A Study of Impact of Selected Marco Economic Variables on Indian Stock Market Index

Dissertation Proposal

A STUDY OF IMPACT OF SELECTED MARCO ECONOMIC VARIABLES ON

INDIAN STOCK MARKET INDEX

SUBMITTED TO

Prof. Nirmal Soni

 By:

Simranjeet Singh Chokdayat

Roll No: - 141255

Section: - B

Batch: MBA-FT (2014-2016)

Institute of Management, Nirma University

Date of Submission: 12th, October 2015

A Study of Impact of Selected Marco Economic Variables on

Indian Stock Market Index

Introduction

One of the G-20 major economy, a member of BRICS nation, and a developing country, India, which is classified as newly, industrialized country- became the world's, fastest growing major economy, from the last quarter of 2014, replacing China's. Indian economy is third largest, in the world by Purchasing Power Parity, and seventh largest, by nominal GDP.

The Indian economy has the potential to become, the world's 3rd-largest Economy by next decade, and one of the largest economies, by mid-century. And the outlook for short-term growth prospective, is also good as according to IMF, the Indian economy is the "bright spot" in the global landscape, India also topped World Bank’s growth outlook for the year 2015-16, for the first time, with economy grown 7.3%, in 2014-15 & expected to grow at 7.5-8.3% in 2015-16.

India's two major stock exchanges, Bombay Stock Exchange and National Stock Exchange of India, had a market capitalization of US$1.71 trillion and US$1.68 trillion, respectively as of Feb 2015, which ranks 11th & 12 largest in the world respectively, according to the World Federation of Exchanges.

Bombay Stock Exchange (BSE)

The Bombay Stock Exchange (BSE), is India's leading stock exchange covering various cities and towns across the country. BSE was set up by leading institutions, to provide a modern, fully automated, screen-based trading system, with national reach. The Exchange has brought about, unparalleled transparency, speed & efficiency, safety and market integrity. It has set up facilities that serve as a model, for the securities industry, in terms of systems, practices and procedures.

BSE has played a catalytic role in reforming, the Indian securities market, in terms of microstructure, market practices, and trading volumes. The market today uses, state-of-art information technology, to provide, an efficient and transparent trading, clearing and settlement mechanism, and has witnessed several innovations in products, & services viz. dematerialization of stock exchange governance, screen based trading, compression of settlement cycles, dematerialization, and electronic transfer of securities, securities lending and borrowing, professionalization, of trading members, fine-tuned risk management systems, emergence of clearing corporations, to assume counterparty risks, market of debt and derivative instruments and intensive, use of information technology.