PRICE(Rs) %) )
(m) m) *(Rs m)
ASIAN 3,008,18
PAINTS 3,136.2 959.2 1.8 50,439 52.6
PAINTS 8
3,107,73 131,54
AXIS BANK BANKING 1,008.2 3,082.6 3.7 42.7
4 8
BAJAJ 4,339,66 131,13
FINANCE 7,021.9 618.0 2.5 212.2
FINANCE 6 8
BAJAJ 2,579,90 140,95
FINANCE 1,617.0 1,595.5 1.3 88.3
FINSERV 5 6
BHARTI TELECO 5,850,18
972.8 6,014.1 3.4 90,446 15.0
AIRTEL M 4

Page | 40
COMPANY NO OF MARKET EARNI
INDUSTR MARKET WEIGHTAGE( EPS(Rs
SHARES CAP.**(Rs NGS
Y PRICE(Rs) %) )
(m) m) *(Rs m)
HCL
SOFTWA 3,550,83 154,41
TECHNOLO 1,308.5 2,713.7 1.8 56.9
RE 1 0
GIES
11,627,9 550,85
HDFC BANK BANKING 1,532.1 7,589.8 14.9 72.6
06 1
5,909,10 103,00
HUL FMCG 2,515.0 2,349.6 2.9 43.8
5 0
6,513,03 407,00
ICICI BANK BANKING 929.2 7,009.7 8.4 58.1
9 2
INDUSIND 1,147,47
BANKING 1,475.7 777.6 1.2 83,334 107.2
BANK 0
SOFTWA 5,963,96 248,80
INFOSYS 1,437.0 4,150.4 6.5 59.9
RE 8 0
FOOD &
12,473. 5,460,66 204,31
ITC TOBACC 437.8 7.0 16.4
0 8 1
O
1,911,97
JSW STEEL STEEL 781.9 2,445.5 1.4 95,380 39.0
8
KOTAK
3,464,26 170,20
MAHINDRA BANKING 1,743.0 1,987.5 3.3 85.6
8 9
BANK
ENGINEE 4,197,86 144,84
L&T 3,054.0 1,374.5 5.4 105.4
RING 9 3
AUTOMO 1,930,82 110,51
M&M 1,552.7 1,243.5 2.0 88.9
BILES 7 5
MARUTI AUTOMO 3,177,30 111,47
10,518.1 302.1 1.8 369.0
SUZUKI BILES 9 5
FOOD &
2,326,88
NESTLE TOBACC 24,133.9 96.4 1.1 29,711 308.2
2
O
2,461,98 192,09
NTPC POWER 253.9 9,696.7 1.5 19.8
4 3
POWER 1,958,24 157,40
POWER 210.6 9,300.6 1.2 16.9
GRID 2 4
RELIANCE 16,200,0 770,38
ENERGY 2,394.3 6,766.1 10.4 113.9
IND. 95 0
5,000,46 691,32
SBI BANKING 560.3 8,924.6 2.7 77.5
0 0
PHARMA
SUN 2,870,56
CEUTICA 1,196.4 2,399.3 1.7 86,186 35.9
PHARMA 4
LS
TATA AUTOMO 2,238,26 152,17
673.7 3,322.6 1.5 45.8
MOTORS BILES 8 3

Page | 41
 COMPANY NO OF MARKET EARNI
INDUSTR MARKET WEIGHTAGE( EPS(Rs
SHARES CAP.**(Rs NGS
Y PRICE(Rs) %) )
(m) m) *(Rs m)
TATA 12,221. 1,538,68 -
STEEL 125.9 1.3 -5.7
STEEL 5 2 69,104
SOFTWA 12,651,5 448,19
TCS 3,457.6 3,659.1 4.5 122.5
RE 36 0
TECH SOFTWA 1,169,70
1,198.5 976.0 1.0 36,339 37.2
MAHINDRA RE 5
RETAILIN 3,017,23
TITAN 3,398.6 887.8 1.8 33,190 37.4
G 0
ULTRATEC 2,466,97
CEMENT 8,545.5 288.7 1.3 56,914 197.1
H CEMENT 2
SOFTWA 2,067,79 117,11
WIPRO 396.0 5,222.4 0.7 22.4
RE 4 5
5,63
129,709,3
0,56
29
9
Source: www.bseindia.com

