Asian Journal of Management

Open Access Open Access  Restricted Access Subscription Access
Open Access Open Access Open Access  Restricted Access Restricted Access Subscription Access

Impact of Union Budget on CNX Auto and CNX Bank


Affiliations
1 University School of Management Studies, Guru Gobind Singh Indraprastha University, Dwarka, New Delhi, India
     

   Subscribe/Renew Journal


Most of the past researches have been done on NIFTY index, and very few of them are on sectoral indices. This study focuses on CNX AUTO and CNX BANK. The paper empirically examines the effect of Union Budget on average returns provided by CNX Auto and CNX Bank. The period covered under study is from 2011 to 2015.This period includes a total of 5 Union Budgets and 1 Interim Budget. To study the impact of union budget a total of 60 trading days before and after the budget is considered and this time period was segregated into long term (30 days), medium term (10 days), short term (3 days) prior and subsequent to the declaration of the union budget. The study answers the following queries: Is the volatility in stock market induced by the budget or is it the general market volatility which we observe in any normal day? And is the stock market response to a Budget is immediate or should the market be given ‘some time’ to digest the information? The statistical tools used are paired T-test and F-test. Paired T-test is conducted on average returns and F-test is conducted on variances. The findings conclude that there is no impact of budget on the returns of long term, medium term and short term period. Volatility, on the other hands for both CNX Auto and CNX Bank does not change from long term pre budget period to all the post budget period. Further, it provides that there is no increase in the volatility as time increases in post budget period. The implication of this paper is that investor should continue with his strategy on investing in CNX Auto and CNX Bank around the budget period as there is no significant change in the volatility during budget period.

Keywords

CNX Auto and CNX Bank, Budget, Volatility/variances, Returns, Pre-Budget Period and Post-Budget Period.
Subscription Login to verify subscription
User
Notifications
Font Size


  • Rao S.V.D Nageswara. Impact of Macroeconomic Events on Stock Price Behaviour. Management and Accounting Research. 1(1); 1997: 46-67.

  • Arindam Gupta and Debashis Kundu. A study on the impact of Union Budget on stock prices in India The ICFAI Journal of Applied Finance. 12(10); 2006: 65-76.

  • Susan Thomas and Ajay Shah. The stock market response to the Union Budget" Economic and Political Weekly. Volume XXXVII, Number 5; 2002: 455–458.

  • Mohanty, Munmun. Stock Market Reaction to Announcement of Policy Change. The ICFAI Journal of Applied Finance.2004: 34-42.

  • Verma and Agarwal, Verma Ashutosh Verma and Agarwal Neeti.Impact of Budget on Stock Prices: An Event Study.PCTE Journal of Business Management. 2005: 17-23.

  • P. Varadharajan and Dr. P Vikkraman. Impact of Pre and Post Budget on Stock Market Volatility Between 2001 to 2011. Journal of Contemporary Research in Management, October- December, 2011.

  • Aabha Singhvi (2014) Impact of Union budget on NIFTY" Pacific Business Review International, June. 6(12); 2014; 6-14.

  • Li et al. The Relationship between Stock Returns and Volatility in International Stock Markets. Journal of Empirical Finance. 12(5); 2005: 650- 665.

  • Joshi, Prashant and Pandya, Kiran. Exploring Movements of Stock Price Volatility in India. The ICFAI Journal of Applied Finance. 14(3); 2008: 5-33.

  • Dutt, Tanuj and Humphery, Mark. Stock Return Volatility, Operating Performance and Stock Returns: International Evidence on Drivers of the Low Volatility. Journal of Banking and Finance. 37(3); 2012: 999-1017.

  • Nirmala, P.S., Sanju P.S.; and Ramachandran. Determinants of Share Prices in India”, Journal of Emerging Trends in Economics and Management Sciences (JETEMS). 2(2); 2011: 124-130.

  • French, K.R., Schwert G.W. and Stambaugh. Expected Stock Returns and Volatility. Journal of Financial Economics. September, 19; 1987: 3-29.

  • De, Bondt Werner and Thaler, Richard. Does the Stock Market Overreact. The Journal of Finance. 40(3); 1985: 793-805.

  • Kaur, Harvinder. Stock Market Volatility in India. The Indian Journal of Commerce. 57(4); 2004: 55-70.

  • S.Babu and Dr. M.venkateswarlu. Impact of Union Budget on Indian Stock Prices. International Journal of Management Research and Review. 3(5); 2013: 2890-2896.

  • Kutchu, Vishal. Testing Semi-Strong Efficiency of Indian Stock Market - A Study on Effect of Union Budget 2012 on Six Select Sectoral Stocks. International Refereed Research Journal. 3(2); 2012: 74


Abstract Views: 179

PDF Views: 0




  • Impact of Union Budget on CNX Auto and CNX Bank

Abstract Views: 179  |  PDF Views: 0

Authors

Divya Verma Gakhar
University School of Management Studies, Guru Gobind Singh Indraprastha University, Dwarka, New Delhi, India
Tina Mohun
University School of Management Studies, Guru Gobind Singh Indraprastha University, Dwarka, New Delhi, India
Anita Pandey
University School of Management Studies, Guru Gobind Singh Indraprastha University, Dwarka, New Delhi, India

Abstract


Most of the past researches have been done on NIFTY index, and very few of them are on sectoral indices. This study focuses on CNX AUTO and CNX BANK. The paper empirically examines the effect of Union Budget on average returns provided by CNX Auto and CNX Bank. The period covered under study is from 2011 to 2015.This period includes a total of 5 Union Budgets and 1 Interim Budget. To study the impact of union budget a total of 60 trading days before and after the budget is considered and this time period was segregated into long term (30 days), medium term (10 days), short term (3 days) prior and subsequent to the declaration of the union budget. The study answers the following queries: Is the volatility in stock market induced by the budget or is it the general market volatility which we observe in any normal day? And is the stock market response to a Budget is immediate or should the market be given ‘some time’ to digest the information? The statistical tools used are paired T-test and F-test. Paired T-test is conducted on average returns and F-test is conducted on variances. The findings conclude that there is no impact of budget on the returns of long term, medium term and short term period. Volatility, on the other hands for both CNX Auto and CNX Bank does not change from long term pre budget period to all the post budget period. Further, it provides that there is no increase in the volatility as time increases in post budget period. The implication of this paper is that investor should continue with his strategy on investing in CNX Auto and CNX Bank around the budget period as there is no significant change in the volatility during budget period.

Keywords


CNX Auto and CNX Bank, Budget, Volatility/variances, Returns, Pre-Budget Period and Post-Budget Period.

References