Global Journal of Research in Management

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A Study of Relationship Between Indian Stock Market and International Stock Market


Affiliations
1 Assistant Professor - Finance Area,Tolani Motwane Institute of Management Studies, Adipur., India
2 second year student of MBA programme at Tolani Motwane Institute of Management Studies, Adipur., India
3 second year student of MBA programme at Tolani Motwane Institute of Management Studies, Adipur., India
     

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We have conducted the study to know the relationship between Indian stock market and international stock markets. As in today’s time period people are investing comparatively more in stock market, so it becomes essential to take calculative risk. As we know after globalization, Indian investors have been trading globally and so for minimizing their risk in stock market, which is due to volatility and other factors. This study will help investors to know about the trend of past 10 years for its inter linkages between the stock markets of countries namely India, US, Japan and China. For minimizing the loss in stock market, we have tested the daily data from January 2010 to December 2020 by applying Unit Root Test and Engle-Granger Cointegration Test. The results of Augmented Dickey Fuller Test shows that the data of all stock markets are stationary at first difference. And the results of Engle-Granger Causality Test shows that there exists cointegration between the stock markets. This test has given the results that stock market of India is interlinked with US, Japan and China. Now it can be said that decision affecting the stock market of US, Japan or China [in any of the mentioned countries] will also affect the Indian stock market. Investors now can take decision wisely about their international trading in stock market. As the stock markets are interlinked with Indian stock markets, this also means that decisions or changes or the factors affecting the Indian stock market will also affect the stock markets of US, Japan and China.
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  • A Study of Relationship Between Indian Stock Market and International Stock Market

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Authors

Hitendra Lachhwani
Assistant Professor - Finance Area,Tolani Motwane Institute of Management Studies, Adipur., India
Divya Issrani
second year student of MBA programme at Tolani Motwane Institute of Management Studies, Adipur., India
Vanshika Ramchandani
second year student of MBA programme at Tolani Motwane Institute of Management Studies, Adipur., India

Abstract


We have conducted the study to know the relationship between Indian stock market and international stock markets. As in today’s time period people are investing comparatively more in stock market, so it becomes essential to take calculative risk. As we know after globalization, Indian investors have been trading globally and so for minimizing their risk in stock market, which is due to volatility and other factors. This study will help investors to know about the trend of past 10 years for its inter linkages between the stock markets of countries namely India, US, Japan and China. For minimizing the loss in stock market, we have tested the daily data from January 2010 to December 2020 by applying Unit Root Test and Engle-Granger Cointegration Test. The results of Augmented Dickey Fuller Test shows that the data of all stock markets are stationary at first difference. And the results of Engle-Granger Causality Test shows that there exists cointegration between the stock markets. This test has given the results that stock market of India is interlinked with US, Japan and China. Now it can be said that decision affecting the stock market of US, Japan or China [in any of the mentioned countries] will also affect the Indian stock market. Investors now can take decision wisely about their international trading in stock market. As the stock markets are interlinked with Indian stock markets, this also means that decisions or changes or the factors affecting the Indian stock market will also affect the stock markets of US, Japan and China.

References