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Indian Equity Markets: Performance Analysis over 2009 -- M Syam Babu Faculty Associate, FedUni, Hyderabad. -- Dr.

B Ramachandra Reddy Professor, Department of Commerce, Sri Venkateswara University, Tirupati. -- Dr. G Narasimhulu, Lecturer, SKIT, Srikalahasti. After the global meltdown in 2008, the year 2009 was one of recovery – instilling hope amongst equity investors. The Indian equity markets witnessed a sharp upward rally from the lows that were witnessed in March 2009. Positive economic data from the Western world, improving consumer confidence, increasing industrial production, and rising domestic consumption are some of the factors that have lent strength to the equity markets. This article analyzes how the Indian equity markets performed in 2009. After a rapid downfall in 2008, the Indian capital markets performed very well in 2009. After starting off in a whimper on the back of weak global cues and the Satyam fiasco, the Sensex, in 2009, surprised investors by gaining 80% over the previous year, Actually, the bellwether index doubled itself towards the end of the year from its March bottom level of 8160. The gravity-defying move by the equity markets was largely driven by improving economic conditions and ample liquidity available in the system. At the dawn of the New Year, a sense of excitement, mixed with apprehensions, prevailed in the air. Will the good run of the sensex continue in 2010? Actually, in 2009, all sectors did not participate in the upward rally of the stock market. Hence, the performance in 2010 will depend on the sector wise performance in 2009. This article presents the performance of various sectors in 2009 and the macro elements which the investors have to observe in the current year to make their investment decisions. Broadly, the major sectors involved in stock market activity are: auto, banking, capital goods, consumer durables, FMCG, healthcare, information technology, metal, oil and gas, power and realty stocks. The BSE maintains sectoral indices for these segments. The performance of the equity market is explained with the help of these sectoral indices. The BSE sensitive index (30 Scrips) (Sensex) increased from 9,903.46 points on 1-1-2009 to 17,464.81 on 31-12-2009. This means that the Sensex increased by 76.35% during 2009. The lower limit of sensex during 2009 was 8, 047.17 (recorded on March 6, 2009) and upper limit was 17,464.81 points (recorded on the last trading day of 2009). The average monthly returns from the Sensex was 5.49% and the monthly compounded returns was 5.07% during the year. FMCG sector was the worst performer and the metals sector was the best performer during this period. While the FMCG, healthcare, realty, oil and gas and power indices underperformed, the banking, consumer durables, IT, auto and metal indices over performed during 2009, compared to the Sensex. The details are given in Table 1 and Figure 1.

As can be seen from Table 1 and the Figure 1, the metal sector gave more than 10% returns per month. The stocks of SAIL, TATA Steel, Jindal Steel, NMDC, etc., performed very well during 2009. It appeared that the monetary stimulate packages announced by the government at the end of 2008 and at the beginning of 2009 had begun to yield results. The stocks of Tata Motors, Mahindra&Mahindra etc., gave the best returns in the year. The monetary policy of RBI gave a further impetus to the financial sectors. The 18 shares in the banking index showed an upward trend during the study period. Overall, the average monthly returns of all indices was more than 3%, compounded monthly returns more than 2.85% and the annual returns of all indices was more than 40%.

