STOCK MARKET
AUTHOR NAME-VAIBHAV VIJAY BIRAJDAR
ROLL NUMBER – 08
Influence of FII Flows on Indian Stock Market
AJMERA, & CHAUHAN, (2022) Says that FII always focuses on developing country like India to get higher returns. FII can influence the Indian market because Indian business-man thinks about getting help from FII is easy besides DII. In 1992 Dr. Manmohan Singh was the finance minister of India, he introduced three economic reforms liberalisation, privatisation and globalisation, he also reduced some barriers to industrial development. SEBI also made some restriction on investment of FII, because in 1st lockdown FII sold most of the securities in march 2020 total amount 67.54bn. FII mostly invest on FUTURES & OPTIONS this is the main reason that they can speculate the Indian market.
ASSESSING VOLATILITY IN THE BANKING STOCKS IN INDIAN STOCK MARKET
DURING THE COVID-19 PANDEMIC
MALLIKARJUNARAO, K. (2021) says that Volatility is a welcome phenomenon in the stock markets because it gives you opportunities for higher returns. Bank are the play major role of the country development of the economy. Bank provides the financing in form of loan and equity investment. During pandemic bank gives the loan for business to sustain ,later corona virus cases increase also country lockdown also increased and then because of lockdown the whole business cycle has been stuck there is no consumers because of this no business cannot generated revenue and they are not able to repay the loan and this the direct impact of the banking sector. During covid times majorly impacted banking and NBFC sectors because of this problem they are not generating the revenue and it impact the scrips. EXAMPLE-RBL BANK stock price has majorly impacted during covid times and even 2023 the price of the stock is very low from before covid RBL bank still struggling get that lavel.
Linkages Between the Movement of Sectoral Indices and Macroeconomic Variables in Indian Stock Market
PANDEY, S. (2022)The study’s conclusions point to an important connection between the movement of sectoral indices and economic variables in the Indian stock market. The analysis finds that while the IT sector index has a positive correlation with crude oil prices and the exchange rate, the finance sector index is very sensitive to interest rates and FII inflows. While the consumer goods sector index has correlations with both inflation and FII inflows, the healthcare sector index shows a positive relationship with GDP and inflation. It finds out that the crude oil price and the energy sector index have an important positive link.
Dynamics of Volatility Spill over and Connectedness Among Sectors
of Indian Stock Market
AHMED, R. I (2023) says that There is evidence that shocks in one area can cause ripple effects in other sectors, leading to higher volatility and risk. Though various industries have different levels and directions of spill over effects, some are more closely linked than others .For risk management and portfolio diversification techniques the research of volatility spill over and sector connectivity is crucial since it can aid investors in understanding the interdependencies and vulnerabilities of various sectors within the Indian stock market .Overall, it is clear that the processes of volatility spill over and connectedness among sectors in the Indian stock market are complicated and varied, and continued research and analysis are necessary in order to effectively understand and manage.
Exploring the Herd Behavior of Investors :A Comparative Study of the India
and US Stock Markets
LODHA, S.; (2023) Says that Herd action is the tendency of investors to act in step to the crowd rather than alone and objectively selecting securities based on fundamental analysis and market trends. This could end up in irrational joy or panic, which could lead to market volatility and incompetence. The Indian and US stock markets seem to exhibit identical patterns of actions, based on a comparative study of herd conduct, however there are some deviations in the intensity and timing of herd behaviour. Herd behaviour is more likely to occur in both markets during times of high uncertainty and market stress. Investors and managers should be mindful of herd behaviour as it may significantly impact the effectiveness and security of the market. Herd conduct has many kinds of negative implications that can be managed.
Do COVID-19 Epidemic Explains the Dynamic Conditional Correlation between China’s Stock Market Index and International Stock Market Indices
DERBALI, A. et al. (2023). Says that The dynamic conditional correlation between China’s stock market index and global stock market indices has been altered by the COVID-19 outbreak. The disruption of worldwide supply chains, the drop in demand for goods and services, and the uncertainty surrounding the economic impact of the pandemic are just a few of the factors that have an impact.
