project report of iapm

8/9/2019 PROJECT REPORT OF IAPM

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PRESENTED BY: Ankita goyalHitesh Nandawana

Pooja Singh



Introduction

Although stock market returns have been the subject of major empirical

investigations in the industrized countries , almost all these models have considered

the stock market variables to establish the relationship between the equity market

returns and various factors. Even though market participants, investors and

researcher are aware of the fact that a host of factors in agriculture, industry and

economy influence the equity returns, there is not much of work which has been done

in this topic.

An efficient capital market is one in which security prices adjust rapidly to

the arrival of new information and, therefore, the current prices of securities

reflect all information about the security. Moreover , economic theory suggests that

stock prices should reflect expectations about future corporate performance, and

corporate profits generally reflect the level of economic activities.

If stock prices accurately reflect the underlying fundamentals, then the stock prices

should be employed as leading indicators of future economic activities, and not the

other way around.

Therefore, the causal relations and dynamic interactions among macroeconomic

variables and stock prices are important in the formulation of the nation·s

macroeconomic policy. As for the effect of macroeconomic variables such as money

supply and interest rate on stock prices. Competition among the profit-maximizing

investors in an efficient market will ensure that all the relevant information

currently known about changes in macroeconomic variables are fully reflected in

current stock prices, so that investors will not be able to earn abnormal profit through

prediction of the future stock market movements.



Objective of study

This study objective is find out how capital market is affected by

changes in different macro economic variable like inflation, GDP,

interest rate etc.It basically helps in determining the extent to which

returns of investors (who has invested in stock exchange ) has been

affected.

It also explain the recommendation to control the impact or to play

safely for investors.



Hypothesis and limitation



Methodology

Research methodology is a way to systematically solve the research

problems. It may be understood as a science of studying how research

is done scientifically. We study the various steps that are generally

adopted by a researcher in studying his research problem along with

the logic behind them. It is necessary for the researcher to know not

only need to know how to develop certain indices or tests, how to

calculate the mean, the mode, the median, standard deviation and

chi ² square, how to apply the particular research techniques, are

relevant and which are not and what would they mean and indicate

and why?

Researchers also need to understand the assumptions underlying

various techniques and they need to know the criteria by which they

can decide that certain techniques and procedures will be applicable to

certain problems and others will not.

Secondary Data Collection Methods

All methods of data collection can supply quantitative data (numbers,

statistics or financial) or qualitative data (usually words or text).

Quantitative data may often be presented in tabular or graphical form.

Secondary data is data that has already been collected by someone else

for a different purpose to yours.



Data anaylsis

YearsForeign direct

investment(us$million) SensexBse

turnover(us$million)

Nseturnover

(us$million)Inflation GDP

Percapita

income

2000 3272 5250 378865 865445 3.2 3.2 14667

2001 4741 3500 406788 906545 3.6 3.5 15890

2002 5036 3250 450789 967655 3.4 3.8 19040

2003 4322 4500 502618 1099535 5.4 8.5 20989

2004 5987 5400 518716 1140071 6.4 7.5 23241

2005 8901 7750 816074 1569556 4.4 9 27183

2006 21991 11400 956185 1945285 5.4 9.2 31080

2007 27288 16400 1578856 3551038 4.4 8 35430

2008 20700 14450 1100074 2752023 4.5 8.3 40141

C orrelation between sensex and foreign direct investment- r=0.96

C orrelation between bse turnover and FDI- r=0.95

C orrelation between nse turnover and FDI- r=0.94

C orrelation between sensex and inflation- r=0.65

C orrelation between sensex and GDP (gross domestic product)- r=0.48

C orrelation between bse turnover and inflation- r=0.78

C orrelation between bse turnover and GDP- r=0.41

C orrelation between nse turnover and inlation- r=0.6

C orrelation between nse turnover and GDP- r=0.69

C orrelation between sensex and per capita income- r=.93

C orrelation between bse turnover and per capita income- r=0.75

C orrelation between nse turnover and per capita income- r=0.91



Findings & conclusion

Above C orrelation figure shows that FDI is highly correlated with sensex, with bseturnover and with nse turnover.

It can be interpreted that if fdi move up then sensex, bse turnover and nse turnover too move up and vise versa.



Source

1. www.rbi.org.in/

2. www.nse-india.com

3. www.bseindia.com/

4. www.sebi.gov.in/

5. www.indiainfoline.com/

6. www.mospi.gov.in/

7. www.google.com

project report of iapm

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