2008. etc. IPO Performance During 2009.42 points. The first issue to attract investors under the anchor investor scheme in India. For the first time in the history of Dalal Street. Hence. the Adani Power IPO.81 cr to Rs. up 17.25% (from Rs. Of these 20 companies. it is far below its all time high by 17. The realty sector witnessed its worst performance in 2009. listed at about 75% premium and gave more than 200% returns. The details of performance of various sectors are presented in Table2. lost more than 60% of their market capitalization.87%. 62 companies gave more than 50% returns.21 points level from the previous closing of 12174. which was recorded on January 8. which gave 265. whereas the traders follow the market multiples to deal with secondary market operations. whereas Oil India Limited increased its market value by 14. Though this sector recovered by more than 270% from its 2009 lows. trading had been suspended for an increase in value of the Sensex. Realty stocks like DLF.303. Unitech.63 cr by the end of 2009). Many reasons can be identified for the poor performance of the realty sector. Two companies out of 20 companies lost more than 40% and only two companies gave more than 100% returns within a short period of time to their investors. Also. The IPO of Edserv Softsystems IPO. Highly sub-scribed IPOs also failed to hold to at least their issue price.34% in 2009. the IPO of NHPC. when companies like Edelweiss Capital and Mundra Port. 2009. Overall. was subscribed only 1.284. when the average subscription was 14 times. The auto. This shows that market sentiments play a very crucial role in determining the market returns.. FMCG and healthcare sectors managed to recover all the capitalization which was lost during the panic conditions that prevailed in 2008 and reached new highs in 2009.545. Out of the 103 companies that got listed during 2007.42% of its issue price. The main reason for the under performance of the IPOs in the secondary market is that the company coming out with the IPO discounts its forecasted future earnings to fix the price of IPO and follows an aggressive pricing strategy. Some analysts may argue that small stocks give good returns through public issues.36 times– a sharp decline from 2007. Potential investors have to conduct a fundamental study of various stocks before investing in the stock markets.65%. The macro environment consists of the economic. yet it could not recover more than 65% market capitalization from its all time high. It is known that the returns from investment in capital market depend on the macro and micro environment. the average retail participation was 2. after the declaration of results of the General Elections. For example. they performed well in 2009. 19. The participation of retail investors was also very low during 2009. the issue price is not a criterion to judge the performance of a public issue. which attracted huge investor response. The details of the IPO performance are presented in Table3. Although the remaining sectors did not recover their lost capitalization. The performance of public issues during 2009 stands in stark contrast to that in 2007.30 times and retail investors subscription amounted to 1.02 times. the short-term investors must take adequate care while investing in the IPOs.08% returns. DLF lost its 5th rank and stood at the 21st place in the order of total market capitalization of the companies in the country.Though the Sensex gave more than 85% returns in 2009. psychological and demographic factors. lost 10.81 cr. But the IPO of Euro Multivision Limited yielded a negative return of 58. It means that 45% of the IPOs in 2009 failed to bring listing gains to the investors. in the 20 public offers. 19. 20 companies came out with IPOs and raised Rs. also failed to hold its issue price in secondary market. 19. This sector was unable to recover more than 44% capitalization. any positive . political.303. Another sector which did not recover its lost capitalization was consumer durables. Sensex increased to 14. On May 18. The total market capitalization of the issues was reduced by just 1. compared to their respective lows in the previous year.34%. The political environment in 2009 was very attractive. nine companies failed to maintain even their issue price in the secondary market. Though the long-term investors will benefit from the IPOs.

8% towards the end of the year due to deficient monsoon exacerbating supply conditions.160 on March 09. the year 2010 would be one of consolidation. While this rally has elicited optimism and joy among the investors it has also fueled a debate: is this rally sustainable? The Sensex has more than doubled—from a low of 8. This phenomenal rise and that too in such a short span of time is unprecedented. based on WPI. According to the estimates of the Central Statistical Organization (CSO). which increased to 19. The Current Bull Run … Can It Sustain ? -.8%. however. Potential investors have to keep both these factors in mind while investing in 2010. The growth in industrial production also accelerated to 7. Also.9% in the third quarter. The Indian stockmarket indices have been witnessing a strong upward rally in the past few months powered by FII inflows and positive global market cues.1% in the second quarter of 2009 from 5. Year-on-year WPI inflation turned negative during June-August 2009. 2009 and further rose to 11. The inflation rate. earnings profits and PE multiples of the company. Mumbai.development in the European or the US markets has an immediate effect on the sentiments of the investors. Prices of essential commodities have been steadily increasing.0%). Reference # 6M-2010-02-02-01. as compared with 1. brought negative sentiment in the market. they are also anxious about whether this bull run will sustain (Refer Table 1). and later returned to a positive zone in the wake of a spurt in prices of food items and rise in global crude oil prices. as on October 08. While the investors are rejoicing over this huge increase in the stock market indices.3% in the previous month. 2009 to 16. The annual year-on-year inflation for the month of November 2009 based on monthly WPI increased to 4. expected to show a positive performance in 2010. It leads the way and we are just followers of the market trend. These macro environment factors are. inventors have to search for stock-specific investment opportunities based on growth rate in sales. the Indian economy in 2009 exhibited signs of recovery with accelerated growth in GDP.8% in the first quarter. despite drought like conditions in some parts of the country and floods in the others during the year.Ashish Pai Freelance Writer. Conclusion The selection of an equity investment opportunity depends on many macro and micro elements. Apart from these factors. According to market analysts. After a sharp decline in the growth rate in 2008. 2009. investors have to observe the micro environment in 2010. we shall first try to identify the reasons for this current bull run. The economic factors in 2009 also attracted investments.9%). uncertainty about the performance of the developed economies remains a key concern for the equity markets in this year. the strategy to be adopted by the RBI to exit from the fiscal and monetary stimulus measures would add to the volatility in the equity markets.0%) and services sector (9. It further increased to 7. showed significant volatility during the year. 2009.843. Hence. We will also `attempt' to understand whether the market is overvalued and whether the bull run can sustain. (The word `attempt' here is significant because. it is difficult to predict the market. The agricultural sector also recorded a positive growth (0. real GDP growth recovered to 6. However.) . Before delving into this.1% during April-October.7% in November. But food inflation. plainly speaking. The sequential recovery was driven by notable turnaround in industrial output (9. Market collectively functions in a particular manner.

