Relationship of Axis Bank Ltd with Nifty
AUTHOR – AARTI PAL
Introduction:
Axis Bank Limited, formerly known as UTI Bank, is an Indian banking and financial services company headquartered in Mumbai, Maharashtra. It sells financial services to large and mid-size companies, SMEs and retail businesses.
Objective: Calculation of Beta of Axis Bank and its significance.
Literature review:
The study found that there is a significant positive impact of Axis Bank’s stock price movements on the Nifty50 index. The authors attributed this impact to the fact that Axis Bank is one of the largest banks in India and its stock price movements have a significant impact on the overall market sentiment. The authors also noted that the impact of Axis Bank’s stock price movements on the Nifty50 index is more significant during periods of high market volatility. This suggests that investors are more sensitive to the movements of large-cap stocks like Axis Bank during periods of market uncertainty. (Anand & Sivakumar, 2020)
The study reveals that the quarterly financial results of Axis Bank significantly impact the Nifty Bank Index. The results of this study can help investors and traders to make informed decisions while trading in the stock market. Furthermore, the study also suggests that the price movements of the stocks of other private sector banks are also influenced by the quarterly financial results of Axis Bank. This implies that Axis Bank is a major player in the banking industry and its performance has a domino effect on the stock prices of other banks in the sector. Therefore, the study recommends that investors and traders should keep a close watch on the quarterly financial results of Axis Bank and use this information to make investment decisions (Patil & Inamdar, 2019)
Data Collection:
The data was collected from the NSE (National Stock Exchange) website for the financial year 2022-2023, and only Friday closing prices were considered for the analysis. The weekly returns were taken as X, and the closing price was taken as Y. and hence the study is analyzing the relationship between weekly returns and closing prices of some asset(s) during the specified time period.
Data Analysis:
Axis Returns = 0.3 + 1.19 Nifty Returns
(5.70)
N= 51, R2= 0.39, F= 32.5, Significance = 6.72
T stat = 5.70
The above equation shows the relationship between Y and X. Positive sign means there is direct relationship, which means if X rises and Y rises and Vise-Versa. In this equation b = 1.19. Figure in bracket is T-stat for b it is more than the table value. R2 = 39% of Y is explained by X. F = 32.5. The beta is 1.19 which means it is more than 1.
Conclusion: Since Beta is more than 1 it is good for short-term investment.
References:
Anand, A., & Sivakumar, R. (2020). Stock price movement analysis of Axis Bank and its impact on Nifty50 index. International Journal of Management, Technology, and Social Sciences, 5(2), 13-22.
Patil, S., & Inamdar, S. (2019). Impact of Axis Bank’s Quarterly Results on the Nifty Bank Index. International Journal of Recent Technology and Engineering, 8(2), 4722-4726.