Index of contents

S.NO. TABLE OF CONTENT

1. TOPIC OF RESEARCH PAPER

2. ABSTRACT
3. INTRODUCTION & HISTORY

4. OBJECTIVE’S OF RESEARCH WORK

5. METHODOLOGY

6. HYPOTHESI’S
7. REVIEW OF LITERATURE

8. COLLECTION OF DATA
9. GRAPHICAL REPRESENTATION

10. INTERPRETATION AND RESULT

11. PROBLEM’S AND SUGGESTION’S

12. CONCLUSION OF RESEARCH WORK

13. BIBLIOGRAPHY
 COLLECTION AND GRAPHICAL REPRESENTATION OF
DATA.
BELOW CHARTS SHOWING NIFTY AND SENSEX CANDLESTICK CHART
IN DIFFERENT TIME FRAME’S.
CHART -1 -NIFTY50

CHART-2-NIFTY50
CHART-3-SENSEX30

CHART-4-NIFTY50
 INTERPRETATION AND RESULT OF DATA COLLECTED
1. Chart-1 shows Nifty50 index of year 2016, on 8 th
November 2016 the government announced the
‘demonetisation’, a move involving the ban of currency
notes of RS 500 and RS 1000 denominations. The result
was that 86% of India’s currency was rendered
unusable overnight. The sudden ban lowered the
purchasing power of people and thus the Indian Stock
market suffered. By 22nd November 2016, 2 weeks after
demonetisation, NIFTY 50 had fallen 6.34%.
2. Chart-2 shows Nifty50 index of year 2019, on 20 th
September 2019, the Indian government announced
massive cuts in corporate tax rate to 22% from 30%
and 15% from 25% for new manufacturing companies.
Prime minister Narendra Modi expected the tax rate
cut to attract to attract private investment from across
the globe, improve the competitiveness of the private
sector and create more jobs. On the day the tax cuts
were announced, NIFTY 50 rose by 5.32%.
3. Chart-3 shows Sensex30 index of year 2019, on 23 rd
May 2019 results were announced for India’s 17 th Lok
Sabha, general elections. The Narendra modi- led NDA
was expected to win, and the market seems all geared
up to respond positively to a second term. The sensex
opened at 39,815 and once the results began pointing
an NDA victory, the markets shot up by 1000 points to
touch 40,000 for the first time. However, despite a
strong positive sentiment prevailing among investors,
profit booking drove the market down, falling 1300
points from the day’s high. Sensex closed 298 points
lower at 38,811.
4. Chart-4 shows Nifty50 index of year 2021, on 1 st feb
2021 as always government Budget, while presenting
the third consecutive budget, FM Nirmala Sitaraman
laid out government’s plan for economic recovery.
Dalal Street had given thumbs up to Budget 2021,
which was termed as growth-oriented and balanced by
market analysts. The NSE Nifty surged 647 points to
settle at 14,281 that is around 4.74%. This was the best
performance by the market on a Budget Day since
1999, when the index had gained 6.5%.

PROBLEMS
1.Governments should try to resolve issue of energy
crises because energy crises affect industrial production
and industrial production ultimately leads towards
better performance of stock market. Inflation has
shown negative relationship with stock prices.
2.Inflation has shown negative relationship with stock
prices. Increase in inflation raises the level of interest
rates in the economy. Interest rates do have negative
relationship with the stock market.
3. Increase in interest rates will raise the required rate
of return on the investments and ultimately it will
decrease the stock prices.
SUGGESTIONS
Further studies should be conducted to increase more
components in the construction of political instability
index like suicide attacks in the country, wars drone
attacks. This study has considered strikes,
assassinations, riots, demonstrations, government
longevity, government change and regime type as
factors for constructing the political instability index.
However, factors like drone attacks, suicide attacks are
important factor making the political situation unstable
and therefore, further research should be conducted by
taking enough data on these factors and to include
them in construction of political instability index.
Further, studies should be conducted by increasing the
sample period. Relationship of stock prices and political
instability was examined using four control variables
(Inflation, Industrial Production, Exchange Rate and
Exports) in this study. However, a more detailed
analysis could be conducted by including other control
variables like legal systems, foreign investments and
energy crises.
 CONCLUSION OF RESEARCH WORK

Political instability was measured by different factors

like strikes, assassinations, riots, demonstrations,
government longevity, government change. Political
stability reduces the uncertainty and urges investors to
put their funds in different investments. Political stable
governments will have an approach to facilitate the
investors. The main focus of this study was on the
relationship between stock prices and political
instability. Results showed negative relationship
between these two variables. Governments should try
to reduce the events which increase instability in
political situation. Results of this study showed the
positive relationship of industrial production with the
stock prices.
 BIBLIOGRAPHY
1. https://in.tradingview.com/
2. https://in.investing.com/
3. https://arqwealth.com/how-is-the-stock-
market-impacted-by-politics/
4. https://www.indiabudget.gov.in/
5. https://en.m.wikipedia.org/wiki/2021_Union_bu
dget_of_India
6. www.moneycontrol.com
7. https://www.zeebiz.com/personal-
finance/news-5-years-of-demonetization-here-
is-when-and-which-denomination-got-
demonetized-170009/amp
8. https://wealthdesk.in/blog/major-events-in-
indian-stock-market/
9. https://economictimes.indiatimes.com/
 STUDENT DECLARATION

I Saksham Gupta Student of Department of commerce, IPS

Academy, Indore of BCom-Hons 3rd year has prepared Major
research Project report on topic “Study on effects of political
instability in Stock Market”.

The Research as per my knowledge is original and genuine and

not published in any research Journal previously.

SAKSHAM GUPTA

BCom-Hons(3rdYEAR)

2020-23
 ACKNOWLEDGEMENT

I often wondered why the project reports always began with

acknowledgement. Now, when I have undertaken project
myself, did I realize that project report involves not just the
researcher but so many people that help in making the research
possible. Therefore, I take pleasure in beginning the most
beautiful part of the report.

I fall short of words to express my gratitude to my guide Dr.

YOGITA CHANDEL who despite their busy schedule were
able to find some time to guide me through trouble and solve my
problems to the best of abilities. Without their unfailing
guidance, encouragement and patience this project would not
have been possible. It has been a learning experience under
him/her.
I am thankful to my faculty guide Dr. YOGITA CHANDEL
who gave me detailed instructions during my MRP.
 CERTIFICATE

This is to certify that Mr. Saksham Gupta Student of

Department of commerce, IPS Academy, Indore of BCOM-
HONS has prepared Major research Project report on topic
“STUDY ON EFFECTS OF POLITICAL INSTABILITY
IN STOCK
MARKET” under guidance of Dr. Yogita Chandel.

Internal Examiner (Guide)

DR. Yogita Chandel

 MAJOR RESEARCH PROJECT
On

STUDY ON EFFECTS OF POLITICAL INSTABILITY

IN STOCK MARKET

Batch 2020-23

Guided by: Submitted by:

Dr. Yogita Chandel Saksham Gupta
BCom-Hons 3rd year

DEPARTMENT OF COMMERCE, IPS ACADEMY

Rajendra Nagar, A.B. Road, Indore – 452012 (MP)