Roll No.

: 10

Name of the Student: tam kat

Area of Research: Finance

Executive Summary:

This report studies the impact of various factors on the stock returns. It tries to identify the
influence of various internal and external factors affecting the returns on stocks of banks in
India. And also the extent of impact of these factors .
From study of various articles and journals it has been derived that there is a relationship
between stock prices and various macro economic as well as financial factors. Several
researchers have attempted to establish the relationship between macro-economic variables
and stock market indices or stock price using various dynamic models. All though the study
of literature conclusively establishes that the capital markets indices are dependent on
macroeconomic variables and other factors , the same may not be statistically significant in
all the
Multiple regression model have been applied to find out the impact and extent of these
variables on the stock returns. In this study, 20 banks listed on BSE have been considered. It
has been found through the regression analysis is that the impact of economic and macroeconomic factors is not significant on the stock returns. Hence it can be concluded that stock
returns of Indian banks (listed on BSE) is not significantly related to internal and external
factors.

Key Words: Stock returns, Macro-economic variables, Inflation , GDP, Reserve ratio,
Dividend payout ratio and ROE.