STUDENT PROJECT

ON

“A Case Study of Indian Stock Market

with References to the Nifty Index ”

Project Plan Proposal

By
Kirthika Soni
BBA (IIIrd sem.)
Department of Management

Under the supervision of

Dr. Mani Bhatia
(Associate Professor )
Department of Accounting and Taxation

IIS (Deemed to be University)

JAIPUR
 Introduction
Stock market is a place where people buy/sell shares of publicly listed companies. It offers a
platform to facilitate seamless exchange of shares. The buying and selling of shares take
place through electronic medium. Stock market is of the most vital component of a free
market economy, as it provides companies with access to capital in exchange for giving
investors a slice of ownership. A stock market is one of the important sources for companies
to raise money. This allows businesses to publicly trade, or raise additional capital for
expansion by selling shares of ownership of the company in a public market

 Types of Stock Market

• Primary Market
Primary market is a marketplace where companies raise capital for the very first time.
The process of issuing shares to the general public for the first time is known as an
Initial Public Offering, or IPO.
• Secondary Market
Once the shares are issued in the primary market, they are traded i.e., bought and sold
in the secondary market via a stock exchange.
Stock exchanges are further divided as:
 National stock exchanges
 Bombay stock exchanges.
• The Bombay Stock Exchange and National Stock Exchange are the only two national
stock exchanges in India, with the BSE being the oldest stock exchange in Asia. The
BSE is also the 10th largest stock exchange in the world with a market capitalization
of 2.1 trillion Dollars.

NIFTY INDEX
In the Indian stock market, the NIFTY 50 is a benchmark index that measures the weighted
average of 50 of India's top publicly traded firms. BSE SENSEX and the NSE Nifty are two
of the most widely utilised stock indexes in India.
For the Nifty 50, NSE Indices (formerly known as India Index Services and Products
Limited) is the only owner and manager of the index. Until 2013, NSE Indexes and Standard
& Poor's had a marketing and licence arrangement for co-branding equity indices.
Incorporated on April 22, 1996, the Nifty 50 is one of several stock indexes offered by Nifty.
An ecosystem of exchange-traded funds (onshore and offshore), NSE options, and SGX
futures and options make up the NIFTY 50 index, India's biggest single financial instrument.
The NIFTY 50 is the most frequently traded contract in the world. ' According to polls from
the WFE, IOM, and FIA, the NSE is the market leader.

As Chari points out, firms are better prepared to function in a lockdown because they have
learnt how to do so, lowered costs, streamlined operations, and, in many cases, received
funding. According to Abhishek Gupta, Bloomberg's India Economist, Indian authorities are
pursuing a gradual, state-level plan to contain the virus rather than a blanket nationwide
closure to lessen its impact.
As a result of this, the rupee has regained most of its losses from the previous month, owing
to optimism that the Asian economy would not be as severely affected as it was in 2008.
Rates on benchmark Indian government bonds have declined by around 11 basis points since
the Reserve Bank of India implemented its form of quantitative easing in April.
However, despite this week's blip, Indian equities are still going in the same favorable
direction as their worldwide counterparts. There has been a rise in long-term correlation from
70% to an average monthly correlation of over 85% between India's Nifty 50 and the S&P
500 in the previous year.
•

Review of Research

• Methodology of review of literature

Number of research 10
papers reviewed
National Papers 2
International Papers 8
 Review of published research work

