RESEARCH PROJECT REPORT

On

“Comparative Analysis of Indian Stock Market with

International Markets”
Towards partial fulfillment of
Master of Business Administration (MBA)
(BBD University, Lucknow)

Guided By: Submitted by:

Dr. Shweta Singh KERTIKA SINGH
Assistant Professor Roll No. 1210672127
(SOM, BBDU LUCKNOW) MBA 4th Semester

Session 2022-2023
School of Management
Babu Banarasi Das University
Sector I, Dr. Akhilesh Das Nagar, Faizabad Road, Lucknow (U.P.) India
PLAGIARISM CERTIFICATE
 DECLARATION

This is to declare that I, KERTIKA SINGH (University Roll No. 1210672127)

student of MBA, have personally worked on the project entitled “Comparative

Analysis of Indian Stock Market with International Markets”. The data

mentioned in this report were obtained during genuine work done and collected by

me. The data or information obtained from primary (first-hand sources) and any other

alternative sources are absolutely acknowledged. The result and analysis embodied

during this project has not been submitted to the other University or Institute for the

award of any degree.

KERTIKA SINGH
ROLL NO. 1210672127
MBA 4th Semester
BBD UNIVERSITY, LUCKNOW
 ACKNOWLEDGEMENT

First and foremost am indebted to the Almighty. It provides Pine Tree State immense

pleasure to position on record my feeling and reverence to my guide and supervising

faculty Dr. Shweta Singh from Babu Banarasi Das University, Lucknow for all the

timely help and support rendered. But for her constant motivation, encouragement and

adept guidance during the entire course of research, my endeavor would not have

culminated in fruition. The sincerity and dedication put in by her for the sake of my

Research Report is remarkable. I would like to thank her for the opportunity I was

given to conduct my Research and further my Research Report under his guidance. I

am grateful to Prof. (Dr.) Sushil Pande, the Dean/Incharge -SOM of Babu Banarasi

Das University, Lucknow for sparing his valuable time for me on different

occasions. I really appreciate all the bank employees who provided the requisite data

for my research work. It was their cooperation and input that made this research

possible. I express my gratitude to all the library staff of Babu Banarasi Das

University, Lucknow. Close to my heart is the support of my dear Colleagues, family

and friends. They were always there for me with their wise counsel and sympathetic

ear. I could not have done any of this without you all. Thank you once again.

KERTIKA SINGH
ROLL NO. 1210672127
MBA 4th Semester
BBD UNIVERSITY, LUCKNOW
                                                           
 PREFACE

It was a privilege for me to work in a reputed organization. This has given us an

opportunity to work in a truly professional environment where team work score over

individual effort, where there is a helpful atmosphere. A well planned, properly

executed and evaluated training helps a lot in inoculating good work culture. The

project on “Comparative Analysis of Indian Stock Market with International

Markets” has been made to facilitate effective understanding about the marketing

aspects. The project research has provided me an opportunity to gain practical

experience, which has helped me to increase my sphere of knowledge to a greater

extent. I have tried to summarize all our experience and knowledge acquired up till

now, in this report. This project is a keen effort to obtain the expected results and

fulfill all the information required. At the end annexure and bibliography are given for

effective understanding
 EXECUTIVE SUMMARY

This project report is prepared as the partial fulfillment of two year degree programme

of MBA curriculum of Babu Banarasi Das University, Lucknow. This Research

project is a compulsory part of the academics. This research is done in the fourth

semester of the MBA program.

Today employees expect quality of work life, more than financial benefits from the

organization. With the advent of new technologies, factors related to mental health in

Tata Motors Limited are taken into consideration more than ever. Studies have

revealed that one of the factors affecting the productivity of employees in an

organization is quality of work life. Another influential factor is job satisfaction which

is important in the improvement of work environment conditions and organizational

efficiency. Quality of work life is an experience which an employee feels about the

job and work place in organization. The purpose of this paper is to identify the

relationship between two variables like, quality of work life and job satisfaction. The

study is an attempt to explore the better understanding of quality of work life and

employee job satisfaction in Tata Motors Limited. Findings of the study will help the

management and employees of Tata Motors Limited to understand the level of quality

of work life of Tata Motors Limited employees.

The project is followed by 8 Chapters.

Chapter 1: Definition & concept of Employees Satisfaction and Quality of Work

Life at Tata Motors Limited

Chapter 2: Literature Review and Company Profile

Chapter 3: Research methodology, objective of research.

Chapter 4: Analysis & interpretation of collect data’s.