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 Benefits of investing in SENSEX top 30 companies include:

• 1. Better returns – A historical back test on the top indices in India viz. the Nifty 50
and BSE Sensex, reveals that investing in the Sensex can return slightly higher returns
than the Nifty 50. Keep in mind to choose a Sensex based index fund with high
liquidity.
• 2. Diversification – Investing in an index fund automatically extends you the benefit
of portfolio diversification, thereby reducing portfolio risk.
• 3. Less expensive - Being a passively managed fund you are required to pay minimal
fees.
This essentially means lesser expenses to eat into your returns.

3.4 RISK AND RETURN OF INDIA STOCK MARKETS (2000-2023)

One of the major objectives of investment is to earn and maximize the return.
Return on investment may be because of income, capital appreciation or a positive
hedge against inflation. The expected return may differ from realized return. In
security analysis, we are primarily concerned with returns from the investor
perspective. Our main concern is to compute or estimate the returns for an investor
on a particular investment.
According to the dictionary, Risk means existence of volatility in the occurrence of an
expected incident. Higher the unpredictability greater is the risk. According to this
definition risk may or may not involve money. All investments involve risk of one
type or the other. Risk and return are of two sides of the investment coin. Risk is
associated with the possibility of not realizing return or realizing less return than
expected. The degree of risk varies on the basis of features of the assets, investment
instruments, the mode of investment, the issuer of the securities etc. Thus, risk of an
investment is the variance associated with its returns. The chance that an
investment's actual return will be different than expected. Risk includes the
possibility of losing some or all of the original investment. Different versions of risk
are usually measured by calculating the standard deviation of the historical returns
or average returns of a specific investment. A high standard deviation indicates a
high degree of risk. We can distinguish between expected return and realized return
from an investment. The expected return is uncertain future return that an investor
expects to get from his investment. The realized return, on contrary, is the certain
return that an investor makes the investment decision based on expected returns
from the investment. The actual return realized from an investment may not
correspond to expected return. This possibility of variation of the actual return from

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the expected return is termed as risk. Where realization corresponds to expectations
exactly, there would be no risk.
The empirical evidence against the CAPM by Fama and French (1992) has generated
a lot of debate in the west and has called for major re-examination of the CAPM
model. While many studies have been conducted on CAPM in the capital markets of
the western countries, there are few studies in the Indian context. Studies by Varma
(1988), Yalwar (1988), Srinivasan (1988) have generally supported the CAPM theory.
Sudies by Basu
(1977), Gupta and Sehgal (1993), Vaidyanathan (1995), Madhusudhan (1997), Sehgal
(1997), Ansari (2000), Rao (2004), Manjunatha and Mallikarjunappa (2006,2007)
have questioned the validity of CAPM in Indian markets. But Ansari (2000) has
opined that the studies of CAPM on the Indian markets are scanty and no robust
conclusions exist on this model.

3.4.1 RISK AND RETURN OF NSE

Nifty50 is a broader index compared to Sensex, consisting of 50 large companies
listed on National Stock Exchange of India (NSE). Over the years, Nifty50 has be-
come the most widely used benchmark for exchange traded products in Indian
equity market. Growth rate of India’s GDP is fairly captured in the growth story of
Nifty50. Over the years, India has been one of the fastest growing large economies
of the world which is also reflected in the rise of Nifty50 Index.
Nifty 50 returns and Nifty 50 total returns index
The dividends of the stocks in the Nifty 50 are assumed to be reinvested in the index
after

the close of the ex-date. Such an index is called the Total Returns index. The Nifty 50
has a TRI version also available and the same is used as a benchmark for several
mutual funds. The total returns index therefore has a higher return than the Nifty 50
when considered for any period of time.