Increase in Capex Corporates have started raising funds for capital expansion and are venturing into new vistas.. insurance. The mandate for a stable government at the center increased market expectations with regard to economic reforms.323 cr. education. It seems that the worst is over and we have begun to see the "green shoots. Government Policies The results of the 15th Lok Sabha general elections were a positive surprise.Reasons for the Bull Run Some of the reasons for the recent stock market bull run are enumerated below: Liquidity and FII Inflows The most significant contributor to the stock market bull run has been the FII inflows." However. It is expected that some public sector banks and power utilities will also tap the primary market soon. As such. stable policies and good governance. Indian Companies not Heavily Affected by Global Downturn The corporate results for the financial year 2008-2009 and also for the first quarter for 2009-2010 reveal that Indian companies have delivered better than expected results. etc. especially in the financial sector such as banking. there has been a massive inflow of funds into emerging markets like India. Data from the different sectors of the economy has been encouraging. With most of the central banks across the world following an `easy' monetary policy. Low Inflation . like healthcare. infrastructure. 2009 till October 07. 68. there are concerns whether this recovery is for real or is just an aberration. The total inflow of funds on account of FII investments for the last seven months (April 01. the global financial system is flush with funds. The M&A arena is also witnessing action. The global credit crisis has not impacted the Indian companies severely. and socially important sectors. Signs of global economic recovery Signs of revival are emerging from the developed economies. 2009) was Rs. The disinvestment process has been kicked off by the government with the primary market issues of NHPC and Oil India. It is expected that the newly formed government will be able to deliver on key economic initiatives. etc.

Bull Run can be Sustained if ………. the market could be expensive even at 10. The RBI has been following an easy monetary policy – giving a further impetus to revival and growth.39. one useful metric that can be used to accurately value the market is the price-earnings (P/E) ratio. along with improving global scenario. When the Sensex touched 21. are expected to further upgrade the earnings estimates. The current P/E ratio for the Sensex is 22. Another metric to value the market is the dividend yield.53 and Dividend Yield was 0. with better-than anticipated numbers. The ratio for the other indices is given in Table 2. Economic Growth In terms of earnings growth. That is because a market is valued according to the estimated future growth in profits of companies. Continued FII Inflows .000 or that they are more expensive when it is at 16. have been encouraging.10. It would be incorrect to assume that the markets are cheaper when the Sensex is at 10. What actually matters is the earnings outlook of the companies.000 levels. A more widespread recovery in economic activity. which would provide support to the market.800. The current dividend yield for the Sensex is 1. The growth outlook for companies could be brighter when the market is at 16. Is the Market Overvalued A mere look at the Sensex or Nifty numbers does not give an idea if the market is overvalued. In case the future earnings are expected to be better..000 points. So. pick-up in investment and consumption.The low inflation levels have helped the Indian corporate to raise funds at cheaper interest rates. if the prospects for growth are muted going ahead. the first quarter results of India Inc. cement. This is important because analysts believe that it has triggered an earnings upgrade cycle.88. the indices may have a higher P/E ratio. say 34%. The upward revision in the earnings estimates has been largely driven by automobile. then it is worth buying the stocks because the current returns are good and one can expect capital appreciation over the next few years. Conversely. information technology (IT) services and banking stocks. If the dividend yield is.800 points and so the market could actually be cheaper at those levels. infrastructure. the P/E ratio was 25.