Sr Title and Publication Methodology Conclusion Observation

Author Details
1. Environmenta International Secondary Stock market is If you talk in other
l Factors Multi- data was basically one of aspects, stock market
Influencing Disciplinary followed. the most versatile is basically that
Fluctuation of Journal sectors in the platform which
Share Prices system of financial provides various
on Nigeria aspect and it plays securities and
Stock a very essential derivatives for trading
Exchange role in the without any of the
Market development of barriers.
Author= economy.
Gunu, U. &
Idris, I
2. Analysis the International Secondary The factors which This particular study
Determinants Journal of data was were considered was showing that the
of Market Business and followed. are the money movement of the stock
Stock Price Management supply, inflation, market has greatly
Movements: including the been influenced by
An Empirical growth in GDP, money supply,
Study of credit deposit inflation, C/D ratio, as
Jordanian ratio. well as fiscal deficit
Commercial apart from the
Banks stability in the political
  aspect.
Author: AL,
FN. & Shubiri
3. Factors International Secondary  Itis very It has been found that
affecting journal of data was important for each factors like Flow of
indian stock contemporary followed and every investor Foreign Institutional
market. research in to be aware about Investors, Gross
Engineering management major factors Domestic Product,
and health affecting stock interest are major
science market. In this factors responsible to
Author = paper it has been create movement in
joshi,M(2013) tried to find out Indian stock market.
major factors
responsible for up-
down movement
in Indian stock
market.
 Title and Publication Methodology Conclusion Observation
author details

4. Determinants International Secondary The movement The results

of stock journal of data was of stock price as indicate that
market research in followed a consequence firms’ book
Author = management of firm specific value, earning
tandon, K & & technology factors such as per share and
malhotra ,N. dividend, book price-earnings
value, etc. ratio are
having a
significant
positive
association
with firm’s 
5. Impact of International Secondary data Current market The first
fundamental journal of business was followed price is highly segment of the
factors on and management overvalued paper attempts
stock price invention compared to the to find out the
Author = ideal value of co-relation
haque,S & stocks, that the between market
faruquee impact of price of the
unauthorized stocks and
information has companies
a greater
influence in
pharmaceuticals
and chemical
industry in DSE.
6. Stock market International Secondary data Investors do find To understand
and factors journal of advance was followed trading volume the relation
affecting research an important between the
trading vol. parameter in stock price and
author = order to estimate volume in the
sapna&dani, market trends. stock market
V. and secondly to
analyze different
factors which
affect the
trading volume
of the stocks. 
 Title and author Publication Methodology Conclusion Observation
details
7 Factors affecting European Secondary data Researcher The most impact
stock market journal of was followed recommended a was the inflation
price in Amman business and several rate, while the
stock exchange management recommendations least one was the
Author = such as, nature of firm
allahawaih,S& strengthening the business. 
amro role of companies
through their
involvement in
the drafting of
laws and
legislations

8 The impact of oil Development Secondary data The stock market The response of
price fluctuations and emerging was followed inefficiency, stock markets to
on stock market economies among others, oil price
Author = Le,Th appeared to have volatilities in
& chang, Y slowed the Japan,
responses of the Singapore,
stock market to Korea and
aggregate shocks Malaysia by
such as oil price applying the
surges. generalized
impulse
response .

9. Existence of The financial Secondary data The investable The investable

investable review was followed premium on premium
premiums in emerging stocks impacts stock
emerging market returns has returns at least
investable stocks increased in as much as other
Author = girard, strength, fundamental
EC implying that premiums such
foreign as loads on
ownership has political,
greater influence economic, and
on local markets financial risk
in recent years. factors

10 The International Secondary data Market price of Amman Stock

. determinants of journal of was followed stock dividend Exchange in
market stock business and percentage, gross Jordan is
price movement management domestic inefficient in
Author = product, and weak form. The
AL,FN.&shubiri negative sample of study
 significant includes the 14
relationship on commercial
inflation and banks of
lending interest Amman Stock
rates. Exchange for
the period 2005-
2008.
11 The Ups and Published in Secondary data After taking “After taking
Downs of of the Business was followed charge, BSEC’s charge, BSEC’s
Stock Market standards new Commission new Commission
has taken several has taken
Author= Md positive policy several positive
Bokhtiar Hassan decisions. “As a policy decisions.
result, after a As a result, after
long recession, a long recession,
the market the market
returned to the returned to the
upward trend. upward trend.
Positive attitude Positive attitude
of Government of Government
and appropriate and appropriate
initiatives of initiatives of
Commission have Commission
made investors have made
hopeful about the investors
market.” hopeful about
the market.”

