ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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Retail Investment in India

Retail investment into the Indian equity markets through direct as well as indirect channels picked up meaningfully during the pandemic, and continued thereafter. This led to Indian equities staying afloat in 2022, the year when global equities suffered badly, thanks to the Russia–Ukraine war and the Fed tightening. Retail investor behaviour in India in and around the pandemic is examined through their activity (turnover) and net investments. These indicators are analysed using NSE’s proprietary data and juxtaposed with institutional activity. Retail risk-taking rises with market performance, shows high variability within the segment, and exhibits behavioural finance traits like exuberance and buyers’ remorse. Despite the recent correction in economic activity, retail investor participation remains well above pre-pandemic levels.

Words That Send Waves to the Indian Stock Market

The study draws attention to the Reserve Bank of India’s communication as a policy tool and its impact on market participants. It first aims to quantify the qualitative variable—communication by employing textual analysis methods. The investigation starts by extracting the tone of monetary policy statements and trace its transmission on market sentiment in the presence of various informational, macroeconomic, and financial controls. The work concludes that market participants draw inferences from the tone of the RBI’s monetary policy statement and update their information set about the present state and prospects. 


There are serious apprehensions that post initial public offering, the Life Insurance Corporation of India would have to change its very business model, whereby it will have to push for the sale of more non-participatory policies as 100% of profits from such policies will flow to the shareholders. Thet neglect of the rural business will hurt the interests of the lower-middle and poorer sections who look at LIC policies as an instrument of social security.


The Impact of COVID-19 on the Stock Market and Corporate Firms

This paper highlights the possible consequences of the pandemic on the stock markets. It notes that higher profitability in the past years, better growth opportunities in the stock market, and being a stand-alone firm have a favourable impact on stock price reactions to COVID-19 shocks and, hence, they make such firms more resilient.


Is There a Bubble in the Indian Stock Market?

The recent surge in stock prices in India sparked off a debate on a possible bubble in the Indian stock market. The attempt here is to detect and date stamp bubbles present, if any, in the Indian stock market using a recursive econometric technique. This technique can help identify bubbles as they emerge, not just after they have exploded. This study does not indicate any explosive price behaviour in the Indian stock market. Thereby, the presence of any bubbles during the study period is not detected. The sharp decline and the subsequent recovery of the stock prices during the past 15 months was most probably an overreaction to the pandemic.


Stock Market Response to Union Budget

This paper explores the interplay between the Union Budget and the stock market in the following areas: the extent to which the stock market response to the Budget is consistent with the behaviour that we might expect in an efficient market; the role of the Budget in the Indian economy, using the stock market as an information processing tool; and the extent to which empirical research can guide hedging and trading around the Budget date.

Spotlight on Stock Markets

Regarding laypersons not reading the judgments there are two points, one is as stated by you that news articles do publish paragraphs from judgments and another point is that even in case laypersons are not reading it, the language in judgement does affect the narrative on the issue to certain extent. Plus, the institutional narrative is also formed along these lines. By istitutional narrative, I do not just mean judiciary but also the legislature and executive. If there are judges on a commission which makes certain recommendations for amendments on certain laws(and these judges are caught up in that narrative then in such case the basis for the laws and policies are going to be affected by it.

Stock Market, Financial Euphoria and Collective Madness

Irrational Exuberance by Robert J Shiller; Princeton University Press, Princeton, New Jersey, 2000; £ 17.50 (hardback), pp xxi + 296.

Stock Market Development in India

This paper addresses an important question of what happened to the Indian stock market following financial liberalisation. Considering three stock market indicators, viz, size, liquidity and volatility, and applying two time series trend break techniques of Perron on monthly data of Bombay Stock Exchange, it has been found that the Indian stock market grew and became more liquid after liberalisation. However, in respect of volatility the market had not exhibited any significant changes.

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