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Presented byBhavesh Jethi

8NBAM013

A STUDY ON VOLATILITY ININDIAN STOCK MARKET

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OBJECTIVES

To study volatility in Indian stock market while takingSENSEX of BSE as a source of secondary data which

broadly represent Indian stock market along with NIFTYof NSE.

To study the factors which are making Indian stock marketvolatile.

To furnish institutional material relevant for understandingthe environment in which stock market fluctuation areoccurring.

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INTRODUCTION

Stock exchanges to some extent play an important role asindicators, reflecting the performance of the country'seconomic state of health.

Stock market is a place where securities are bought and sold.

It is exposed to a high degree of volatility; prices fluctuatewithin minutes and are determined by the demand andsupply of stocks at a given time.

Stockbrokers are the ones who buy and sell securities on behalf of individuals and institutions for somecommission.

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With the liberalization of the Indian economy, it was foundinevitable to lift the Indian,

There are two kinds of players in NSE:(a) Trading members and

(b) Participants.Recognized members of NSE, who trade on behalf of

themselves and their clients.Participants include trading members and large players like

banks who take direct settlement responsibility.

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BOMBAY STOCK EXCHANGE

For the premier Stock Exchange that pioneered the stock brokingactivity in India, 128 years of experience seems to be a proudmilestone.

A lot has changed since1875 when 318 persons became membersof what today is called "The Stock Exchange, Mumbai" by

paying a princely amount of Re1. Since then, the country'scapital markets have passed through both good and bad periods.

The journey in the 20th century has not been an easy one. Till thedecade of eighties, there was no scale to measure the ups anddowns in the Indian stock market.

The Stock Exchange, Mumbai (BSE) in 1986 came out with astock index that subsequently became the barometer of theIndian stock market.

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I have taken data of Sensex and Nifty for the period of 6 monthsfrom 1 st march, 2009 to 31 st August 2009 after taking intoconsideration data of stock market.

STOCK MARKET ANALYSIS

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SENSEX & NIFTY IN MAY

In this charts we can see that the sensex & nifty both are very volatileduring this period.we shows the 5 weeks high sensex is about 14930.54& low is about 11343.59. on the other side 5 weeks high nifty is about4509.40 & low is about 3167.67. we see that the sensex is decrease 25%& Nifty is about 39 %.

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SENSEX & NIFTY IN JUNE

In this charts we can see that the sensex & nifty both are very volatileduring this period.we shows the 5 weeks high sensex is about 15600.3 &low is about 14016.95. on the other side 5 weeks high nifty is about4693.2 & low is about 4143.25. we see that the sensex is decrease 11 %& Nifty is about 12 %.

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SENSEX & NIFTY IN JULY

In this charts we can see that the sensex & nifty both are very volatile

during this period.we shows the 5 weeks high sensex is about 15732.31& low is about 14355.52. on the other side 5 weeks high nifty is about4599.9 & low is about 3918.75. we see that the sensex is decrease 9 %& Nifty is about 15 %.

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SENSEX & NIFTY IN AUGUST

In this charts we can see that the sensex & nifty both are very volatileduring this period.we shows the 5 weeks high sensex is about 16002.46& low is about 14634.45. on the other side 5 weeks high nifty is about4743.75 & low is about 4353.45. we see that the sensex is decrease 7 %& Nifty is about 9 %.

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US economic growthCrude oil pricesEmerging market valuationsForeign direct investment (FDI)Capital spending

Cont.

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NIFTY FROM MARCH TO AUGUST

In this chart we can see that the Nifty is very volatile during from march2009 to august 2009. We see 29 weeks high is about 4743.75 & 29 weekslow is about 2539.45. so we can say that market is about 95 % volatileduring this period.

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CONCLUSION

At the end it is concluded that following are Major factors, which havegenerally contributed to fall & rise in SENSEX & NIFTY: US economic growthCrude oil pricesEmerging market valuationsForeign direct investment (FDI)Capital spendingEquity supplyGovernment policy toward foreign firmsPolitics newsDomestic risk Foreign institutional investors (FII) withdrawalsUS Fed interest ratesIndian industry growthBudget 2009-10 and finance bill

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HANK YUOU