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 Table 3.6

Annual returns of Nifty

Year Annual return

2000 -14.65%
2001 -16.18%
2002 3.25%
2003 71.90%
2004 10.68%
2005 36.34%
2006 39.83%
2007 54.77%
2008 -51.79%
2009 75.76%
2010 17.95%
2011 -24.62%
2012 27.70%
2013 6.76%
2014 31.39%
2015 -4.06%
2016 3.01%
2017 28.65%
2018 3.15%
2019 12.02%
2020 14.90%
2021 24.12%
2022 4.32%
2023 --

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 Fig: 3.3

Nifty has a CAGR of 11.1% in the last 20 years (since 1999) and 8.87% in the last 10
years (since 2009 – this is an aberration as it came on back of monster recovery from
the lows of March 2009 to Dec 2009 and thereby depressing the returns from Dec
2009 to Dec 2019 period). s at 1205 on February 27, 2002, just before a lacklustre
budget dashed investors’ hope. The annual low came in late October with Nifty at
920. With an average value of 1056 for Nifty and a standard deviation of 68 points,
this is a very narrow range. But the returns were a lot better than in calendar year
2001 (minus 20 per cent) and 2000 (minus 23 per cent). That’s too bad years,
followed by a marginal recovery. The market pulled above it
The annual high of Nifty was own 200 DMA in the last quarter and has stayed above
that benchmark. This is a reliable signal of a new bull market. The moving average
signal is reinforced by the breach of a falling minus 40-degree trend line that
connected successively lower tops between February and November. The recovery
has come on decent volumes, which suggests that it's based on rising demand and,
hence, sustainable.

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"Oil is a big question mark -- there will be volatility here but we don't know the
direction. The Iraq situation will affect global prices and the speed of divestment of
public sector units will affect domestic sentiments. If India's economy does show
strong overall recovery, there will be turnarounds in many other sectors".
Devangshu Datta, independent analyst.
Nifty has shed over 29 per cent since May 11, 2006. The mid-cap and small-cap
stocks continue to be the worst affected in this market. The CNX mid-cap index is
lighter by 35 per cent since May. The market saw the beginning of a bullish
formation, an Ascending Triangle, on the monthly chart at the beginning 2007. This
formation took seven years to complete. In 2014, the Nifty50 achieved a positive
breakout. This Ascending Triangle formation was between 3,818 on the lower side
and 6,350 on the higher side.
3.4.2 RISK AND RETURN OF BSE
The 2+ decades-long journey has been a volatile one. In the last 20 years, we have
had:

• 15 years with positive returns

• 5 years with negative returns

In 2002-2003, the annual index returns after that have been 3.5%, 72.9%, 13.1%,
42.3%, 46.7%, 47.1%. And this is not normal. This was unprecedented and chances
are high that such a sequence of high positive returns, might not get repeated again
for many years if not decades. So do not have such expectations of multi-year high
returns from stock markets. Infact, we should be ready to face ugly years like 2008-
2009 – when index itself fell by more than 50% and individual stocks crashed by 80-
90%. I have said countless times that one should invest more in market crashes or
when everyone else is giving your reasons to not invest. But that is easier said than
done. When a crisis like the one in 2008-2009 comes, it is not easy to combine your
cash with courage.
Intense selling today brought the BSE Sensex to its lowest closing of 2006. Weak
global markets and worries over inflation and higher interest rates continued to drag
stock prices down to sharply lower levels on the major Indian bourses.
During the financial crisis of 2007–2008, the stock markets in India fell on several
occasions in 2007 as well as 2008. In 2007, there were five sharp falls in the stock
markets. On 2 April 2007, The Sensex fell by 617 points to 12,455 though during the
course of the day, it fell further. As per the analysts at rediff, "The Sensex opened
with a huge negative gap of 260 points at 12,812 following the Reserve Bank of India
[Get Quote] decision to hike the cash reserve ratio and repo rate. Unabated selling,
mainly in auto and banking stocks, saw the index drift to lower levels as the day

