Reasons for stock market fluctuations in india

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Sandip Chovatiya , Student at parul institute of management at iN uR hArT. Embeds 0 No embeds. No notes for slide. Analysis of stock market fluctuations 1. ADITYA KAPOOR AMIT GUPTA GROUP - 2 SECTION - A PGDM- 2. The report will tell the behavior of stock prices within a specific period of time and what factors influence the stock prices.

The weight age of each of these factors is industry specific. Sometimes we observe that whenever any monetary or fiscal decision or when any company declares its result like how much they earn profit in the particular financial year or when they announce any expansionary project, capital market got affected. So, we want to find out whether the fluctuations in stock markets are random or follow a cause and effect relationship with all these decisions. Hence, we have derived the hypothesis, and they are: That all the variables sales, profitability and economic indicators will affect the stock return, and stock fluctuations behavior can be determined by these variables.

Stock market behavior will be determined by the technical analysis. BENEFITS OF THE STUDY: Broadly we have classified the benefits research into various sub groups: An investor will be able to predict returns and take decisions according. Investor can earn higher returns.

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Student can learn about various research methods that are used to determine the stock market. We have followed the exploratory research approach and our research is typically based on the secondary data plus on a small focused group survey by targeting those persons who invests in the market frequently, hence we have taken a sample size of 20 persons. Through the survey we are to predict the investor behavior that how they invests in the market and what are the factors which they see In this research we are analyzing the stock market movement by doing fundamental research which includes the variables like beta value, profitability and sales of the company and economic indicators like GDP, inflation as well.

With all these variables we have tried to predict the dependency of the variables among each other. As exploratory research allows us to manipulate the discoveries due to less stringent methodological restrictions, hence we have used the data to do the research on our hypothesis that we have made. We are focusing on the research objective that if any normal investor invests in the market by analyzing all these factors then is s he will be able to earn a good amount on the stock market provided that all the factors that we have taken are dependent or not.

So if all the factors are dependent then we can infer that our objective is workable and if not then we have to simply shift towards the technical analysis observing the trend that how much shares are being purchased and sold or how much money is invested on daily basis of the market which is beyond our research scope because it requires very typical and heavy calculations on the daily basis.

A focus group questionnaire was filled by 20 respondents i. Following were the questions asked to them: How frequently do you invest in stock market in a year? What factors you observe while investing in a company stock? Sales or Quarterly Results ii. Company type Blue Chip or White chip v. Stock Specific News b. Technical Following results were obtained: STATE BANK OF INDIA: In order to solve or rectify rather this problem we clubbed all the variables.

To support this argument graph 1. Still the data have very small percentage of errors. So, it is hard to determine the stock market behaviour with these variables.

And other than that an investor can also go for the other factors for the stock fluctuations like price to earnings ratio or otherwise investor has to go for the technical analysis. MARUTI SUZUKI INDIA LIMITED: But if we analyse the significance F value; it shows the high percentage errors in the sales data and very low error in the profitability data but logically it should be the same because both sales and profitability are interrelated with each other.

So, it is not showing the clear picture. Considering the economic variable with stock return; the correlation is very strong and dependency between them is also very high and significance value of F test also RELATION BETWEEN ECONOMIC INDICATOR AND STOCK RETURN 2 1. RELATION BETWEEN ECONOMIC INDICATOR AND STOCK RETURN supports our argument as there is almost no error in the data set.

But after observing the graph it is clear that economic indicators like GDP and inflation that we had considered are not enough to substantiate the stock fluctuations refer graph 2. For that we have combined all the variables to find the clear picture.

So, our assumption in above point is 6 GROUP — 2 SECTION — A PGDM 7. So it is hard to depict the true behaviour of the stock with these two factors. For this to overcome we have to increase the data set range from five years to large number in order to clear the picture or we to choose other factor.

Relation between economic indicators and return is strong with moderate dependency and significance F value shows a little amount of noisy data which can be rectified if 7 GROUP — 2 SECTION — A PGDM 8.

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But after observing the graph 3. It might be the price to earnings ratio or beta value of the stock or something else. The measures taken by the govt. For this to determine we clubbed all the variables.

After clubbing we found the high dependency and strong correlation among all the variables but the data set is very noisy as there is a problem of multi co-linearity. From the graph 3.

And also there is possibility that stock is getting influenced by some other factors because in the range of five years of data; data set is very noisy so there might be a possibility that some other factors or indicators are affecting the stock.

So, investors have to closely observe all the factors in order to gain profit from this stock. Their demand varies only when govt. The same has been reflected by the data set that weak correlation and very low dependency of the sales and profitability with the stock return.

And the same has been supported by the significance F value which shows the huge amount of percentage errors in the data. On finding the relation between the economic indicators and return we find that relation is good and dependency is moderate which means that there is a relation between them which is affecting the stock fluctuation in the market but graph 4. It says that economic indicators alone are not affecting the stock there is a measure taken by the govt. The stock is behaving in the same way as the variables are behaving.

Hence for investors to invest in the capital goods firms they must see those factors which are affected directly by the measures taken by the govt. From the above research we can conclude that: This cannot be validated, so they are not considered. To remove errors this we can take longer range of data. So these all data cannot be validated.

Our study suggests following recommendations: An increase in these factors will also increase the stock returns. Analyzing the Bottom Line with Excel.

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Introduction to Business Performance Analysis. Summer training project report on fluctuation of indian stock market. A project report on overview of indian stock market.

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