or the government should contribute to the development of a robust capital market. Capital Market Initiatives The government should facilitate greater market participation by provident funds. this optimism has been built in just six months. Optimism in Indian Stock Markets: How Long Will It Last? -. Conclusion It is important for India to undertake structural and progressive reforms so that the benefits of liberalization and economic growth trickle down to all segments of society. Reference # 6M-2009-11-02-01.leading to lower profits. This is not the first time that Indian markets . pension funds. The time for reckoning has come and all players involved in the market. industry. It should also look at removing Securities Transaction Tax and certain other impediments so that there is an impetus for the growth of capital markets. optimism in the international markets. It is expected that with a rise in the prices of consumables. FedUni. The Indian markets are again witnessing new levels of optimism. Academic Wing (Finance). This will increase the cost of borrowing for corporates. combined with the governments borrowing it could crowd out private borrowers. One of the reasons for the market crash in the first three months of this year was the pull out of money by FIIs.The flow of money into Indian markets from FIIs has to continue for the bull run to continue. The future of the economy lies in the hands of the new formed government which can either take the economy to a higher growth path (and the stock market will follow) or can waste the opportunity and fail to capitalize on India's potential. pick up in the industrial activity and a growing belief that the worst is behind us. Will this rally continue is what remains to be seen. etc. It has been 20 months since the bull market peaked in January 2008. it will be a true bull run which can sustain for a very long time to come irrespective of the changes in the global market. Government Push for Economic Reforms The high fiscal deficit and the large borrowing program also mean that there is a limited window for action. be it investors. A 'loose' monetary policy could trigger off inflationary pressures next year and. Indian stock markets have rebounded drastically in the last few months – aided by the global stock market rally. Inflation Management Another major requirement is managing the inflation. This is something that the government should guard against. From the extreme pessimism that prevailed in March 2009.Bhaskar Mutyala. Faculty Associate. inflation may rise which may cause a rise in the interest rates. Hyderabad. If a large section of the Indian society can participate in contributing capital to the corporates via the stock market. It seems like the Indian stock markets are oscillating between extreme optimism and pessimism.

This again caused the stock markets in the emerging economies to crash. 52. It was argued that internal consumption in these economies was sufficient to achieve the targeted economic growth. These stimulus packages were aimed at saving the economies from recession. mostly driven by the FII investments. Indian markets have became the target of low yielding funds from developed economies.480 cr. The global recession and the extreme pessimism also had an effect on the real economic indicators. In the year 2008. In line with the global economies. The root cause of the recent global recession was the massive build up of leverage and creation of liquidity glut which caused the market participants to overlook the risk and inflation that was being built in the asset prices. FIIs pulled out Rs. But all these theories were proved wrong and Indian stock markets witnessed a huge decline in the year 2008 in sync with the global stock markets.are exhibiting this trend. also witnessed a huge outflow of funds. In order to combat the global economic recession and prevent it from further deteriorating into a depression. Ever since the ongoing economic reforms have put India on the list of emerging economies. there was a perception that emerging economies have decoupled from the developed markets and they can continue to grow without the FII funds and any adverse development in the developed economies would not have any repurcussions on these economies. governments across the globe announced a host of stimulus packages. the emerging economies witnessed a huge outflow of funds (FII outflows).794 cr dragging down the Nifty to 2000 levels which subsequently created extreme pessimism in the markets. This subsequently created a massive upheaval in the financial markets across the world. The US government too declared massive stimulus packages and brought down interest rates to almost zero. The collapse of big investment banks in the US created a liquidity crunch in the global economic system. In 2008 itself. the early days of global economic recession. Indian stock markets. 58. This pullout continued until March 2009 with a net amount of Rs. the Indian government also declared various stimulus packages in 2008 to boost the industries in the economy to combat the global recession. In 2008. The US subprime crisis finally caused the bubble to burst. Negative IIP growth numbers were witnessed for four subsequent months from December 2008 to March 2009 (Refer Chart 1). This created a huge bubble in the all asset prices including the emerging economy stocks. .