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progressed. The index tumbled to a low of 12,426 before finally settling with a hefty
loss of 617 points (4.7%) at 12,455.
On 21 November 2007, trying to explain the fall, rediff recounted that "Mirroring
weakness in other Asian markets, the Sensex saw relentless selling." The index
tumbled to a new low of 18,515 - down 766 points from the previous day's close. It
finally ended with a loss of 678 points at 18,603. " On 21 Jan 2008, the BSE fell by
1408 points to 17,605 leading to one of the largest erosions in investor wealth. The
BSE stopped trading for a while at 2:30 pm due to a technical snag although its
circuit filter allows swings of up to 15% before stopping trading for an hour. Referred
to in the media as "Black Monday", the fall was blamed by analysts at HSBC mutual
fund and JP Morgan on a large variety of reasons including change in the global
investment climate, fears of United States' economy going into a recession, FIIs and
foreign hedge funds selling in order to reallocate their funds from risky emerging
markets to stable developed markets, a cut in US interest rates, global bourses
(often referred to as event related volatility), volatility in commodities markets, a
combination of global and local factors ("...other emerging markets were down
nearly 20% so India is playing catch-up..."), huge build-ups in derivatives positions
leading to margin calls and that many IPOs had sucked out liquidity from the primary
market into the secondary market. HSBC mutual funds analysts predicted further
falls in the stock market, and the analysts at JP Morgan were of the opinion that
market would fall a further 10-15%.
On the next day on 22 January 2008, the Sensex again fell by 875 points to 16,729.
Jan 22, 2008: The Sensex saw its biggest intra-day fall on Tuesday when it hit a low of
15,332, down 2,273 points. However, it recovered losses and closed at a loss of 875
points at 16,730. The Nifty closed at 4,899 at a loss of 310 points. Trading was
suspended for one hour at the Bombay Stock Exchange after the benchmark Sensex
crashed to a low of 15,576.30 within minutes of opening, crossing the circuit limit of
10 per cent.
On 24 August 2015, the BSE Sensex crashed by 1,624 points. Finally, the indices
closed at 25,741 points and the Nifty to 7,809 points. The reason given for this crash
was given as a ripple effect due to fears over a slowdown in China, as the Yuan had
been devalued two weeks ago leading to a fall in the currency rates of other
currencies and the rapid selling of stocks in China and India. The Shanghai stock
exchange too fell by 8.5%. A variety of other reasons too were given for this fall by
analysts including disappointing earnings in the first quarter for many Indian
companies, somber commentaries by their management leading to doubts regarding
their recovery and a below average monsoon for that year.

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 Table 3.7 Annual returns of Sensex

Year Annual return

2000 -20.6%
2001 -17.9%
2002 3.5%
2003 72.9%
2004 13.1%
2005 42.3%
2006 46.7%
2007 47.1%
2008 -52.4%
2009 81.0%
2010 17.4%
2011 -24.6%
2012 25.7%
2013 9.0%
2014 29.6%
2015 -5.0%
2016 1.9%
2017 27.9%
2018 5.9%
2019 14.38%
2020 15.75%
2021 22.0%
2022 4.4%
2023 8.4%
Source: www.bseindia.com