Research gap
• After reviewing the various research papers, it was found that
not much work has been done on the trend analysis of indian
stock market with respect to Nifty Index , pre covid and during
covid.

Objectives
• To study the reason of price fluctuations in the Indian Stock
Market.
• To study the phases of stock market
• To analyse the trends of stock prices pre-covid and during covid
Reason of price fluctuations in the Indian Stock Market

• Investing in the stock market is a simple and fast way to increase your money. Buying
and selling stocks for a profit is the primary objective of stock market trading.
Investing in the stock market is an outcome of this strategy.
• The volatility of the market may be a major stumbling block for new traders. It's
understandable that you would be wary about getting your hands dirty in the stock
market. If you want to learn the basics of stock market trading, we'll offer you a fast
overview of the factors that influence stock prices to increase or decrease. As soon as
you've mastered this concept, you'll be able to see the underlying causes of price
fluctuations and trade with more confidence.

Demand-supply economics affects stock market pricing. The stock price will increase if the
demand for it is greater than the supply. Higher the demand-supply imbalance, the higher the
price. A stock's price per share rises when a large number of traders are purchasing it. The
opposite is also true. Traders who are selling stock X will cause the stock's share price to fall.
They're referring to this fluctuating demand and supply when they speak of "market forces"
or "market dangers." Economics 101 has nothing to do with it. It's essential to investigate the
numerous factors that motivate consumers to purchase or sell shares of a certain firm.
Company Earnings
People invest long-term in a business based on its value and how much money it is expected
to make in the future. A company's share price rises when it makes a profit, which attracts
additional investors. An Earnings Report or Quarterly Report is required by companies that
are listed on a stock exchange (and whose shares are traded in the stock market) every quarter
and every year. A company's stock will naturally be in higher demand if it produces strong
revenue or profits per share growth. When reviewing a company's quarterly earnings report,
what should you be looking for? Observe whether the company's profits have surpassed or
fallen short of forecasts. The stock price normally rises if the corporation has made this
move. The company's share price, on the other hand, is likely to decline if the company's
profits fail to meet expectations or if it earns less than it was expected to earn.
Good news (or bad news)
Financial health is often considered as a sign of a firm's positive news, such as an interest-rate
increase or acquisition of another company. Stock prices may rise as a consequence. Markets
are still responding to this news and may be turbulent towards the beginning of the day when
traders are referring to it.
Furthermore, a corporation that needs to sell a portion of its stock, lay off workers, or shut
down branches is perceived as having financial difficulties or a decrease in profits. For
concern that the share price would plummet or worse, that the firm will shut down, the shares
of these companies are likely to be sold.
The price of stocks in sectors that are influenced by changes in government policy and key
financial events like the yearly budget may also be affected by these announcements/events.
Nonetheless, they are frequently impulsive responses.
Overvaluation and Undervaluation
People dump stock because of the fear that the company's shares will lose all of their value if
it announces negative news. This leads in an undervalued share price. Some experienced
traders keep an eye out for times when the market is undervalued and attempt to get in. To
put it another way, they do because they believe that the company's performance will
improve in the near future. This, they believe, will lead to a rise in demand for their product.
They are betting on an increase in the stock price that will result in a financial gain.
Share prices increase when investors believe a firm will do well in the future. A bubble
known as the dot-com bubble was formed in the United States in the late 1990s. As the name
implies, dot com firms' stock values surged owing to anticipated profits. However, the firms
failed to live up to these expectations, or in other words, the "bubble" popped. Dot-com firms
sprang out of nowhere, were listed on the stock market, overspent shareholders' money, failed
to meet expectations, and numerous closed down, resulting in losses for investors.