Chapter 5: Findings
Chapter 6: Suggestions & conclusions

Chapter 7: References

Chapter 8: Annexure

This report is an honest work towards the topic. There can be many short comings in

it because of the lack of the time, unavailability of data and other constraints.
 TABLE OF CONTENT

S. No Particular Page No.

1 Bona-fide Certificate of Dean -School of Management i

2 Plagiarism Certificate ii

3 Declaration iii

4 Acknowledgment iv

5 Executive Summary v

6 Introduction 1

7 Company Profile 12

8 Literature Review 27

9 Objective of the Study 37

10 Research Methodology 39

11 Data Analysis and Interpretation 43

12 Findings 64

13 Limitations of The Study 66

14 Suggestions and Recommendations 68

15 Conclusion 70

16 Bibliography 73

17 Annexure 76
CHAPTER - I
INTRODUCTION

1
 Chapter – I
INTRODUCTION

INTRODUCTION

The Indian stock exchanges hold a place of prominence not only in Asia but also at

the global stage. The Bombay Stock Exchange (BSE) is one of the oldest exchanges

across the world, while the National Stock Exchange (NSE) is among the best in

terms of sophistication and advancement of technology. The Indian stock market

scene really picked up after the opening up of the economy in the early nineties. The

whole of nineties were used to experiment and fine tune an efficient and effective

system. The ‘badla’ system was stopped to control unnecessary volatility while the

derivatives segment started as late as 2000. The corporate governance rules were

gradually put in place which initiated the process of bringing the listed companies at a

uniform level. On the global scale, the economic environment started taking paradigm

shift with the ‘dot com bubble burst’, 9/11, and soaring oil prices. The slowdown in

the US economy and interest rate tightening made the equation more complex.

However after 2000 riding on a robust growth and a maturing economy and relaxed

regulations, outside investors- institutional and others got more scope to operate. This

opening up of the system led to increased integration with heightened cross-border

flow of capital, with India emerging as an investment ‘hot spot’ resulting in our stock

exchanges being impacted by global cues like never before. The study pertains to

comparative analysis of the Indian Stock Market with respect to various international

counterparts. Exchanges are now crossing national boundaries to extend their service

areas and this has led to cross-border integration. Also, exchanges have begun to offer

2
cross-border trading to facilitate overseas investment options for investors. This not

only increased the appeal of the exchange for investors but also attracts more volume.

Exchanges regularly solicit companies outside their home territory and encourage

them to list on their exchange and global competition has put pressure on corporations

to seek capital outside their home country. The Indian stock market is the world third

largest stock market on the basis of investor base and has a collective pool of about 20

million investors. There are over 9,000 companies listed on the stock exchanges of the

country. The Bombay Stock Exchange, established in 1875, is the oldest in Asia.

National Stock Exchange, a more recent establishment which came into existence in

1992, is the largest and most advanced stock market in India is also the third biggest

stock exchange in Asia in terms of transactions. It is among the 5 biggest stock

exchanges in the world in terms of transactions volume. The origin of the New York

Stock Exchange (NYSE) is dated back to May 17, 1792, when the Buttonwood

Agreement was signed by twenty-four stock brokers outside of 68 Wall Street in New

York under a buttonwood tree. Also called the “Big Board”, it is the largest stock

exchange in the world in terms of dollar volume and second largest in terms of

number of companies listed. The Tokyo stock exchange was established on May 15,

1878 and trading began on June 1, 1878. In 1943, the exchange was combined with

ten other stock exchanges in major Japanese cities to form a single Japanese Stock

Exchange. It is the second largest stock exchange market in terms of monetary

volume and currently has 2302 listed companies. The Hong Kong stock exchange is

the 8th largest stock exchange in the world in terms of Market capitalization. The

Hang Sang Index (HIS), was started on November 24, 1969. The Russian stock

exchange was established in 1995 by consolidating the separate regional stock

exchanges into one uniformly regulated trading floor. The Korea stock exchange was

3
created by the integration of the three existing of the Korean Spots and Futures

exchanges (Korean stock exchange, Korean futures exchange & KOSDAQ) under the

Korea Stock and Futures Exchange Act.3.5. In this paper, the names of the countries

and the names of the indices of those countries have been used interchangeably. Thus,

the names of the countries represent the indices for the purpose of analysis and they

need to be interpreted that way. Again, all the analyses have been done with the

closing prices. The following table gives the country and the exchange with the name

of its indices.

Country Stock exchange name Indices name

India National Stock Exchange S & P Nifty

India Bombay Stock Exchange Sensex

Hong Kong Hong Kong Stock Exchange Hang Seng

USA New York Stock Exchange NYSE

Korea Korean Stock Exchange KRX 100

Russian Russian Stock Exchange RTS Index

PAST STUDIES

Poshakwale, Sunil (2002) examined the random walk hypothesis in the emerging

Indian stock market by testing for the nonlinear dependence using a large

disaggregated daily data from the Indian stock market. The sample used was 38

actively traded stocks in the BSE National Index. He found that the daily returns from

the Indian market do not conform to a random walk. Daily returns from most

individual stocks and the equally weighted portfolio exhibit significant non-linear

dependence. This is largely consistent with previous research that has shown evidence

of non-linear dependence in returns from the stock market indexes and individual

stocks in the US and the UK. Noor, Azuddin Yakob, Diana Beal and Delpachitra,

4
Sarath (2006) studied the stock market seasonality in terms of day-of-the-week,

month-of-theyear, monthly and holiday effects in ten Asian stock markets, namely,

Australia, China, Hong Kong, Japan, India, Indonesia, Malaysia, Singapore, South

Korea and Taiwan. He concluded that the existence of seasonality in stock markets

and also suggested that this is a global phenomenon.