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 Fig : 3.4

The stock markets in India continued to fall in 2016. By 16 February 2016, the BSE
had seen a fall of 26% over the past eleven months, losing 1607 points in four
consecutive days of February. The reasons given for this included NPAs of Indian
banks, "global weaknesses" and "global factors". In the four months from November
2015 to February 2016, FIIs were reported to have sold equities worth Rs 17,318
crore as, in the opinion of analysts, concerns grew over growth in China and as crude
oil prices tumbled below $30 per barrel.
On 9 November 2016, crashed by 1689 points, believed by analysts to be due to the
crack down on black money by the Indian government, resulting in franctic selling.
The Sensex nosedived by 6% to 26,902 and the Nifty dropped by 541 points to 8002.
These were said to be due to the demonetization drive by the Modi government.
The Hindu was of the opinion that the weakening rupee and the US presidential
election too had some bearing on the behavior of investors. The S&P had also fallen
by 4.45%. Although not classified as a crash, the BSE and NSE fell sharply on 2 and 5
February 2018, sparked by the comments of the Finance minister's proposal in the
budget speech to introduce a 10% long term capital gains tax (LTCG) on equity
shares sold after 12 months. The BSE Sensex fell by 600 points in two days, and the
Nifty 50 fell by about 400 points to 10,676 on 5th. Earlier, the BSE Sensex had fallen
by 570 points to 35,328 on 2 February and the NSE Nifty by 190 points to a low of
10,826.
On 1 February 2020, as the FY 2020-21 Union budget was presented in the lower
house of the Indian parliament, Nifty fell by over 3% (373.95 points) while Sensex fell
by more than 2% (987.96 points). The fall was also weighed by the global breakdown
amid coronavirus pandemic centered in China. On 28 February 2020, Sensex lost
1448 points and Nifty fell by 432 points due to growing global tension caused by

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coronavirus, which W.H.O said has a pandemic potential. Both BSE and NSE fell for
the entire five days of the week ending with the worst weekly fall since 2009.On
March 4 and 6, markets fell by around 1000 points and several crores of wealth was
wiped out. On 6 March 2020, Yes Bank was taken over by RBI under its management
for reconstruction and will be merged with SBI. This was done to ensure smooth
functioning of the bank as it was struggling for couple of years to cope up with heavy
pressure due to cleaning of bad loans. On 9 March 2020, the Sensex fell by 1,941.67
points, while Nifty-50 broke down by 538 points. The fear of COVID-19 outbreak has
created havoc all over the globe and India is no exception. Further, the recent Yes
Bank crisis also made the markets fell. The markets ended in red with Sensex closing
on 35,634.95 and Nifty-50 on 10,451.45.
On 12 March 2020, the Sensex fell by 2919.26 points (-8.18%), the worst
continuation of the week in the history while Nifty-50 broke down by 868.25 points
(-8.30%) amid World Health Organization (WHO) declaring Coronavirus outbreak as
"pandemic”. Sensex ended to 33-month low of 32778.14. On 16 March 2020, Sensex
plunged by 2,713.41 points (around 8%), the second worst fall in its history. On the
other hand, Nifty ended below 9200–mark at 9,197.40 due to global economic
recession. However, the Sensex continued to fall straight for 4–continuous days till
19 March 2020, losing 5815 points during the period. On 23 March 2020, Sensex lost
3,934.72 points (13.15%) and Nifty plunges 1,135 points (12.98%) at 7610.25 as
coronavirus-led lockdowns across the world triggered fears of a recession. These are
now the lowest levels since 2016. It's witnessing the biggest weekly loss since
October 2008, as the increasing number of coronavirus cases in India as well as
globally.

3.5 ANALYSIS OF INVESTMENT PATTERN OF STOCK HOLDERS

3.5.1 Reason for investing in stock market

Table 3.8 Reason for investing in stock market

Source: survey data

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 Fig 3.5 Reason for investing in stock market

According to the above diagram, the major reason for trading in stock market is
mainly due to Higher returns( 80%). Another main reason behind stock market
trading is for safety( 16.7%). None of the respondent has selected liquidity as the
reason for stock market trading.