the Indian markets have seen huge FII inflows.However. 60. the dotcom boom of 2000. All these factors led to a turnaround in the global stock markets. three times in the last ten years. which ultimately chased the potential emerging economy stock markets and commodities. By the end of September 2009. Indian markets attracted a cumulative FII net inflow of Rs. which again attracted more FII funds into the Indian markets. 70. Hence. From April this year. the first leg of bull market in 2004 and the global credit boom of 2007. the PE multiple was above the level of 22 and FII inflows were also at the peak (Refer Table 1). Benchmark index Nifty crossed the psychological barrier of `5000' mark in October and continues to sustain above that. there was a perception that the announced stimulus packages would not be sufficient for the economy to combat the crisis. All these developments have ultimately changed the entire perception in the market postponing the much awaited correction.000 cr. At all these times. The IIP reached a peak level of 10.245 cr witnessed in the year 2007. If we analyze the PE multiple data of the last 10 years (given in Chart 2). Whenever there was a deviation from this range. causing the stock market to rise from the historic low levels that were witnessed in March.4% in August this year. which is just below the PE multiple peak of 28 that prevailed in January 2008 just before the crash. the markets appear to be in a bubble zone as the Nifty is now trading at a PE multiple of nearly 24. there was corresponding optimism and pessimism in the market. Stock Market PEs Despite all these developments. The US stimulus packages resulted in pumping of huge chunk of dollars into the global economic system. . The government's stimulus packages started yielding positive results from April onwards. This figure is expected to break the historical net inflows of Rs. extreme pessimism prevailed in the markets from January to March 2009 despite the stimulus support from the governments. we can observe that it averaged 17 and was mostly oscillating between the 15 and 20. Indian markets have witnessed the similar kind of optimism that is being witnessed now.

After every case of over optimism. the economic environment has to support the bulls in taking the market again to the optimistic levels and to prevent them from going into a long period of pessimism. All these corrections are usually led by the huge outflow of FII money from the stock markets (Refer Table 1). After that. It must be noted here that the current economic growth and corporate earnings growth are mainly because of the huge stimulus packages and the asset price inflations. the markets witness a correction that take the stock valuations again to the below average levels. But post the correction in 2004. One thing is for sure even for the events happening in the markets now. How Long will it Last? . there should be a market correction that would again take the markets to the average PE levels of 16-17. Following this over optimism. The root cause of the current crisis has been the leverage problem and liquidity driven asset price inflation and none of these problems have been solved so far. Many analysts are of the view that the worst is still ahead for the global economy. the markets failed to overcome the pessimism which extended the period of recovery. The Indian economy now has to achieve growth in real demand which is a difficult task. The stimulus packages announced by the governments are actually worsening the situation. economic indicators and valuations favored the bulls which took the market into a sustained long-term bull phase. After both the dotcom bubble in 2000 and credit bubble in 2007.

each country has its own characteristics and unique behavior pattern of its savers and investors. Figure 1 depicts the relationship between the following stock market indices: BSE Sensex. it would lead to quick withdrawal of money from the Indian markets. This article seeks to examine the extent to which stock markets in Asia are interrelated. Although the pattern observed in Figure 1 in all the stock market indices may look similar. is investing more than its savings. This would ultimately create euphoria in the markets – leading to huge correction. Figure 3 shows that if we split the time period into bull and bear periods and . This would cover intercountry flow of goods and services. The time period is 24. It has been suggested that a way out of this is to create investment opportunities in the east itself and together this part can grow faster. The analysis shows that the markets have increasingly become more sensitive to international financial flows. like India. US in particular. volatility has increased in all the markets. mergers and acquisitions.2. Kolkata. Industrial Investment Bank of India Ltd. This is shown in Figures 2 and 3. we feel. In that sense they have got integrated with the rest of the world. Emerging economies. Among these indices. The excess savings in the east is funding the excess spending of the west which has made the state of savings of the east extremely sensitive to market conditions in the west. However. This is. Columnist.9. One of the reasons for the present worldwide slump in stock markets and other asset markets is "global imbalance". our limited purpose here is to examine the extent to which stock markets in this part of the world are interrelated. movement of labor. Figure 1 reveals that the indices are indeed related. Reference # 6M-2009-11-03-01. inter-country flow of savings and investment. Each country also has its own set of financial institutions and rules and regulations which affect market behavior.Tamal Datta Chaudhuri Chief General Manager. whereas the western part of the world. Asian Capital Markets Integration -. one has to take stock of the current state of interdependence. This implies that these markets have increasingly become more sensitive to international financial flows and in that sense have got integrated with the rest of the world. Once the liquidity in the global economic system tightens or the developed economies find better yielding investment avenues in their system. Figure 2 indicates that over the time period under consideration. market size and political and social conditions. should get reflected in volatility in market returns. Kuala Lumpur Composite.2007 to 18. They have all fallen in this market downturn in the last one year. have still a long way to go for completely decoupling themselves from the developed international markets.Rituparna Dutta Freelancer. -.2009.The period and level of sustainability of the current optimism is perhaps dependent on the continuing flow of FII (hot) money into the markets. (IIBI). Briefly. Shanghai Composite. This. To examine the opportunities in the eastern part of the world that will benefit this group of countries. Strait Times. of course. Hang Seng and Seoul Composite. not to say that the eastern part of the world should cut itself from the western countries. this is an observed phenomenon where the eastern part of the world is saving more than its investments.

