International Journal of Innovative Research and Development

Abstract

Predicting stock market behaviour has been quite an extensive research domain for many years for now. It makes the work simpler and easy to derive the pattern of a market movement if both are stochastically drifted in a similar direction. S&P BSE Sensex has been in existence since late 1970s, and developed as an Index in the early 1980s. In 1986, it developed the BSE [1]SENSEX index, giving the BSE a means to measure overall performance of the exchange. In 2000, the BSE used this index to open its derivatives market, trading S&P BSE SENSEX futures contracts.CNX Nifty or NSE 50 was incorporated in 1992 as a tax-paying company and was recognized as a stock exchange in 1993 under the Securities Contracts (Regulation) Act, 1956.[1]CNX NSEplatform offers trading, clearing and settlement services in equity, equity derivatives, and debt and currency derivatives segments. It is the first exchange in India to introduce the electronic trading facility. Conventional wisdom depicts that FII & DII move the markets, however,  research shows a different picture, similarly, this study is to reveal whether the common wisdom of Sensex and Nifty moving along in similar directions is correct or not. This study is also to identify the driver and driven Index patterns through waveform analysis. If the Indexes are closely cointegrated then the arbitrage opportunity will drastically come down increasing the efficiency in both the capital markets.

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Abstract

The Religious set of banking, especially Islamic Banking and Investment was nonexistent around 30 years back. But in 2006, Islamic financial institutions’ (IFIs) assets worldwide were estimated at more than $300 billion, with another $400 billion in financial investments, according to a study by accounting firm KPMG. Which is considerable and the growth momentum noticed by KPMG is also substantial.

According to the study conducted by Consulting firm McKinsey & Co the current growth rate of Islamic Banking & Investment is 15% annually and in coming 5 years this rate is going to be 20%.

Islamic finance is built on the premise that while “commerce had always been central to Islamic tradition, profits from pure finance [are] viewed with suspicion. Profits from commerce are fundamentally different from those generated by money-lending.”

Islam prohibits riba (“extra” or interest) and usury (excessive interest), because fixed, pre-determined interest-based lending casts an inherent risk of the lender exploiting the borrower. Islamic banking differs in the relationships between borrower and lender, favouring profit-and-loss sharing or partnership finance.

Most large western financial institutions have Islamic subsidiaries or at least Islamic products. In the US, a Dow Jones Islamic market index (DJIM) was launched in 1999 to benchmark Shariah-compliant portfolios, even employing a board of Shariah scholars.

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