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3.5.2 source/medium of information on stock market

Table 3.9 source of information on stock market

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 Fig 3.6 source of information on stock market

The above diagram give us an idea about the source of information about the
source of information about the stock market investment. About 50%
respondents gave the credit to their financial advisors or brokers who
introduced them or gave them monthly information. 3% respondents got
their information from Newspaper and financial journals. The rest of the
respondents got their information from TV/Internet and from
friends/relatives.

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3.5.3 Time horizon preferred for trading
Table 3.10 Time horizon preferred for trading

Fig 3.7 Time horizon preferred for trading

The above figure shows that 63% of the respondents prefer to have a long term
trading as long term trading is considered as safer and it involves lower risk. Another
17% prefer small term trading. 13% prefer medium term trading. Only 7% of the
respondents prefer intraday trading and it involves huge risk.

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3.5.4 Year of experience in trading

Table 3.11 Year of experience in trading

Fig 3.8 Year of experience in trading

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From the above chart it is clear that 37% of the respondents have 1 to 3 years of
experience. 27% of respondents have 3 to 5 years of experience. 23% of the
respondents have less than 1 year of experience. And only 13% of the respondents
are having experience above 5 years in stock market trading.

3.5.5 Mode of trading

Table 3.12 Mode of trading

From the above table it is clear that 100% of the respondents are prefer online
trading. With the advancement of technology, most of the stock market are working
under online mode.

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 CHAPTER 4
FINDINGS AND SUGGESTIONS
Stock market is the physically existing institutionalised set up where instruments of
security stock market like shares, debentures, bonds, securities are traded. Stock
market makes a floor available to the buyers and sellers of stocks and liquidity
comes to the stocks. At this scenario the importance of investing in stock market is
getting higher. The number of investors and the number of stock market out of
which a majority are online markets , are increasing day to day. Currently investing in
stock market and having an intraday trading is considered as the best way to earn
money. Considering its importance the present study concentrate on ‘A Study on
Indian Stock Market: NSE and BSE’. The objectives of the study are to study about
the emerging stock markets in India such as
NSE and BSE, to study about the trend of year effect of the Indian stock market (BSE
and NSE) from 2000 to 2023, to examine the market capitalisation of Indian stock
market (NSE and BSE) from 2000 to 2023, to examine the trend of risk and return of
Indian stock market (NSE and BSE) from 2000 to 2023 and to study about the type of
trading preferred by the investors in stock market. In order to assess the objective
both primary data and secondary data were used. The primary data were collected
from 30 respondents from Thrichur district by using google form. The secondary data
was collected from various journals, articles, publications and online websites.
4.1 Findings of the study

• Due to covid-19 pandemic, Sensex lost 3,934.72 points (13.15%) to 25, 981.24
and Nifty lost 1,135 points (12.98%) to 7610.25.
• The biggest stock market crashes in India were caused mainly due to covid19
pandemic, 2008 financial crisis, Harshad Mehta scam.

• Nifty has less risk and higher liquidity than Sensex. Nifty suffer lower market
impact cost than Sensex.
• Covid-19, strong correlation with the trends and indices of the global market
as BSE Sensex and Nifty 50 fell by 38%. The total market cap lost a staggering
27.3% from the start of the year.

• Pre covid-19, market capitalisation on each major exchange in India was about
$2.6 trillion. The Sensex returned around 14% for the year 2019 prominently
featured blue chip companies such as HDTV bank, TCS, Infosys, Reliance, ICICI,
without which Sensex return would have been negative.
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• Despite a population of over 1.2 billon, there exist only 20 million active trading
accounts in India.