The next volatile index returns is the Hang Seng. the correlation with Kuala Lumpur Composite has increased and is positive in 2007-08. . This is a reflection of the fact that India and China are the most happening countries and financial capital has moved significantly into these countries in recent times. Three observations can be made. whereas that with Strait Times has increased. Second. the correlation with Seoul Composite. with Seoul the relationship has gone down. However.look at periodic volatility. Strait Times and Hang Seng has been high and positive over the years. 2006-07 and 2007-08. Table 1 gives the extent of correlation of volatility of Sensex returns with that of the other indices for the years 2005-06. First. We now turn to measures of interdependence and in this regard. Third. the extent of correlation between volatility of the Sensex and the Shanghai Index has not been high and has fallen over the years. the Sensex and the Shanghai Composite are relatively more volatile than the other indices.

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. it can be said that Hang Seng Granger causes Sensex. Thus. with respect to the Sensex and the Hang Seng.908) = F(3. The regression results and the inferences drawn are given at the end of each of the tables.37. a) = (1. As F-value is more than the critical value at all levels of significance. 2.78 – at various levels of significance). a) = (1. 3. 2.08. 3. a two way causality has been established.37. it does not establish any causal relationship. it can be said that Sensex Granger causes Hang Seng.60. 2.60. we now present the results of Granger causality tests that we performed with the index returns for the period from March 2005 to September 2008. The objective is to see whether the movement in the Sensex returns is caused by index returns of other Asian equity markets. it can be inferred that Kuala Lumpur Composite does not Granger cause Sensex (Refer Table 4). As the F-value is less than the critical value at all levels of significance.08. As F-value is more than the critical value at most levels of significance.78—at various levels of significance). 2. For this.908) = F(3.Although the discussion establishes the extent of association. From Table 2 we get the value of F (3. From Table 3 we get the value of F (3.

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it can be inferred that Sensex does not Granger cause Kuala Lumpur Composite (Refer Table 5). . We can thus infer that there does not exist any causal relationship between the movement in the returns of the two indices.As the F-value is less than the critical value at all levels of significance.

2.From Table 6 we get the value of F (3. 2. 3. As F-value is more than the critical value at all levels of significance. it can be said that Seoul Composite Granger causes Sensex returns.08.78—at various levels of significance).908) = F(3. a) = (1. .37.60.

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908) = F(3. 3. .08. 2.From Table 7 we get the value of F (3. a) = (1.78—at various levels of significance).37.60. In this case a one way causality has been established. As F-value is less than the critical value at almost all levels of significance. it can be said that Sensex does not Granger cause Seoul Composite. 2.

The above analysis shows that there does exist any form of causality between these two index returns. .As the F-value is less than the critical value at all levels of significance. As the F-value is less than the critical value at all levels of significance. it can be said that Sensex returns does not Granger cause Shanghai returns (Refer Table 9). it can be said that Shanghai returns does not Granger cause Sensex returns (Refer Table 8).

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2. 2.From Table 10 we get the value of F (3.08.908) = F(3.37. . a) = (1.60. 3. The F-value suggests that the causality can be established at 10% level of significance.78—at various levels of significance).

08. As F-value is more than the critical value at all levels of significance.78—at various levels of significance). it can be said that Strait Times returns Granger causes Sensex returns.From Table 11 we get the value of F (3. a) = (1. 3. .37. 2.60.908) = F(3. 2.

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. Our results show that there is indeed some relationship between these markets and financial sector players should take these relationships into cognizance while making portfolio decisions.The article presents a methodology of analyzing relationship between stock market movements and index returns in Asian stock markets. Reference # 6M-2009-09-03-01.