a study on impact of foregin stock markets

7/30/2019 A Study on Impact of Foregin Stock Markets

1/20

A STUDY ON IMPACT OF FOREGIN STOCK

MARKETS ON INDIAN STOCK MARKETPRESENTED BY

Alex Praveen

ArjunBalamurugan

Gouthaman

Krishnan

Koodalingam

Sathish

Ranjith


2/20

A STUDY ON IMPACT OF FOREGIN STOCK

MARKETS ON INDIAN STOCK MARKET The Significance of this study is to capture the trends,

similarities and patterns in the activities and movements of the

Indian Stock Market in Comparison to its International

counterparts.

Main hypothesis is what impact would the result have on the

understanding that international diversification of investment

is desirable and profitable with regard to both risk and return?


3/20

The aim is to help investors (Current and Potential)

understand the impact of important happenings on the Indian

stock Exchange.

The study will focus on two things

1. To analyse the impact of other foreign market on indian

stock market2. To guide the investors of various investment

opportunities.


4/20

INDIAN STOCK MARKET


5/20

INDIAN STOCK MARKETBSE

In 1957, it became the first stock exchange to be recognized

by the Indian govt under the Securities Contract Regulation

Act 1956

Establised in1875

Asias first stock exchange and 10th largest stock exchange in

the world.

NSE Incorporated in Nov 1992

11th largest stock exchange in the world.


6/20

TOOLS OF ANALYSISStandard Deviation

Correlation

CoEfficient of Determination


7/20

IMPACT OF VARIOUS FOREIGN STOCK

MARKETS ON INDIAN MARKETBRAZIL STOCK EXCHANGE

Founded on August 23, 1890

BOVESPA

In 1972- implement an automated system for dissemination ofinformation online and in real-time through an ample network

of terminals.

Bovespa introduced in 1999 the Home Broker

Home Broker - Users to execute buy and sell orders online In 2000, Bovespa created three new listing segments the Novo

Mercado(New Market), Level 2 and Level 1.

BM&F

BM&F creating 3rd largest stock exchange in the world.


8/20


MARKETS ON INDIAN MARKETCOMPARISON OF INDIA VS

BRAZIL

During 2005-06minimum

correlation with positivecorrelation for return

Same period the percentage change

relation is also positive but it is

lesser than the return In 2009-10 MC with negative

correlation

Highest being 1.486 in 2005-2006

period with respect to return.


9/20


MARKETS ON INDIAN MARKETINDONESIA STOCK EXCHANGE

Opened in 1977 during World War I and II

On July 13, 1992 the exchange was privatized under the

ownership of Jakarta Exchange Inc. In September 2007, JSE and Surabaya Stock Exchange merged

and named Indonesian stock exchange

Two of the Primary stock markets indices are the JSX

Composite and the Jakarta Islamic Index(JII). There are approximately 30 corporate stocks listed on the JII


10/20



INDONESIA


correlation with positive correlation

for return Same period the percentage change

relation is also positive but it is

Greater than the return

In 2009-10 MC with Positivecorrelation for return


period with respect to return.


11/20


MARKETS ON INDIAN MARKETJAPAN STOCK EXCHANGE

The Tokyo Stock Exchange or TSE for short, is located in

Tokyo, Japan

third largest stock exchange in the world

2,292 listed companies with a combined market capitalization

of US$3.8 trillion as of Dec 2010

The London Stock Exchange and the TSE developing jointly

traded products and share technology


12/20


MARKETS ON INDIAN MARKETCOMPARISON OF INDIA VS JAPAN


correlation with positive correlation

for return

Same period the percentage change

relation is also positive but it is lesser

than the return

In 2009-10 MC with Negative

correlation for return


period with respect to Percentage

change in daily value.


13/20


MARKETS ON INDIAN MARKETCHINA STOCK EXCHANGE

There are the two stock exchanges operating independently in

china

1. Shanghai Stock Exchange (SSE)2. Shenzhen stock exchange

SSE is the worlds 5th large stock market

The first shares list appeared in June 1866

In 1920 and 1921, Shanghai securities & CommoditiesExchange and Shanghai Chinese Merchant Exchange

started operation

On November 26, 1990, Shanghai Stock Exchange was

reestablished.


14/20



CHINA

During 2005-06 minimum

correlation with Positive correlation

for return

Same Period the Percentage change

relation is also Positive but it is

greater than the return

During 2009-10 Minimum

correlation with Positive correlation

for return

Highest being 0.509in 2009-2010

period with respect to return .


15/20


MARKETS ON INDIAN MARKETLONDON STOCK EXCHANGE

Fourth largest stock exchange in the world

In December 2005, the London Stock Exchange rejected a 1.6

billion takeover offer from Macquarie Bank. The LSE received an unsolicited approach from NASDAQ

valuing the company at 2.4 billion. This too it rejected.


16/20


MARKETS ON INDIAN MARKETCOMPARISON INDIA VS

UK(LONDON)


correlation with Positive


Same Period the Percentage change

relation is also Positive but it is

lesser than the return




Highest being 1.187in 2007-2008

period with respect to return .


17/20


MARKETS ON INDIAN MARKETUS STOCK EXCHANGE

The NASDAQ(National Association of Securities DealersAutomated Quotations) Stock Market , is an American stockexchange.

It is the largest electronic screen based equity securities tradingmarket in the United states and secondlargest by marketcapitalization in the world

In 1992, it joined with London Stock Exchange to form thefirst international linkage of securities markets.

To Qualify for listing on the exchange, a company must beregistered with United States Securities and ExchangeCommission (SEC).


18/20


MARKETS ON INDIAN MARKETCOMPARISON INDIA VS US




Same Period the Percentage

change relation is also Positive

but it is Greater than the return




Highest being 0.494 in 2007-

2008 period with respect to

return .


19/20

CONCLUSION This Study validates the popular belief that the markets in

general and Indian market in particular is more integrated with

other global exchanges from 2005 Onwards.

Because we were insulated due to government policies and

was just making the transition

However in the later time periods , the influence of other stock

markets increased on our NSE, but at a very low, almost

significant level.

Due to our government policies and investors risk taking

approach.


20/20

Thank you

a study on impact of foregin stock markets

Documents