SYNOPSIS

1. Need For Research :-

1. Now a Day in capital market, an international stock Market’s effect on

Indian capital Markets is observed. Our stock market is fluctuating
because of certain movement an international stock Market. So, it is
necessary to study its impact on Indian markets.
2. Project indicates what is the impact of US, Japan, china, New York,
Hong Kong stock markets on Indian capital markets i.e. SENSEX and
NIFTY 50.
3. By knowing, investors can understand profit potential in stock market
after measuring the effect of Different stock Market. So it will helpful
for develop good portfolio for minimizing the risk and maximizing the
return.
4. If we get the results Indian markets and other international markets
are positively correlated and significant impact of our(indian) stock
markets so investor get brief idea about how much stock value
increase & decrease in specific time duration.

2. Problem Statement:-

 Presently, the fluctuations in the Indian stock markets are

attributes heavily to cross the border capital flow in the flow of
FDI, FII, and to reaction Indian capital market to the global
markets. In this context understanding the relationship and
influence of various exchanges on each other is very important.
Here, there are several factor that affect the price of stock markets
i.e. socio, political, geography, economic etc. nowadays all the
country focus on easier doing a business so they remove the
restriction of FDI and FII as par term and regulation system so

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 that will lead to increase the trade between to country. it can be
assumed reasonably that a particular ‘stock exchange will have
some impact of other exchange.’

3. Research Objectives:-
A. Primary Objective:-
A. To understand the stock exchange is it correlated with other
stock markets?

B. Secondary Objectives:-
A. To know the impact of international stock exchange(i.e. Japan,
US, China, Hong Kong, New York) indices on NIFTY 50 and
SENSEX.
B. To understand various stock markets prices volatility of
different country.

4. Variables under study:-

 Dow Jones
 Nasdaq
 Nifty 50
 Sensex
 FTSE 100
 Hang sengs
 Nikkie 225
 shanghai

5. Research Design:-
A. Type Of Research :-
 After establishing the what form; objectives of the study i.e. the
research problem, next step is how form of the study(Research
Design),which specifies the method of achieving the stated research

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 objectives in the possible manner. Thayer (1993) stated that A
traditional research design is a blueprint or detailed plan for how a
research study is to be completed. Research design ensures that the
study is relevant to the problem and will use economical procedures.
 Researcher has number of designs available to him for investigating
the research problem. The classification that is universally followed
and is simple to comprehend is the one based upon the objective or
the purpose of the study such as exploratory, descriptive and causal
research design.
 The second set of research designs is more structured and formal in
nature. These are termed as the descriptive designs. As the name
implies, the objective of these studies is to provide a comprehensive
and detailed explanation of the phenomena under study.
 Descriptions of phenomena or characteristics associated with a
subject population (who, what, when, where, and how).
 So that under study, the research design is completely Descriptive
research design because this problem has been already study by
some else in earlier for similar reason. So this study conducted for
‘Fact Finding Investigation’ its means to check the accuracy and
reliability of earlier conclusion made by some else.

B. Data Collection Method:-

 In report, data are completely taken secondary data for study.

Because primary data is not available or feasible. Hence, accurate
data cannot be gathering from asking anyone’s peoples in term of
these types of research.
 So the complete and accurate data can be available on recognizes
stock exchange.

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 c. Sample Design:-
I. Sampling Unit :-
 This study covered 8 global stock markets indices such as Bombay stock
exchange(i.e. Sensex), National Stock exchange(i.e. Nifty50), Japan Stock
Exchange(i.e. Nikkei 225), London Stock Exchange(i.e. FTSE100), Hong
Kong Stock Exchange(i.e. HangSeng), Shanghai Stock Exchange(i.e.
Shanghai) , Nasdaq Stock Exchange(i.e. Nasdaq and Dow Jones).

II. Sampling Period:-

 Whole period will be 4th December, 2019 to 4th February, 2000 for
training.
 Indices data will be collected in the date of 31st December, 2019 from
recognize websites and duration of that data will be 1st January,
2017 to 31st December, 2019. And also one additional month taken
that will be a 31st January 2000 for the purpose of finding a return
of 3 year.

