are indian stock driven by pure sentiments

Are Indian Stock Markets Driven More By Sentiments Than By

Fundamentals ?

Alok Mishra,, Akash Jauhari , Karan Verma , Lokesh Chaudhary, Raghav Agarwal , Varun Sehgal

BY

Determinants of Our Research

Fundamentals

• EPS

• Future Cash- flows

• P/E

• Projects in Hand

Market Sentiments

Settlement Between The Ambani Brothers

On June 20, 2005, the news of the settlement between the Ambani brothers boosted investor sentiments and the scrips of RIL, Reliance Energy, Reliance Capital and IPCL made huge gains. This helped the Sensex crossed 7,000 points for the first time

ICICI Bankruptcy Reports

• ICICI Bank Share price went down by a whopping 14 percent  on 28th Sep, 2008

UPA Wins By Thumping Majority

• On May 18, 2009, the SENSEX surged 2110.79 points .This event created history in Dalal Street, by being the first ever time that trade had been suspended for an increase in value.

26/11 Terror Attack on Financial Capital

Share Market resilient on 28/12 as it rises by 2%

Research Design

• Field Study

• Longitudinal collection of Data ( 2004 – 2011)

• Secondary Source of Data-

BSE, Money Control/ CNBC

• Units: Individual Stock Prices.

RIL, ONGC, TCS, Infosys, L&T, ICICI, Future

Grp.

• Causal and Descriptive Study.

Research Objective

•

• To Quantitatively find the

impact of Sentiments on

Stock Markets as compared

to Fundamentals.

Impact News

Result and Conclusion

Change in Stock, observed

Change in BSE

Expected Change in Stock

Application – Kruskal Wallis

Methodology

Methodology

• % Change = (closing – opening) * 100 /opening.

• Theoretical % Change in Stock = (Beta) * (Sensex % Change).

• Comparing Theoretical Change and Actual Change.

• Analysis of Variance of the two samples.

• Non Parametric – Kruskal Wallis Test, a = 5 %