LINKAGE PATTERNS:

Masih, M.M. Abul and Masih, Rumi (1997) examined the dynamic linkage patterns

among national stock exchange prices of four Asian newly industrializing countries -

Taiwan, South Korea, Singapore and Hong Kong. The sample used comprised end-of-

the-month closing share price indices of the four NIC stock markets from January

1982 to June 1994. They concluded that the study of these markets are not mutually

exclusive of each other and significant shortrun linkages appear to run among them.

Lau, S T and Diltz, J.D. (1994) studied the transfer of information among Tokyo and

New York stock exchanges. Agarwal, R N (2000) examined the financial integration

of capital markets in developing nations gave insight with regards to the methodology

and the area of study followed. In a similar study by Bae, K, Cha, B, and Cheung, Y

(1999) the researchers tried to show the information transmission mechanism that

operates for stocks which are dually listed. This has helped in understanding the

channel of transmission of information that makes the exchanges dependant on each

other.

PROBLEM

Presently, the fluctuations in the Indian market are attributed heavily to cross border

capital flows in the form of FDI, FII and to reaction of Indian market to global market

cues. In this context, understanding the relationship and influence of various

exchanges on each other is very important. This study that compares global exchanges

5
which are from different geopolitico-socio-economic areas. With the cross border

movements of capital like never before in the form of FDI and FII, coupled with the

easing of restrictions bringing various stock exchanges at par in terms of system and

regulations, it can be assumed reasonably that a particular stock exchange will have

some impact on other exchanges.

MARKET CAPITALIZATION

Market capitalization is the measure of corporate size of a country. It shows the

current stock price multiplied by the number of outstanding shares. It is commonly

referred to as Market cap. It is calculated by multiplying the number of common

shares with the current price of those shares. This term is often confused with

capitalization, which is the total amount of funds used to finance a firm's balance

sheet and is calculated as market capitalization plus debt (book or market value) plus

preferred stock. While there are no strong definitions for market cap categorizations, a

few terms are frequently used to group companies based on its capitalization. The

table below shows the market capitalization of various stock markets in the world.

LISTED SECURITIES

Listing in a stock exchange refers to the admission of the securities of the company

for trade dealings in a recognized stock exchange. The securities may be of any public

limited company, Central or State Government, quasi-governmental and other

financial institutions/corporations, municipalities, etc. Securities of any company are

listed in a stock exchange to provide liquidity to the securities, to mobilize savings

and to protect the interests of the investors. India has the highest number of

companies listed in the stock market. Out of this, about 75 % of the companies are

listed with the Bombay Stock Exchange. After India, United States has the highest

number of companies listed.

6
CIRCUIT FILTERS

Stock Markets have the dubious reputation of crashing without a warning taking with

the savings of numerous investors. A stock market crash is a sudden dramatic decline

of stock prices across a significant cross-section of a market. Crashes are driven by

panic as much as by underlying economic factors. They often follow speculative stock

market bubbles such as the dot-com bubble. The study is restricted to the performance

of the Indian Stock market, Japan, Hong Kong, Korean, Russian and the New York

Stock exchanges. Hence we will be concentrating on the Asian Financial Crisis, Dot-

Com Bubble, and the Russian Financial Crisis etc. As a counter measure to the

instability of the stock market, various measures were introduced by to avoid huge

losses. One such solution is circuit breakers. Circuit Breakers are “a point at which a

stock market will stop trading for a period of time in response to substantial drops in

value.”(11) They are also referred to as trading curb is certain stock markets like

DJIA and NYSE. This was first introduced after Black Monday. Black Monday is the

name given to Monday, October 19, 1987, when the Dow Jones Industrial Average

(DJIA) fell 22.6%.(12). This was done with an aim to avert panic in the market and to

avoid panic selling. The Circuit Filters operate according to the rules and

requirements of the stock Market in question.

7
PRICE RELATIONSHIP

Correlation is a numerical summary measure that indicates the strength of

relationships between the pairs of variables. A correlation is very useful but it has its

limitations. That is, it can only measure the strength of a linear relationship. The

numerator of the above formula is also a measure of association between two

variables X and Y which is called the covariance between X and Y. Similar to

correlation, a covariance is a single number that measures the strength of the linear

relationship between the two variables. It is by looking at the sign of the correlation or

the covariance, i.e. positive or negative, that we can tell whether the two variables are

positively or negatively related. Therefore the correlation is better because, unlike the

covariance, the correlations are not affected by the units in which the variables are

measured. All the correlations are between +1 and -1, inclusive. The sign determines

whether the relationship is positive or negative. The strength of the relationship is

measured by the absolute value or the magnitude of the correlation. The closer it is to

+1 the stronger the relationship is and the closer to zero indicates that there is

practically no linear relationship. At the extreme a correlation equal to1 -1 or +1

occurs only when the linear relationship is perfect. In this part the price data of the

various exchanges are collected and subjected to a correlation test in order to find out

the influence that they have on each other. In other words, an effort has been made to

gain insight into how far the price movements of the exchanges are related with one

another.