III. Sampling Size:-

1. Closing price of SENSEX &NIFTY 50 (From 1/31/2017 To
12/31/2019 , Monthly bases)
2. Closing price of NASDAQ&DOW JONES (From 1/31/2017 To
12/31/2019 , Monthly bases)
3. Closing price of NIKKIE 225 (From 1/31/2017 To 12/31/2019 ,
Monthly bases)
4. Closing price of HANG SENG (From 1/31/2017 To 12/31/2019 ,
Monthly bases)
5. Closing price of FTSE 100 (From 1/31/2017 To 12/31/2019 ,
Monthly bases)
6. Closing price of SHANGHAI (From 1/31/2017 To 12/31/2019 ,
Monthly bases)

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 (NOTE: closing Price considering last day closing price at the end of
months.)
IV. Sampling Technique:-
 Sampling is a process of selecting an adequate number of elements
from the population so that the study of the samples will not only
help in understanding the characteristics of the population but will
also enables to generalize the results. Broadly, sampling methods
can be classified in two groups; 1) Probability and 2) Non-
probability sampling. For this study, Researcher will use non-
probability judgment sampling method .

6. Tool & Techniques For Data Analysis:-

 Regression analysis, Correlation analysis Beta analysis:

1. Beta:

 In finance, the beta (β) of a stock or portfolio is a number describing

the relation of its returns with that of the financial market as a
whole.

 An asset with a beta of 0 means that its price is not at all correlated
with the market. A positive beta means that the asset generally
follows the market. A negative beta shows that the asset inversely
follows the market; the asset generally decreases in value if the
market goes up and vice versa.

 Formula For Beta:-

𝐧 ∑𝐱𝐲 – (∑𝐱)(∑𝐲)
𝜷 =
𝐧 ∑𝐱² − (∑𝐱)²
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 Rules for beta:
 If beta is negative (B<0) which indicates inverse relationship
between stock and markets.
 If beta is zero (B=1) which indicates stock move with markets.
 If beta is positives (B is between 0 to 1) which indicates stock is
less volatiles than the markets.
 If beta is positives (B>1)which indicates that stock is more
volatiles than the markets.

2. Regression analysis:

 We can analyze how a single dependent variable is affected by the

values of one or more independent variables — for example, how
an athlete's performance is affected by such factors as age, height,
and weight. We can apportion shares in the performance measure
to each of these three factors, based on a set of performance data,
and then use the results to predict the performance of a new,
untested athlete.

(i) X= a+bY (i.e. X on Y relation)

𝐧 ∑𝐱𝐲 – (∑𝐱)(∑𝐲)
𝒂=
∑𝐲² – (∑𝐲)²

(ii) Y= a+bX (i.e. Y on X relation)

𝐧 ∑𝐱𝐲 –(∑𝐱)(∑𝐲)
𝒃=
∑𝐱²−(͞𝐱)²
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 3. Correlation:-

 This analysis tool and its formulas measure the relationship between
two data sets that are scaled to be independent of the unit of
measurement. The population correlation calculation returns the
covariance of two data sets divided by the product of their standard
deviations. We can use the Correlation tool to determine whether two
ranges of data move together — that is, whether large values of one
set are associated with large values of the other (positive correlation),
whether small values of one set are associated with large values of
the other (negative correlation), or whether values in both sets are
unrelated (correlation near zero).

 Formula for correlation:-

𝐧 ∑𝐱𝐲 – (∑𝐱)(∑𝐲)
𝐫=
√𝐧 ∑𝐱² − (∑𝐱)²  √𝐧 ∑𝐲² − (∑𝐲)²

 Formula for variance:-

[ 𝐧 ∑𝐱𝐲 – (∑𝐱) (∑𝐲) ]²

𝐫² =
[ 𝐧 ∑𝐱² − (∑𝐱)² ][ 𝐧 ∑𝐲² – (∑𝐲)²]

7. Limitation of Study:

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1. Impact of various stock markets major indices on our stock
market is covered by only six indices. It may not show the
complete effect on stock market.
2. Tools which are used for analysis are also based on certain
assumption & parameters. It has also its limitations.
3. Output of results may not be generalized because during a data
analysis we are kept the some factor as constants.
4. The Study is based only on secondary data.