STUDY ON THE FINANCIAL MARKETS IN INDIA: AN EMPIRICAL EVIDENCE

Author (s) : A.Vaishnavi & S.Manju V.S.Bharathipriya & M.Suganya

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Abstract :
The  flow  of  information  between  financial  markets  is  an  issue  that  has  attracted considerable  attention  in  the  empirical  finance  literature.  In  order  to  examine interrelation among different types of financial markets i.e. Capital Market, derivative market, Money Market and Foreign Exchange market in short run, the basic data used in the study consist of four  variables which are  spot equity index  rates, 3 month  future equity index rates, repo  rate ,dollar/rupee exchange rate  for the  financial year  2014-2015. This paper has made an attempt to study the impact of Equity Spot Market on Forex, Money and Index Futures Market by using a simple  regression analysis. The result indicates that the Spot Market has a significant impact on the Futures Market and Future Market is highly dependent on the Spot market. But the result of the regression analysis does not suggest the presence of significantly strong impact of Spot Market on Forex and Money Market. The study has also made an attempt to understand the causal link between Capital Market, Monet Market, Forex and Futures Market using univariate Granger  Causality,  but  did  not  find  any  evidence  for  the  existence  of  causal  link Between these segments of the Financial Market.

Keywords : Empirical finance literature, Money Market

Conference Date : 17/09/2021

Pages : 224

Paper ID : IESMDT222