8
BSE- BOMBAY STOCK EXCHANGE

Established in 1875, BSE Ltd. (formerly known as Bombay Stock Exchange Ltd.),

isAsia’s first Stock Exchange and one of India’s leading exchange groups. Over the

past137 years, BSE has facilitated the growth of the Indian corporate sector by

providing it anefficient capital-raising platform. BSE’s popular equity index – the

S&P BSE SENSEX –is India’s most widely tracked stock market benchmark

index. More than 5000companies are listed on BSE making it world’s No. 1

exchange in terms of listedmembers. The companies listed on BSE Ltd command a

total market capitalization ofUSD 1.32 Trillion as of January 2013. It is also one of

the world’s leading exchanges (3rdlargest in December 2012) for Index options

trading (source: world federation ofexchange). BSE also provides a host of

other services to capital market participantsincluding risk management, clearing,

settlement, market data services and education. Ithas a global reach with customers

around the world and a nation-wide presence. BSEsystems and processes are designed

to safeguard market integrity, drive the growth of theIndian capital market and

stimulate innovation and competition across all marketsegments. BSE is the first

exchange in India and second in the world to obtain an ISO9001:2000

certification.The Bombay Stock Exchange is the oldest exchange in India. It traces its

history to 1855,when four Gujarati and one Parsi stockbroker would gather under

banyan trees in front ofMumbai’s Town Hall. The location of these meetings

changed many times, as thenumber of brokers constantly increased. The group

eventually moved to Dalal Street in1874 and in 1875 became an official organization

known as ‘The Native Share & StockBrokers Association’. In 1958, the BSE became

the first stock exchange to be recognizedby the Indian Government under the

Securities Contracts Regulation Act. In 1980 theexchange moved to the Phiroze

9
Jeejeebhoy Towers at Dalal Street, Fort area. In 1986 itdeveloped the BSE SENSEX

index, giving the BSE a means to measure overall Performance of the exchange. In

2000 the BSE used this index to open its derivativesmarket, trading SENSEX futures

contracts. The development of SENSEX options alongwith equity derivatives

followed in 2001 and 2002, expanding the BSE’s tradingplatform. Historically

an open outcry floor trading exchange, the Bombay StockExchange

switched to an electronic trading system in 1995. It took the exchange onlyfifty days

to make this transition. This automated, screen-based trading platform calledBSE On-

line trading (BOLT) had a capacity of 8 million orders per day.

NSE – NATIONAL STOCK EXCHANGE

The National Stock Exchange (NSE) is the leading stock exchange in India

and thefourth largest in the world by equity trading volume in 2015, according

to WorldFederation of Exchanges (WFE).It began operations in 1994 and is ranked

as the largeststock exchange in India in terms of total and average daily turnover for

equity sharesevery year since 1995, based on annual reports of SEBI.NSE launched

electronic screen-based trading in 1994, derivatives trading (in the form ofindex

futures) and internet trading in 2000, which were each the first of its kind in

India.NSE has a fully-integrated business model comprising our exchange listings,

tradingservices, clearing and settlement services, indices, market data feeds,

technologysolutions and financial education offerings. NSE also oversees compliance

by trading andclearing members and listed companies with the rules and regulations

of the exchange.NSE is a pioneer in technology and ensures the reliability and

performance of its systemsthrough a culture of innovation and investment in

technology. NSE believes that the scaleand breadth of its products and services,

sustained leadership positions across multipleasset classes in India and globally

10
enable it to be highly reactive to market demands andchanges and deliver innovation

in both trading and non-trading businesses to providehigh-quality data and services to

market participants and clients.Mr. Ashok Chawla is the Chairman of the Board of

Directors of NSE and Mr. VikramLimaye is the Managing Director and CEO of NSE.

HONG KONG STOCK EXCHANGE

Hang Seng Indices Company Limited (Hang Seng Index), a wholly –owned

subsidiary ofHang Seng Bank, was established in 1984 and is Hong Kong’s leading

index compilercovering Hong Kong and mainland China markets. Hang Seng Index’s

calculates andmanages the Hang Seng Family of Indexes. Starting in 1969 with

the creation of theHang Seng Index, now widely recognized as the barometer of

the Hong Kong stockmarket, Hang Seng Index has been at the forefront of the market,

developing numerousmarket measures to help investors make their investment

decisions. Indexes in the HangSeng Family of Indexes are grouped into five

categories – Flagship Indexes, BenchmarkIndexes, Thematic Indexes, Strategy

Indexes and Bond Indexes – then classified asHong Kong-listed, Cross-market or

Mainland-listed according to where theirconstituents are listed. Currently, the Hang

Seng Family of Indexes comprises over 300real-time and daily indexes. Going

forward, Hang Seng Indexes will continue tobroaden its index series to meet the

widening spectrum of investor demand for indexinvestment solutions.The Hong Kong

stock exchange is the 8th largest stock exchange in the world in terms ofMarket

capitalization. The Hang Sang Index (HIS), was started on November 24, 1969.The

Russian stock exchange was established in 1995 by consolidating the

separateregional stock exchanges into one uniformly regulated trading floor.

11
The trading day consists of.

 Pre-opening auction session from 9:00 am to 9:30 am. The opening price of

asecurity is reported shortly after 9:20 am.

 A morning continuous trading session from 09:30 am to 12:00 pm

 An extended morning session from 12:00 noon to 1:00 pm, also referred to as

thelunch break. Continuous trading proceeds in specifically-designated

securities(currently two ETFs, 4362 and 4363). Trading in other securities is not

possible.However, previously-placed orders in any securities can be cancelled

from 1:00pm onwards

 An afternoon continuous trading session from 1:00 pm to 4:00 pm.

