Journal Article

Nifty Movements and Sec torial Reac tions: Evidence from the Indian Stock Market since Covid 19

N. Kubendran

2024

Overview

Purpose: This study examines the impact of the covid-19 pandemic on the Indian stock market from December 2019 to May 2022. The major objective of the study is to evaluate the reactions of major stock indices in response to the volatility index during the three waves of covid-19 and to project future movements for investments in the equity market. Design/methodology/approach: The study compares the responses of major sectors like Automobiles, Banking, Consumer durables, Financial Services, and overall nifty movements concerning to volatility index. For this purpose, the study first applied the Augmented Dickey-Fuller test to check stationarity conditions. The study also used the pairwise Granger Causality and Regression model for empirical analysis. Findings: The major findings of the study is that almost all the major sectoral stocks resumed to the pre-covid level with a steady state and volatility was not observed in the first wave of covid 19. During the second and third waves, the growth responses from the indices movements are moderate but volatility is observed, particularly high volatility was observed in the third wave due to uncertainties in the economy. Finally, the study concluded by stating that a higher level of the negative effect of covid-19 was observed in the Indian stock market during the first wave of covid-19. Later, the negative effect turns out to be positive in terms of returns, but a higher level of volatility persists. Research limitations/implications: The study also observed that the Indian stock market is not only responsive to the performance of the company, it is also responsive to several other factors like India’s border disputes with China and Pakistan, geopolitical unrest, and the rise in petroleum costs brought on by inflationary pressures. Originality/value: Weak forecasting is observed in the Indian equity market as a result of expectations of global instability. KCI Citation Count: 0

• Publisher: 사람과세계경영학회
• Subject: 경영학