OBJECTIVES OF THE STUDY:

PRIMARY OBJECTIVE

 To analyse the influence of fundamental factors on commodity

market .

SECONDARY OBJECTIVE

 To study the impact created by the fundamental factors on commodity

market for the past five years

 To predict the future of commodity market based on fundamental

factor.
SCOPE OF THE STUDY:

 To suggest the investors about the upcoming trend and future of

commodity market in india.

 To study the impact created by fundamental factors in the past year

 To forecast the future of derivatives in the Indian Stock Market.

NEED FOR THE STUDY:

 Commodity market is growing at rapid rate , commodity market

trading is touching three times better than equity market.

 commodity offer a good option for long term investors and

speculators.

 Demand for commodities in stock market is estimated to grow four

times than the current demand in the next five years.
LIMITATIONS OF THE STUDY:

 The analysis is purely based on the secondary data. So, any error in
the secondary data might also affect the study undertaken.

 Share market is so much volatile and it is difficult to forecast anything

about it.

 The domain of commodity market is wider,so it make us complicated

to study all the factors concerned
REVIEW OF LITERATURE:

A study on the commodity future market in India

Commodity markets are not as commonly believed,In many ways, they

operate just as public market places or auctions. But Once certain facts are
understood, one can see that commodity markets are an integral part of a
well-run economy.

- Robert L. Lerner

IBMR-Ahmedabad
REVIEW OF LITERATURE:
Development of commodity market in India

After almost two years that commodity trading is finding favour with Indian
investors and is been seen as a separate asset class with good growth
opportunities. For diversification of portfolio beyond shares, fixed deposits
and mutual funds, commodity trading offers a good option for long-term
investors and arbitrageurs and speculators. And, now, with daily global
volumes in commodity trading touching three times that of equities, trading
in commodities cannot be ignored by Indian investors.

-Pankaj kumar

AICR BUSINESS SCHOOL-MUMBAI

RESEARCH METHODOLOGY:
RESEARCH DESIGN

Analytical & Descriptive Research

DATA COLLECTION

Secondary data:

Research reports,Websites,Company factsheets and books.

STATISTICAL TOOL FOR ANALYSIS

 Correlation

 Multiple regression

 Simple tools like bar graphs, tabulation, line diagrams have

been used.
CORRELATION FORMULA
FACTORS AFFECTING COMMODITY MARKET:

 SENSEX

 ECONOMIC GROWTH

 GLOBAL ECONOMY

 INFLATION

 US ECONOMIY

 SPECULATION

 POLITICAL FACTOR

 INTEREST RATE

 RISK AND RETURN

SENSEX:

 sensex is the index of BSE

 What is an index?

An index is basically an indicator. It gives you a general idea

about whether most of the stocks have gone up or most of the stocks
have gone down.

 Sensex is the common name for the Bombay Stock Exchange Sensitive
Index

 Bombay stock exchange is known as the oldest stock exchange in asia.

 In 1956, the bse became the 1st stock exchange to be recognized by

the Indian govt under the security contract regulation act.

 The Bombay Stock Exchange developed the BSE Sensex in 1986,

giving the BSE a means to measure overall performance of the
exchange
 INFLATION:

 Defintion of the word inflation is increase in the price you pay for
goods.

 In other words, a decline in the purchasing power of your money".

 Price Inflation is when prices get higher or it takes more money to buy
the same item.

Calculating the Inflation Rate:

(F-i/i)*100

Example

inflation rate from 2003 to 2004 index value which is 137.

(137-133/133)*100

Inflation rate approxmately 3%

 GDP:

 The total market value of all final goods and services produced in a
country in a given year, equal to total consumer, investment and
government spending, plus the value of exports, minus the value of
imports. The GDP report is released at 8:30 am EST on the last day of
each quarter

How to calculate the GDP

The basic formula for calculating the GDP is:

Y=C+I+E+G

where

Y = GDP

C = Consumer Spending

I = Investment made by industry

E = Excess of Exports over Imports

G = Government Spending