The history of the securities exchange began formally in the late 19th century with

thefirst establishment in 1891, though informal securities exchanges are known to

have beenin existence since 1861. The exchange has predominantly been the main

exchange forHong Kong despite co-existing with other exchanges at different points

in time. After aseries of complex mergers and acquisitions, in the twenty first century,

HKSE remainsthe core. From 1947 to 1969 the exchange 7monopolized the Hong

Kong market.

12
NEW YORK STOCK EXCHANGE- NYSE

The origin of the New York Stock Exchange (NYSE) is dated back to May 17,

1792,when the Buttonwood Agreement was signed by twenty-four stock brokers

outside of 68Wall Street in New York under a buttonwood tree. Also called the “Big

Board”, it is the largest stock exchange in the world in terms of dollar volume and

second largest in terms of number of companies listed. The New York Stock

Exchange (NYSE), sometimes known as the “Big Board” is a stock exchange located

at 11 Wall Street, Lower Manhattan, New York City, New York, United States. It is

by far the world’s largest stock exchange by market capitalization of its listed

companies at US$16.613 trillion as of May 2013. Average daily trading value was

approximately US$153 billion in 2008.The NYSE trading floor is located at 11 Wall

Street and is composed of four rooms used for the facilitation of trading. A fifth

trading room, located at 30 Broad Street, was closed in February 2007. The main

building, located at 18 Broad Street, between the corners of Wall Street and Exchange

Place, was designated a National Historic Landmark in 1978, as was the 11 Wall

Street building. The NYSE is operated by NYSE Euronext (NYSE: NYX), which

was formed by the NYSE’s 2007 merger with the fully electronic stock exchange

Euro next. In December2012, it was announced that the company would be sold to

Intercontinental Exchange(ICE), a futures exchange headquartered in Atlanta,

Georgia, The United States, for $8 Billion, a figure that is significantly less than

the $11 billion bid for the company tendered in 2011.

13
TOKYO STOCK EXCHANGE

The TSE is incorporated as a kabushiki gaisha with nine directors, four auditors and

eight executive officers. Its headquarters are located at 2-1 Nihonbashi-

Kabutochō Chūō, Tokyo, or “Kabuto-chō”, which is the largest financial district in

Japan. Its operating hours are from 8:00 to 11:30 a.m., and from 12:30 to 5:00 p.m.

From April 24, 2006, the afternoon trading session started at its usual time of 12:30

p.m. Stocks listed on the TSE are separated into the First Section for large

companies, the Second Section for mid-sized companies, and the Mothers

(Market of the high-growth and emerging stocks) section for high-growth startup

companies. As of October31, 2010, there are 1,675 First Section companies, 437

Second Section companies and182 Mothers companies. The main indices tracking

the TSE are the Nikkei 225 index of companies selected by the Nihon

Keizai Shimbun (Japan’s largest business newspaper), the TOPIX index based on the

share prices of First Section companies, and the J30 index of large industrial

companies maintained by Japan’s major broadsheet newspapers.

Ninety-four domestic and 10 foreign securities companies participate in TSE

trading. Other TSE-related institutions include:

 The exchange’s press club, called the Kabuto Club which meets on the third floor

ofthe TSE building. Most Kabuto Club members are affiliated with the Nihon

KeizaiShimbun, Kyodo News , Jiji Press , or business television

broadcasters suchas Bloomberg LP and CNBC. The Kabuto Club is generally

busiest during April andMay, when public companies release their annual

accounts.

On 15 June 2007, the TSE paid $303 million to acquire a 4.99% stake in

SingaporeExchange Ltd.

14
KOREA STOCK EXCHANGE

It was created by the integration of the three existing of the Korean Spots and Future

sex changes (Korean stock exchange, Korean futures exchange & KOSDAQ) under

the Korea Stock and Futures Exchange Act.3.5.The Korea Exchange was created

through the integration of Korea Stock Exchange, Korea Futures Exchange and

KOSDAQ Stock Market under the Korea Stock & Futures Exchange Act. The

securities and derivatives markets of former exchanges are now business

divisions of Korea Exchange: the Stock Market Division, KOSDAQ Market Division

and Derivatives Market Division. As of January 2015, Korea Exchange had2,030

listed companies with a combined market capitalization of $1.2 trillion. Sustainable

Stock Exchanges the exchange has normal trading sessions from 09:00 am to 03:30

pm on all days of the week except Saturdays, Sundays and holidays declared

by the Exchange in advance. On 22 May 2015, The Korea Exchange joined the

United Nations Sustainable Stock Exchanges initiative in an event with the UN-SG

Ban Ki-moon in attendance, as well as senior officials from UN Global Compact

and UNCTAD. The names of the countries and the names of the indices of those

countries have been used interchangeably. Thus, the names of the countries

represent the indices for the purpose of analysis and they need to be interpreted

that way. Again, all the analyses have been done with the closing prices. The

following table gives the country and the exchange with the name of its indices.

