Impact of Non-financial Determinants on Indian Banking Stocks – An Empirical Analysis
S. Sundara Ram *
C. U. Shah University, Wadhwan, Gujarat, India.
Munjal Dave
C. U. Shah University, Wadhwan, Gujarat, India.
M. Rajesh
VIT Business School, VIT University, Tamil Nadu, India.
*Author to whom correspondence should be addressed.
Abstract
Aims: This study aims at analysing the influence of some of the most important external factors (macro economic variables) on the stock prices particularly the banking stocks of India listed in stock exchanges of the country.
Sample Design: Multistage design.
Place and Duration of Study: Public and private sector banks of India listed in stock exchanges of the country for a 12 year period i.e. 2006-07 to 2017-18.
Methodology: On the basis of market capitalisation the top five banks from each sector i.e. public and private are selected. The data of stock prices of these banks is collected from the annual reports of the banks. The data of the explanatory variables is collected from the reports of Central Statistics Office, financial journals etc.
Results: The impact of the explanatory macroeconomic variables on the market prices of these banking stocks for the period is analysed with the help of suitable statistical techniques viz., Mean, Standard Deviation, correlation, and Multiple Regression Analysis.
Conclusion: Some of the macroeconomic variables are influencing the stock prices of the banks.
Keywords: GDP, inflation, industrial production, FIIs, oil prices, market price.