Due to the pandemic’s impact on the global economy, Chinese export demand and company performance were impacted, which in turn had an effect on the performance of the China Stock Market Index. Additionally, as the pandemic extended globally, it had an impact on other countries’ stock markets and their connection to China’s stock market index. Thus, it can be said that the COVID-19 outbreak has caused.
Have the Hedge Ratio and Hedge Effectiveness of Indian Stock Market Indices Changed After Covid-19 Pandemic?
SIREESHA, P. B.(2023) says that according to the proof that is at present accessible, it shows that the Covid-19 epidemic has had an effect on the hedge ratio and hedge effectiveness in Indian stock market indices. It is now difficult to effectively hedge due to changes in the linkages between stock prices and other hedging instruments as a result of the market’s increased volatility and unpredictability during the pandemic. However, depending on the precise index, time frame, and hedging method employed, the exact quantity and direction of these shifts may alter. In the end, it is advised that investors closely monitor market conditions and adjust their hedging plans as necessary to optimise the effectiveness of their risk management.
COVID-19, public attention and the stock market
XU, L. et al.( 2023) says that Public awareness and the stock market were both significantly affected by the COVID-19 epidemic. Once the pandemic initially began, the virus dominated the news, and the public’s emphasis was on the health problem as well as potential consequences for the economy. As a result, there was a lot of volatility and uncertainty on the stock market. Certain sectors, such travel and hospitality, had sharp falls while others, like technology and e-commerce, observed rises. Public focus increasingly shifted to the recovery and the potential for a return to pre-pandemic levels of economic activity as vaccines became available and nations started to reopen. As a result, the stock market eventually stabilised, with numerous sectors going back and some even surpassing pre-pandemic levels.
Short-Selling Equity Exchange Traded Funds and Its Effect on Stock Market Liquidity
KARMAZIENE, E. (2023) says that In conclusion, cutting stocks exchange-traded funds (ETFs) may significantly impact the liquidity of the share market. Shorting ETFs by investors increases the demand for borrowing securities, which can increase borrowing costs and reduce liquidity in the underlying assets. Additionally, short-selling has an opportunity to push the price of ETFs down, which might then impact the underlying assets. But short-selling can also be a helpful tool for market efficiency and price discovery. Overall, short-selling ETFs have complex consequences on stock market liquidity that are influenced by an assortment of factors, including market conditions, investor sentiment, and regulatory laws.
Dynamics of Return Linkages and Asymmetric Volatility Spill overs among Asian Emerging Stock Markets.
AHMED, R. I(2023) says that the academic literature has thoroughly investigated the dynamics of return linkages and asymmetric spill overs of volatility among Asian rising stock markets. Based on empirical evidence, return linkages among markets in the same region are stronger than among markets outside of it, and volatility spill overs are asymmetric, with negative shocks having more of an effect on market volatility than positive shocks. Furthermore, as a result of factors like the liberalisation of capital movements and the integration of the financial markets, the degree of connection among these markets has grown over time. Investors have to take into account these spill overs when deciding where to place their cash in the area. In general, regulators and investors need simultaneously understand the workings of return linkages and asymmetric volatility spill overs because it can.
Conclusion
The stock market experienced a significant drop in the early stages of the pandemic as investors panicked and sold off stocks. However, the market has since recovered, with many stocks reaching record highs. The pandemic has caused significant disruptions in some sectors, such as travel and hospitality, while others, such as technology and e-commerce, have thrived. Foreign institutional investors play a significant role in the Indian stock market. In the early stages of the pandemic, many FIIs pulled out their investments, causing a significant drop in the market. However, as the Indian economy has shown signs of recovery, many FIIs have returned, driving up stock prices. The pandemic has had a significant impact on politics worldwide, with many governments facing criticism for their handling of the crisis. In India, the pandemic has led to increased tensions between the ruling party and opposition, with many criticizing the government’s response to the crisis
REFERNCE
AJMERA, B. C.; CHAUHAN, F. R.(2022) Influence of FII Flows on Indian Stock Market: An Empirical Study. IUP Journal of Applied Finance, [s. l.], v. 28, n. 2, p. 47–58, 2022. Disponível em: https://discovery.ebsco.com/linkprocessor/plink?id=dd1a9331-9b7d-36dd-bc6b-6fbbda2a6b0c. Acesso em: 8 maio. 2023.