15
16
CHAPTER - II
COMPANY
PROFILE

17
 Chapter – 2

COMPANY PROFILE

COMPANY PROFILE

18
CHAPTER - III
LITERATURE
REVIEW

19
 Chapter – 3

LITERATURE REVIEW

LITERATURE REVIEW

This chapter deals about review of various studies related to comparison of

differentstock market studies. The research gap of this study was found out by

conducting adetailed literature review of studies in different countries during the

recent years.

DEBJBAN MUKHARJEE, T.A. PAI MANAGEMENT INSTITUTE

MANIPAL INDIA.

He found that the popular belief that the markets in general and Indian market

inparticular is more integrated with other global exchanges from 2002-03 onwards.

Thiscan very well be seen since the South Asian crisis of the mid- late nineties barely

affectedus particularly because we were insulated due to government policies

and was justmaking the transition. However, in the later time periods, the influence

of other stockmarkets increased on our BSE or NSE, but at a very low almost

insignificant level.

DR. VIJAY AGARWAL, ASSOCIATE PROFESSOR, BIT MESRA

They found that the correlation of stock returns of India with five other Asian

countries.There exists a very weak correlation between the Indian markets and

Hong Kong,Indonesia, Malaysia and Japan. Comparatively higher correlation was

found between theIndian and the Korean markets, which seemed to have weakened in

the short run. Henceit can be said that the Indian markets offer diversification

benefits to internationalinvestors looking for investment in the Asia Pacific

20
region. . Indian markets alsodelivered the highest compounded annual growth rate

in stock market returns, both in theshort as well as long run.

Poshakwale, Sunil examined the random walk hypothesis in the emerging Indian

stockmarket by testing for the nonlinear dependence using a large disaggregated daily

datafrom the Indian stock market. The sample used was 38 actively traded stocks in

the BSENational Index. He found that the daily returns from the Indian market do not

conform toa random walk. Daily returns from most individual stocks and the

equally weightedportfolio exhibit significant non-linear dependence. This is largely

consistent with Previous research that has shown evidence of non-linear dependence

in returns from thestock market indexes and individual stocks in the US and the UK.

Noor, Azuddin Yakob,Diana Beal and Delpachitra,

Sarath studied the stock

market seasonality in
terms of day-of-the-
week, month-of-the
year, monthly and
holiday effects in ten
Asian stock markets,
namely, Australia, China,
21
Hong Kong, Japan, India,
Indonesia, Malaysia,
Singapore, South Korea
and Taiwan. He
concluded that the
existence of seasonality
in stock markets and also
suggested that this is
a global phenomenon.
Sarath studied the stock market seasonality in terms of day-of-the-week, month-of-

theyear, monthly and holiday effects in ten Asian stock markets, namely, Australia,

China,Hong Kong, Japan, India, Indonesia, Malaysia, Singapore, South Korea and

Taiwan. Heconcluded that the existence of seasonality in stock markets and also

suggested that this isa global phenomenon.

Pandey and Kumar found co movement of Indian markets with eight other key

stockexchanges in Asia for the period from 2000 to 2008.They found that the period

wasmarked with high volatility among all markets under study.

Raju and Ghosh found that skewness and kurtosis is less in Indian market stock

returnsas compared to other countries. They also said that there was a need for a

22
study onvolatility in Indian stock markets after 2000 to see whether changes in

marketmicrostructure have resulted in changes in volatility pattern and facilitating

internationalcomparison of volatility.

Hiard (1997) and

Asimakopoulos
investigated the
interrelationship
between daily
returns generated by
major stock exchanges.
Evidence found that
strong interdependence
exists between the daily
returns generated by
United States and other
selected major
23
world indices.
Hiard (1997) and Asimakopoulos investigated the interrelationship between

dailyreturns generated by major stock exchanges. Evidence found that strong

interdependenceexists between the daily returns generated by United States and

other selected majorworld indices.

Cohen, Ness, Okuda, Schwartz and Whitcomb worked on The Determinants

ofCommon Stock Returns Volatility: An International Comparison” They studied the

issueof thinness is of interest for a number of reasons. They found that the most

obvious rechanges in the fundamental determinants of share price and of a firms

business andfinancial risk. They attempted to account for this by distinguishing

between randomtraders included demand shifts and demand shifts induced by the

receipt of new andgenerally available information concerning a stock’s value. They

also studied the Differences in trading arrangements might explain some of the

volatility differencesespecially internationally.

Varma Venkiteswaran explored the relationship of the Indian stock markets as

reflectedby the Bombay Stock Exchange Index, vis-a-vis other prominent

international stockmarkets. Twenty three international stock indices are used over the

period 1983-87. Heconcluded that there was practically no meaningful relationship

between the BSE indexand other international stock market indices, though the British

and South Korean indicesare inversely related to BSE.

Mayya made an overview of the Indian capital market. He examined various aspects

ofIndian Capital Market. The study emphasized the need for modernization

andcomputerization for providing liquid and efficient market. His study reveals that

24
thoughIndian stock market has attained a remarkable degree of growth in last one

decade, buthas still to go a long way.

Venkateshwar explored the relationships of the Indian stock markets as reflected by

theBombay Stock Exchange Index, vis-a-vis other prominent international stock

markets. 23international Stock indices are used over the period.

