Global Journal of Research in Management

Open Access Open Access  Restricted Access Subscription Access
Open Access Open Access Open Access  Restricted Access Restricted Access Subscription Access

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
     

   Subscribe/Renew Journal


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.
Subscription Login to verify subscription
User
Notifications
Font Size


  • Aggarwal, P., & Saqib, N. (2017). Impact of macro-economic variables of India and USA on Indian stock market. International Journal of Economics and Financial Issues, 7(4), 10-14.

  • Bose, S., & Mukherjee, P. (2006). A study of interlingages between the Indian stock market and some other emerging and developed markets. In Indian Institute of Capital Markets 9th Capital Markets Conference Paper.

  • Chellaswamy, K. P., Natchimuthu, N., & Faniband, M. (2021). Chinese and Indian Stock Markets: Linkages and Interdependencies. Research in World Economy, 1, 2(2), 2.

  • Chen, H., Lobo, B. J., & Wong, W. K. (2006). Links between the Indian, US and Chinese stock markets. National University of Singapore, Department of Economics, Working Paper, 602.

  • Chittedi, K. R. (2011). Integration of intenarional stock markets: with special refernce to India. Gandhi Institute of Technology and Management (GITAM), Journal of Management, 9(3).

  • Chougala, P., & Srivatsa, H. S. (2012). Analytical study of correlation between Indian and international stock market. Faculty of Management and Commerce, Ramaiah University of Applied Sciences, 27-30.

  • Dasgupta, R. (2014). Integration and dynamic linkages of the indian stock market with bric-an empirical study. Asian Economic and Financial Review, 4(6), 715-731.

  • Deo, M., & Prakash, P. A. (2017). A study on integration of stock markets: empirical evidence from national stock exchange and major global stock markets. ICTACT Journal on Management Studies, 3(2), 479-485.

  • Dhal, S. (2009). Global crisis and the integration of India's stock market. Journal of Economic Integration, 778-805.

  • Joshi, N. A., Mehta, D., Patel, B., & Patel, N. (2021). Causality and cointegration among stock market indices: A study of developed markets with sensex. International Journal of Accounting & Finance Review, 7(1), 31-52.

  • Kapoor, A., & Singh, H. K. (2013). Stock market co-integration: an investigation of South Asian Countries. ACADEMICIA: An International Multidisciplinary Research Journal, 3(10).

  • Mane (2018). Correlation between indian stock imndices of bse and amercian stock indice nasadq.

  • Mehta, K., & Sharma, R. (2013). Association in Emerging Asian Stock Markets: A Test of Co-Integration. In International Conference on Management and Information Systems September (Vol. 22, p. 24).

  • Mohanty, S. S., & Pathak, P. (2017). Interlinkages of Asian and US stock market: a study of selected indices. Asian Journal of Research in Banking and Finance, 7(10), 1-10.

  • Mukherjee, D., Nath, K., & Mishra, R. K. (2005). Stock market interlinkages: A study of Indian and world equity markets. Indian Journal of Commerce, 58(1).

  • Palamalai, S., & Devakumar, C. (2013). Stock market linkages in emerging Asia- Pacific markets. Sage Open, 3(4), 2158244013514060.

  • Panda, P. K. (2015). Stock market integration: Evidence from India and other major world stock markets. Available at SSRN 2699504.

  • Patel, S. A. (2013). Dynamic Linkages of Developed Equity Markets with Indian Stock Market. Vilakshan: The XIMB Journal of Management, 10(1).

  • Reham, Abro, Mustafa, Ullah, Khattak (2021). An analysis of stock market integration in the asian developed and emerging markets. In Humanities and Social Sciences Reviews, 9(3), 1175-1190.

  • Saha, M., & Bhunia, A. (2012). Financial market integration of South Asian countries. Developing Country Studies, 2(1), 45-52.

  • Samadder, S., & Bhunia, A. (2018). Integration between Indian stock market and developed stock markets. Journal of Commerce and Accounting Research, 7(1), 13.

  • Sharma, Bodla. Are the global markets interlinked: evidence from literature. 9(3), 1175-1190.

  • Siddiqui, S. (2009). Stock markets integration: Examining linkages between selected world markets. Vision, 13(1), 19-30.

  • Singh, G. S. P., & Singh, P. (2010). Chinese and Indian stock market linkages with developed stock markets. Asian Journal of Finance & Accounting, 2(2), E2.

  • Srikanth, P., & Aparna, K. (2012). Global stock market integration-a study of select world major stock markets. Researchers World, 3(1), 203.

  • Sriram, M. (2011). Co-integration of Nifty and NASDAQ Composite-An Empirical Investigation. In Proceedings of Third International Conference on Global Business, Economics, Finance and Social Sciences, Mumbai (pp. 1-11).

  • Subha, M. V., & Nambi, S. T. (2010). A study on cointegration between indian and american stock markets. Journal of contemporary research in management, 5(1), 105-113.

  • Subha, Nambi (2013). Investigating causal relationships between indian and american stock markets. Life Science Journal, 10(3), 97-101.

  • Subhani, M. I., Hasan, S. A., Mehar, D., & Osman, M. (2011). Are the major South Asian equity markets co-integrated?. International Journal of Humanities and Social Science, 1(12), 117-121.

  • Tripathi, V., & Sethi, S. (2010). Integration of Indian stock market with World stock markets. Asian Journal of Business and Accounting, 3(1), 117-134.


Abstract Views: 314

PDF Views: 0




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

Abstract Views: 314  |  PDF Views: 0

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