• The banking sector have maximum risk and return of 1.9 and 10 respectively
ICICI in automobile sector Eicher motor have maximum return of 35.9 Ashok
Leyland have maximum risk of 1.9 IT sectors have maximum return of 17.7 and
maximum risk of Oracle of 6.6 and in fast moving consumer goods sector,
Godrej have maximum return of 14.8 and highest risk in ITC of 0.5.
• The stock of bank of India, HDTV bank, Mahindra bank are less volatile in
nature. The stock of federal bank, Indus land bank, Canara bank, ICICI bank,
PNB, SEBI are moderately volatile in nature. The stock of yes bank and axis
Bank have high volatile in nature.
• Among all the investment avenues in the stock market banking is considered
as the most sensitive investment avenue the fine stocks of banking sectors
shows Arch effect which means period of high vitality is followed by similar high
volatility and low is followed by low volatility.
• The S&P 500 experienced it’s fastest ever bear market, clocking in at just 33
days before it’s third fastest recovery to a break-even level in about 5 months.

• 80% of the stockholders invest/trade in stock market for higher return rather
than safety and liquidity.
• 50% of the stockholders got information regarding stock market from financial
advisors or brokers.
• 63% of the stockholders prefer to have long term trading as it involves less risk.
Intraday trading has higher risk thus only 7% preferred intraday trading.

• All the stockholders prefer to have online mode of trading. As the advancement
of technology and the pandemic scenario have made stock market into an
online node of trading.

4.2 CONCLUSUON

Indian stock market now grown into a great material with a lot of qualitative
inputs and emphasis on investor protection and disclosure norms. The market

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 has become automated, transparent and self-driven. It has integrated with
global markets, with Indian companies seeking listing on foreign capital markets
exchange, off shore investments coming to India and foreign funds floating their
schemes and thus bringing expertise in to our markets. India has achieved the
distinction of possessing the largest population of investors next to the U.K.,
perhaps ours is the country to have the largest number of listed companies with
around several equity fund management avenues and National Fund managers
most of them automated. India now has world class regulatory system in place.
Thus, at the dawn of the new millennium, the equity funds market has increased
the wealth of Indian companies and investors. No doubt strong economic
recovery, upturn in demand, improved market structure, and other measures
have also been the contributory driving forces. Even though Covid pandemic has
fall in India stock market, it recovered with huge hikes along with the economic
recovery of the nation.

BIBLIOGRAPHY
BOOKS/JOUNALS

• Anju balan (2013), Indian stock market- review of literature, TRANS Asian
journal of marketing and management research

• Avijan Datta, gautham bandopadhyay, prediction of stock performance in the

Indian stock market using logistic regression, international journal of business
and information.
• Gangan deep sharma &B. S Bodla, Inter linkages among stock market of south
Asia, Asia Pacific journal of business administration

• Peter sellin, monetary policy and stock market: theory and empirical evidence
sveriges riskbank working paper series.
• Alok kumar Mishra, stock market and foreign exchange market in india: are
they related? South Asia economic journal
• Mara madalino & carlo pinho, time frequency effects on market indices: world
commovements paris, 2009 finance international meeting AFFI -EUROFIDAI
• Vivek rajput & sarika bobde, stock market predictions using hybrid approach,
international journal of computer science and mobile computing.
• Vanita tripathi & shruthi sethi, integration of Indian stock market with world
stock markets, Asian journal of business and accounting.
Page | 60
• Marcia oli sigao, effects of temperature on stock market indices: a study on
BSE & NSE in India, international journal of economic research.

4.4 WEBSITES:

• www.nseindia.com
• www.bseindia.com
• www.businessinsider.in

QUESTION SCHEDULE
1. Name
2. Address
3. Age
4. Gender
5. Occupation
6. Monthly income
7. Name of the stock
8. Why do you invest in stock market?
• Safety
• Liquidity
• High returns
• Other

9. How do you get information on stock market?

• TV/ Internet
• Newspaper/ Financial Journal
• Financial advisor/ Brokers
• Friend/ Relative

10. Name the type of trading

• Long term
• Medium term

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 • Short term
• Intraday

11. Year of experience in trading

• Less than 1 year
• 1 – 3 years
• 3 – 5 years
• Above 5 years

12. Mode of trading

• Offline
• Online

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