Raghunathan and Varma point out that any comparison of the Indian stock market

withthat elsewhere must be carried out on a common currency base. They find that in

dollarterms, the SENSEX return over the 1960-92 period is only about 0.5%, while

during thesame period the returns in the U.S. (based on the S & P Index) and the

Japanese (basedon the NIKEI index) are 6.1% and 11.4% per year respectively. Over

the twelve yearperiod 1980-92, the dollar returns for SENSEX, S & P and NIKEI

indices turn out to be6.5%, 10.65% and 13.6% respectively. For a shorter span of

seven years, namely 1985-92, the returns for the three indices turn out to be quite

comparable at 15%, 13% and 14%respectively.

Gupta in his book concluded that an Indian stock market is highly speculative.

Indianinvestors are dissatisfied with the service provided to them by the brokers.

Margins leviedby the stock exchanges are inadequate and liquidity in a large number

of stocks in Indianmarkets is very low. While evidently a careful work, the conclusion

except about margin System by the stock exchanges are adequate and other two

options built on wrong orquestionable arguments. Concluded that, a) Indian stock

market is highly speculative; b)Indian investors are dissatisfied with the service

provided to them by the brokers; c)margins levied by the stock exchanges are

inadequate and d) liquidity in a large numberof stocks in the Indian markets is very

low. While evidently a painstaking work, theconclusions except ‘c’ above seem to be

built on wrong or questionable arguments.

25
26
Chaplin sky and Hansen suggest that the indifferent stock market reaction is partly

onaccount of market expectation of debt issues. They find significant negative stock

pricereaction to debt issue announcement after controlling for market expectations.

However,the fall in price in case of debt issue announcements has been found to be

lower than thatof fall in the case of stock issue offerings.

McLaughlin, Safieddine and Vasudevan analyze the operating performance

ofseasoned equity offerings of a large sample of 1,296 firms listed on the New York

StockExchange (NYSE), American Stock Exchange (AMEX), and NASDAQ

that raisedcapital through subsequent offerings during the period 1980 - 1991. They

also analyzedthe determinants of subsequent performance and the factors influencing

the decision toissue equity. The study revealed that the SEO firms had a

significant increase inoperating performance prior to the issue and that they register

a considerable decline inprofitability in post-offering period. This research is the

examination of the long-runoperating performance of a large sample of straight-

debt issuing firms, whichcomplements previous large-sample studies of firms

making seasoned equity offerings(SEOs). Moreover they compared the information

effects for debt and equity issuers aftercontrolling for other factors associated with

changes in issuer operating performance.

Masih and Masih examined the dynamic linkage patterns among national

stockexchange prices of four Asian newly industrializing countries - Taiwan, South

Korea,Singapore and Hong Kong. The sample used comprised end-of-the month

closing shareprice indices of the four NIC stock markets from January 1982 to

June 1994. Theyconcluded that the study of these markets is not mutually exclusive of

each other andsignificant short run linkages appear to run among them. The

patterns of dynamiclinkages are examined among national stock prices of four Asian

27
Newly Industrializing Countries stock markets - Taiwan, South Korea, Singapore and

Hong Kong - in modelsincorporating the established markets of Japan, USA, UK and

Germany had been studied.

Shamsuddin and Kim researched on Integration and interdependence of stock

andforeign exchange markets: an Australian perspective. They studied the integration

of theAustralian stock market with its two leading trading partners, the US and

Japan. Ininvestigating the extent of integration, the study considered the

interdependence betweenforeign exchange rates and stock prices, since exchange

rates influence internationalcompetitiveness of firms, and, via interest rates, the cost

of capital. The results indicatedthat there was a stable long-run relationship among

the Australian, US and Japanesemarkets prior to the Asian crisis but that this

relationship disappeared in the post-Asiancrisis period.

Yakob, Beal and Delpachitra examined seasonal effects in ten Asian

Pacific stockmarkets, including the Indian stock market, for the period January 2000

to March 2005.They state that this is a period of stability and is therefore ideal for

examining seasonalityas it was not influenced by the Asian financial crisis of the late

nineties. Yakob, et al.,concluded that the Indian stock market exhibited a month-

of-the-year effect in thatstatistically significant negative returns were found in

March and April whereasstatistically significant positive returns were found in May,

November and December.

Somaiya researched on Scientific Management of Small Investors Protection in the

NewMillennium with Reference to India; Challenges and Opportunities (1991-2011).

He hasdone a tremendous work in the field of Indian stock exchanges. This doctoral

thesis isdivided into two volumes. He included the study of history of stock

exchanges,fluctuations in stock market, investors’ risk and protection means,

28
investors’ complaintsand their solutions, stock market scams, role of banks,

regulatory frame work and muchmore. Ex-prime minister of India Atal Bihari

Bajpai and Prime Minister ManmohanSingh have appreciated this work.

29
CHAPTER - IV
OBJECTIVES OF
THE STUDY

30
 Chapter – 4

OBJECTIVES OF THE STUDY

OBJECTIVES OF THE STUDY

 To understand functions of stock exchanges.

 To compare & contrast of Indian stock exchange with selected International

stockexchanges with respect to market capitalization and number of listed

securities.

 To compare listing agreement & circuit filters applicable in selected

internationalstock exchange and Indian stock exchange.

