Effect of Recession on Sensex

8/1/2019 Effect of Recession on Sensex

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Presented by:

Pradip Gupta

Sujit Kumar

Paromita Sarkar

Sudhir Yadav

Naresh Sarout

Rohit Yadav


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TWO STAGES OF MARKET

ECONOMY

a)Growing Market Economy

b)Declining Market Economy

TWO FACTORS OF

MARKET

a)Demand &

b)Supply


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Recession is a contraction phase of the Business

Cycle.

It is decline in GDP growth for 2 or more

consecutives quarter of a year.

GDP = Value of all the reported goods and services

produced by the people operating in the country

GDP = MONEY VALUE OF {C + I + G + (X M)}

C = Consumables, I = Gross Investments, G = GovernmentSpending, X = Exports, M = Imports


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How to come out of recession?

Government has 2 plans

Fiscal Policies(By Govt.)

Monetary Policies(By RBI)

Government influences the

economy by changing how

it (Govt) spends and

collects money

RBI manipulates

the available supply ofmoney in the country


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Recession has a huge impact on Indian stockmarket.

According to investors FIIS are the main factor in

fluctuation in indices of Indian stock market.

Respondents basically invest their money for ashort period of time.

They dont have much knowledge of derivative

market.

They are not fearful regarding their deposits in anyIndian bank.


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Investors in Indian markets lost more than 16 trillion

Rupees in just 2 days !

The ICUs of almost all city hospitals were full

January 21, 2008January 22, 2008

February 11, 2008

March 3, 2008

March 17, 2008

10 October, 2008

October 24, 2008


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Except for Hindustan Unilever Rest of theSensex scrips closed in the red, with DLFleading the pack with a loss of 14.9 percent.

In fact, the barrage was so strong that allsectoral indices closed lower in the rangeof 2-11.6 per cent.

The market breadth was sharply negative as2,332 shares lost ground while only 345gained.

The trading volume dropped to Rs.6,134.02 crore from Rs. 7,215.42 crore onWednesday.


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FIIs now own Indian equities worth over

$101 billion, the highest in history, accordingto data released by Sebi. As of 31 May 2011,FII ownership of Indian equities accountedfor 16.9% of the market capitalisation ofBSE-500 companies.

Since August this year, FIIs have pulled out

around Rs 11,360 crore from the equitymarkets. During the same period, thecountry's benchmark index, the Sensex,slipped roughly 10%


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SEBI must do something regarding FIIS.

SEBI must take some steps to educate Indian

investors so that they will invest after doing proper

fundamental & technical analysis of stocks.

Investors must invest for long period and invest in

various sector(portfolio diversification) to

minimize their risk.


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Documents

Effect of Recession on Sensex