Introduction : Stock Market In India The Indian security market has become one of the most dynamic and

efficient security markets in Asia today. The Indian market now conforms to International Standards in terms of operating efficiency. During the latter half of 19th century, shares of companies used to be floated in India occasionally. There were share brokers in Bombay who assisted in the floatation of shares of companies. A small group of stock brokers in Bombay joined together in 1875 to form an association called Native Share & Stockbrokers Association. The association drew up codes of conduct for brokerage business and mobilizes private funds for investment in the corporate sector. It was this association which later became the Bombay Stock Exchange, Mumbai or BSE Later on in 1894 the brokers of Ahmedabad formed the Ahmedabad Stock Exchange, the second stock exchange of the country. During the 1900s Kolkata became another major center of share trading and as a result Kolkata Stock Exchange was formed in 1908. Later on Chennai Stock Exchange was started in 1920. However, by 1923, it ceased to exist. Then the Madras Stock Exchange was started in 1937. Three more stock exchanges were established before independence, at Indore in 1930, at Hyderabad in 1943 and at Delhi in 1947. Thus along with the increase in number of stock exchanges, the number of listed companies and the capital of listed companies grown tremendously after 1985 which results into growth and development of stock market in India.

About NSE And NIFTY 50 The National Stock Exchange of India Limited (NSE) is a Mumbai-based stock exchange. It is the largest stock exchange in India in terms of daily turnover and number of trades, for both equities and derivative trading. Though a number of other exchanges exist, NSE and the Bombay Stock Exchange are the two most significant stock exchanges in India and between them are responsible for the vast majority of share transactions. The NSE's key index is the S&P CNX Nifty, known as the Nifty, an index of fifty major stocks weighted by market capitalization. The Nifty is a well diversified 50 stock index accounting for 22 sectors of the economy. It is used for a variety of purposes such as benchmarking fund portfolios, index based derivatives and index funds. Nifty is owned and managed by India Index Services and Products Ltd. The Nifty Index represents about 68.99% of the free float market capitalization of the stocks listed on NSE as on December 31, 2013. The total traded value for the last six months ending December 2013 of all index constituents is approximately 59.01% of the traded value of all

stocks on the NSE.Impact cost of the Nifty for a portfolio size of Rs.50 lakhs is 0.06% for the month December 2013. Nifty is professionally maintained and is ideal for derivatives trading. NSE is mutually-owned by a set of leading financial institutions, banks, insurance companies and other financial intermediaries in India but its ownership and management operate as separate entities. There are at least 2 foreign investors NYSE Euro next and Goldman Sachs who have taken a stake in the NSE. As of 2006, the NSE VSAT terminals, 2799 in total, cover more than 1500 cities across India. In October 2007, the equity market capitalization of the companies listed on the NSE was US$ 1.46 trillion, making it the second largest stock exchange in South Asia. NSE is the third largest Stock Exchange in the world in terms of the number of trades in equities. It is the second fastest growing stock exchange in the world with a recorded growth of 16.6%. It is used for a variety of purposes such as benchmarking fund portfolios, index based derivatives and index funds. There are seven major Indices in NSE and fifteen sector specific Indices. CNX BANK INDEX or BANK NIFTY is the index which has 17 banks listed on it and is a separate index to look upon price movements of banks share prices. A brief account of the same is given below. CNX Bank Index The Indian banking Industry has been undergoing major changes, reflecting a number of underlying developments. Advancement in communication and information technology has facilitated growth in internet-banking, ATM Network, Electronic transfer of funds and quick dissemination of information. Structural reforms in the banking sector have improved the health of the banking sector. The reforms recently introduced include the enactment of the Securitization Act to step up loan recoveries, establishment of asset reconstruction companies, initiatives on improving recoveries from Non-performing Assets (NPAs) and change in the basis of income recognition has raised transparency and efficiency in the banking system. Spurt in treasury income and improvement in loan recoveries has helped Indian Banks to record better profitability. In order to have a good benchmark of the Indian banking sector, India Index Service and Product Limited (IISL) has developed the CNX Bank Index. CNX Bank Index is an index comprised of the most liquid and large capitalized Indian Banking stocks. It provides investors and market intermediaries with a benchmark that captures the capital market performance of Indian Banks. The index will have 12 stocks from the banking sector which trade on the National Stock Exchange. The average total traded value for the last six months of CNX Bank Index stocks is approximately 95.85% of the traded value of the banking sector. CNX Bank Index stocks represent about 89.06% of the total market capitalization of the banking sector as on June 28, 2013. he total traded value for

the last six months ending June 2013 of all the Index constituents is approximately 15.55% of the traded value of all stocks on the NSE and 84.49% of the traded value of the stocks forming part of the Banking sector universe. w.a , mean, sd, variance , correlation

Analysis
Date Nifty index 17-FEB-14 18-FEB-14 19-FEB-14 20-FEB-14 21-FEB-14 24-FEB-14 25-FEB-14 26-FEB-14 28-FEB-14 03-MAR-14 6073.3 6127.1 6152.75 6091.45 6155.45 6186.1 6200.05 6238.8 6276.9 6221.45 Axis Bank Ltd. 1,115.25 1,165.40 1,166.15 1,157.85 1,193.35 1,238.20 1,236.75 1,239.25 1,267.05 1,255.50 Bank of Baroda 533.05 533.05 531.50 513.80 518.00 527.75 537.25 538.35 551.15 545.95 HDFC Bank Ltd. 650.40 660.40 670.05 662.75 662.75 671.00 671.10 677.40 669.60 666.20 ICICI Bank Ltd. 1,009.15 1,037.80 1,030.90 1,007.85 1,025.30 1,036.20 1,031.10 1,036.45 1,043.85 1,029.80 IndusInd Bank Ltd. 381.75 389.20 392.90 384.50 392.05 399.10 402.65 395.80 397.50 392.25 Kotak Mahindra Bank Ltd. 650.75 680.30 685.90 669.75 672.05 677.60 677.60 677.60 677.60 669.95 Punjab National Bank 532.45 543 540.65 5 3 1 .2 535 539.15 538 543.05 5 5 2 .2 5 3 9 .8 State Bank of India 1473.6 1500.95 1508.05 1480.6 1502.1 1510.5 1506 1520.4 1533.25 1518.35

7000 6000 5000 4000 3000 ICICI Bank Ltd. 2000 1000 0 IndusInd Bank Ltd. Kotak Mahindra Bank Ltd Punjab National Bank State Bank of India Nifty index Axis Bank Ltd. Bank of Baroda HDFC Bank Ltd.

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