 To study of trading mechanism of Indian stock exchange and International

stockexchange.

31
CHAPTER - V
RESEARCH
METHODOLOGY

32
 Chapter – 5

RESEARCH METHODOLOGY

RESEARCH METHODOLOGY

Research Design:
The main objective of
this study is to capture
the trends, similarities
and patterns in the
activities and movements
of the Indian Stock
Market in comparison to
U.S. The aim is to
help the investors
(current and potential)
33
understand the impact of
important happenings
on the Indian Stock
exchange. This is
especially relevant in the
current scenario when the
financial markets across
the globe are getting
integrated into one big
market and the
impact of one exchange
on the other exchanges.
RESEARCH DESIGN:

The main objective of this study is to capture the trends, similarities and patterns in

theactivities and movements of the Indian Stock Market in comparison to U.S. The

aim is tohelp the investors (current and potential) understand the impact of important

happeningson the Indian Stock exchange. This is especially relevant in the current

34
scenario when thefinancial markets across the globe are getting integrated into one big

market and theimpact of one exchange on the other exchanges.

35
CHAPTER - VI
DATA ANALYSIS
&
INTERPRETATION

36
 Chapter – 6

Data Analysis and Interpretation

37
CHAPTER - VII
FINDINGS

38
 Chapter – 7

Findings

FINDINGS

39
CHAPTER - VII
LIMITATIONS OF
THE STUDY

40
 Chapter – 7

LIMITATIONS OF THE STUDY

LIMITATIONS OF THE STUDY

 Scope of the study is to understand the difference between the selected

international stock exchange and Indian stock exchange.

 This study is based on Historical and secondary data which leads to variation

inpresent and previous scenario

 This study is limited to selected stock exchanges.

 This study is purely based on secondary data and the qualitative approach is

usedfor the study.

41
CHAPTER - VIII
SUGGESTIONS
AND
RECOMMENDATIONS

42
 Chapter-8

Suggestions and Recommendations

SUGGESTIONS AND RECOMMENDATIONS

 To generate increased interest and awareness about the various other segments

ofthe market so that we can expect the operations to match its global counterparts

interms of volumes, frequency and variety of instruments traded.

 Market capitalization can increase through modification of listing agreements

forIndian stock exchange

 Listing of foreign companies should allow without establishment of

subsidieswith the consideration of increase market capitalization.

 There should be more focus on increase in market capitalization and

investmentawareness in India.

 FII considers measure factor by government where it can be increase of

marketcapitalization through Indian investors.

 Strategy to attract FII can be more profitable if it attracts foreign players to

getlisted in Indian Stock Exchange.

43
CHAPTER - IX
CONCLUSION

44
 Chapter-9
Conclusion

CONCLUSION

The comparison showed that Indian stock exchange has the governance system and

anefficient mechanism in place to be a world class institute, especially the

requirements ofClause 49 promulgated by SEBI and the advanced trading and

settlement mechanism ofNSE, respectively. However, unfortunately our

implementation of the same remains aproblem area with almost 15-20% of the listed

companies yet to align their operations asrequired under the law.Moreover, there are

also issues regarding the extent to which the sophisticated systems ofthe stock

exchanges (NSE, BSE) are utilized in terms of the volume and frequency

oftransactions and the range of instruments traded.One more reason that can be

attributed for the lag between a global benchmark likeNYSE and BSE or NSE

can be the fact that, in our country, listing of foreign companiesare still not allowed

fully companies with subsidies lunched in India can list for same.This can be due to

lack of depth and breadth of the market. the listing criteria differ interms of size as

well as their disclosure norms. This implies that the depth of the marketjudged by

the total capitalization is less for the Indian markets compared to

itscounterparts. Moreover, the disclosure norms affect the governance aspect as also

theinformation availability.One problem area that came out as a possible barrier in the

path of Indian stockexchanges attaining global level is the fact that India has a very

low rank in terms ofmarket capitalization NSE 10th and BSE 12th. All other stock

exchanges that we usedin our study rank above Indian stock exchange. This is in spite

45
of the fact that Indianstock exchanges have the highest number of companies listed

and BSE accounting foralmost 75%. Therefore, volume-wise, Indian market is still

pretty small.

46
BIBLIOGRAPHY

47
 BIBLIOGRAPHY

BIBLIOGRAPHY

BOOKS REFERRED

 Great Lakes Herald – April 2007 Volume 1, Issue 1 by Great Lakes Institute of

Management, Chennai

 Becker, K, Finery, J., & Gupta, M. (1990): ‘the Intertemporal Relation between

the US and Japanese Stock Markets’, Journal of Finance, 45, 1297-1306.

 IRACST – International Journal of Commerce, Business and Management

(IJCBM),ISSN: 2319–2828 Vol. 4, No .1, February 2015

WEBSITES

www.bseindia.com
www.nse-india.com
www.ebsco.com
www.tse.or.jp/english/index.shtm
www.hkex.com.hk/
www.krx.co.kr/webeng/index.jsp
www.tse.or.jp/english/index.shtml
www.nyse.com
www.rts.ru
www.kse.or.kr

48
ANNEXURE

49
 QUESTIONNAIRE

NAME:

50