PHASES OF STOCK MARKET

“Cycles are prevalent in all aspects of life; they range from the very short-term, like the life
cycle of a June bug, which lives only a few days, to the life cycle of a planet, which takes
billions of years. No matter what market you are referring to, all go through the same phases
and are cyclical. They rise, peak, dip, and then bottom out. When one market cycle is
finished, the next one begins.”

Accumulation: The accumulation phase is the first phase of an upswing. This is the point at
which large-scale institutional investors begin to accumulate stakes in a company's shares.
Support and resistance levels are used to locate entry points at this time in the stock cycle.
The distal portion of a very well trading range, for example, may be a good time for investors
to start buying an asset.
Markup: The markup cycle begins after the accumulation phase ends. The price of a stock
continues to rise, which is good news for trend and momentum investors. Trading choices are
aided by indicators like moving averages (MA) and trendlines at this phase of the market
cycle. If a company's price returns to its 20-day moving average, for example, an investor
could consider purchasing the stock.
Distribution: At this point in the stock market cycle, institutional investors begin to reduce
their stakes. After a few days of consolidation, the price movement starts to drift laterally. In
the distribution phase, a negative technical difference between a stock's price and a technical
indicator is more likely to emerge. Relative strength index (RSI) may make lower highs while
stock price can reach greater highs, for example.
Markdown: Investor’s hurry to sell their holdings during this time, which might lead to an
increase in volatility. Investors sold their shares as the market retraced to the higher, while
traders initiate short positions to profit from declining prices. The climactic volume
associated with this stage of the stock cycle may be explained by the fact that margin calls
often rise towards the end of the markdown cycle, as stock prices approach their lows.
There has so far been no major stock market sell-off in India, and some asset managers are
pointing to less tight restrictions on activity as one of the reasons, at least for the time being.

Analyses the trends of stock prices pre-covid and during covid

Amidst claims of over 300,000 infections and over 4,000 fatalities per day, India's benchmark
equities index has been trending in line with its regional counterparts. Between mid-February
and now, the S&P BSE Sensex index was down 6.6%, which is approximately the same as
the MSCI AC Asia Pacific index has dropped. Comparatively, when the coronavirus
epidemic broke out in March of last year, the Sensex fell by 23%.

Investor withdrawals from India's stock market in April were approximately $1.5 billion,
compared to $8.4 billion during the peak of the collapse last March's stock market turmoil.
After four consecutive weeks of outflows, they started buying Indian shares this week. State
governments have enacted more restricted and regional lockdown measures, but the fear is
that the epidemic may trigger a fast rise in restrictions again.
There’s a huge differences between the pattern of closing indexes of the month Jan and Apr
2020, as people were withdrawing their money from the market and market has been facing
some issued as a result of it.

Hypothesis
• Null hypothesis (Ho): There is no significant difference in the
trends of stock prices of Nifty Index pre-covid and during covid

Methodology
• Research methodology is a plan of work describing various
aspects of the study in logical sequence along with the
 methodologies to be employed.

Research Design

Sample design
• A definite plan for obtaining a sample from a given population
and methods of selecting items to be observed for a study.
• The study is based on public sector banks of India.
• Based on the market capitalization State Bank of India has been
selected considering it is the number 1 bank in the public

Scope of the Study

The undertaken research will be helpful in the following areas:
 Facilitates professionals, investors and various other people in
their investment decision making process.
 Many researches have been done by different researchers using
company specific . But present research will emphasize in
establishing an important linkage between stock returns and
exchange rates.
 Assists the interested group to take managerial, operational
decision efficiently.

Data Collection Technique

Data collection technique refers to the sources from where data

has to be collected.

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Plan for work and targets to be achieved

 Estimated Expenditure

Particulars Amount (In Rs)

Books and Journals 1000
Equipment No
Field work and travel No
Chemical or glassware No
Printing and Stationery 500
Miscellaneous No
Total 1500