MALLIKARJUNARAO, K. (2021)Assessing Volatility in the Banking Stocks in Indian Stock Market during the Covid-19 Pandemic: Using Arch/Garch Models. Annamalai International Journal of Business Studies & Research, [s. l.], v. 13, n. 1, p. 59–68, 2021. DOI 10.51705/AIJBSR.2021.v13i01.008. Disponível em: https://discovery.ebsco.com/linkprocessor/plink?id=951b832b-356c-349d-825f-db5bce48b3b4. Acesso em: 10 maio. 2023.
PANDEY, S. (2022)Linkages Between the Movement of Sectoral Indices and Macroeconomic Variables in Indian Stock Market: An Empirical Study. IUP Journal of Applied Finance, [s. l.], v. 28, n. 1, p. 15–25, 2022. Disponível em: https://discovery.ebsco.com/linkprocessor/plink?id=5629fb56-bebb-3d4f-89ed-8a899636ae09. Acesso em: 11 maio. 2023.
AHMED, R. I (2023). Dynamics of Return Linkages and Asymmetric Volatility Spillovers among Asian Emerging Stock Markets. Chinese Economy, [s. l.], v. 55, n. 2, p. 156–167, 2022. DOI 10.1080/10971475.2021.1930292. Disponível em: https://discovery.ebsco.com/linkprocessor/plink?id=bd36d88c-42db-3726-9897-a804f29fdbec. Acesso em: 13 maio. 2023.
LODHA, S.; (2023) Exploring the Herd Behavior of Investors: A Comparative Study of the Indian and US Stock Markets. IUP Journal of Applied Finance, [s. l.], v. 26, n. 4, p. 49–60, 2020. Disponível em: https://discovery.ebsco.com/linkprocessor/plink?id=88be5ceb-03ce-345c-bb9f-cad973f90b53. Acesso em: 13 maio. 2023.
DERBALI, A. et al. (2023). Do COVID-19 Epidemic Explains the Dynamic Conditional Correlation between China’s Stock Market Index and International Stock Market Indices? Chinese Economy, [s. l.], v. 55, n. 3, p. 227–242, 2022. DOI 10.1080/10971475.2021.1958453. Disponível em: https://discovery.ebsco.com/linkprocessor/plink?id=49b2728a-468e-3c31-af6f-61bbc3586175. Acesso em: 13 maio. 2023.
SIREESHA, P. B.(2023). Have the Hedge Ratio and Hedge Effectiveness of Indian Stock Market Indices Changed After Covid-19 Pandemic? IUP Journal of Accounting Research & Audit Practices, [s. l.], v. 21, n. 3, p. 61–76, 2022. Disponível em: https://discovery.ebsco.com/linkprocessor/plink?id=2e8aad52-858a-34e6-ac41-28f310c3593c. Acesso em: 13 maio. 2023
XU, L. et al.( 2023) COVID‐19, public attention and the stock market. Accounting & Finance, [s. l.], v. 61, n. 3, p. 4741–4756, 2021. DOI 10.1111/acfi.12734. Disponível em: https://discovery.ebsco.com/linkprocessor/plink?id=cf65e77e-dcf7-388f-9745-f591b8f55917. Acesso em: 13 maio. 2023.
KARMAZIENE, E. (2023). Short-Selling Equity Exchange Traded Funds and Its Effect on Stock Market Liquidity. Journal of Financial & Quantitative Analysis, [s. l.], v. 57, n. 3, p. 923–956, 2022. DOI 10.1017/S0022109021000181. Disponível em: https://discovery.ebsco.com/linkprocessor/plink?id=3ed9d521-b007-35e5-a9d7-af0955228c2c. Acesso em: 13 maio. 2023.
AHMED, R. I(2023); HABIBA, U. Dynamics of Return Linkages and Asymmetric Volatility Spillovers among Asian Emerging Stock Markets. Chinese Economy, [s. l.], v. 55, n. 2, p. 156–167, 2022. DOI 10.1080/10971475.2021.1930292. Disponível em: https://discovery.ebsco.com/linkprocessor/plink?id=bd36d88c-42db-3726-9897-a804f29fdbec. Acesso em: 13 maio. 2023.