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An Analysis of The Announcement of Demonetization on the Stock Market Returns


     

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On the eve of 8th Nov 2016 Indian Prime Minister Narendra Modi in his address to the nation announced his decision to demonetize the 500 and 1000 Rs notes from the midnight of 9th November 2016. By this unexpected and uncertain decision the government of India had pulled 86% of the money supply out of the circulation leading to liquidity crunch. The impact of Demonetization had been felt by almost every sector of the economy. Different sectors responded in different ways to this decision and stock market on the very next day ended in red. This present pa per attempts to analyze the effect of demonetization on market return by analyzing 103 day i.e. 5 months trading data before and after the demonetization day using Event analysis methodology and students test.
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  • An Analysis of The Announcement of Demonetization on the Stock Market Returns

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Abstract


On the eve of 8th Nov 2016 Indian Prime Minister Narendra Modi in his address to the nation announced his decision to demonetize the 500 and 1000 Rs notes from the midnight of 9th November 2016. By this unexpected and uncertain decision the government of India had pulled 86% of the money supply out of the circulation leading to liquidity crunch. The impact of Demonetization had been felt by almost every sector of the economy. Different sectors responded in different ways to this decision and stock market on the very next day ended in red. This present pa per attempts to analyze the effect of demonetization on market return by analyzing 103 day i.e. 5 months trading data before and after the demonetization day using Event analysis methodology and students test.

References