This study offers empirical findings on the impact of institutional variables on firm’s stock market price performance. In order to identify the influence of companies financial on NIFTY 50 Index, our sample consists of balanced panel of 30 actively traded companies (that becomes the study’s index representative) over a massive transition period, 1995–2014. Attempts have been made with a wide range of econometric models and estimators, from the relatively straightforward to (static) more complex (dynamic panel analyses) to deal with the relevant econometric issues. Results indicate that increasing debt in capital structure does not establish any significant relation with the stock prices. Earnings per share (EPS) shows a poor explanation of price variation. Economic value added (EVA) indicates a positive relation with current as well as previous year’s stock price performances. However, dividend payout (DIVP) and dividend per share (DPS) achieve negative relationship at moderately significant level. The present study confirms that performance of companies fundamental ratios will be essential and immensely helpful to investors and analysts in assessing the better stocks that belong to different industry groups.
In light of the persistent and coinciding internal and external imbalances, there remains an argument that worsening balance of payment (BoP) is the result of higher fiscal imbalance. However, no concrete consensus either theoretical or empirical exists, particularly in the context of India, and, therefore, this phenomenon of the twin deficit hypothesis becomes more of an empirical question. This study makes a timely and fresh revisit, especially in the backdrop of the fiscal expansions, to curb the recent recessionary situation that is engulfing the economy. To this end, an econometric exercise is undertaken on a quarterly data of financial year over 2000–2019. This work also extends the analysis with three reference variables, namely gross domestic product (GDP), private investment to GDP, real effective exchange rate together with the data for three dummy years to capture the impact of their specific occurrence in a particular year. The transmission mechanism describes how the budget deficit transcends and affects external sector variables. Empirical findings suggest a strong positive association between the budget deficit and current account deficit (CAD), which reinforces the validity of Mundell–Fleming and Keynesian theories. The effect of different exogenous variables explicitly indicates a simultaneous action on multiple fronts to improve the twin account balance.
The current work adds to the present research by exploring the asymmetric impact of gold prices, interest rates, oil prices and the currency exchange movements in the Indian equity market. The study considers the monthly price of interest rate, crude oil, USD versus INR, BSE Sensex closing value and the prices of gold. A non-linear method promoted by Shin et al. (2014) is applied to 27 years of data from 1990 to 2018 to examine short-term and long-term asymmetrical relationships. The empirical outcome revealed that the variables analysed have an asymmetrical influence on the equity index. Positive shocks on crude oil prices affect the stock index negatively, while gold price changes tend to generate a favourable effect on the stock indices in a short interval yet suggest the adverse impact in the long-run. A positive short and long-term reaction on the equity indices is seen due to the negative move in currency exchange. The results are essentially significant due to the commodities’ volatility pattern that plays a determining role to value derivatives and hedging instruments. The asymmetric relation of explanatory variables with stock index offers a superior understanding of the risky environment, especially in emerging financial markets.
The research seeks to assess whether the Indian capital market is following a sustainable equilibrium relationship with gold, oil and currency exchange in long and short intervals or not. The study uses autoregressive distributed lag (ARDL)-unrestricted error correction model (UECM) Bounds test over 25 years from 1990 to 2016. The result indicates that equity indices are cointegrated and has a relationship for a long run with gold and currency exchange. Volatility in gold prices and currency exchange affects equity performance for a long and short interval of time. Only oil price movements affect the currency exchange rate in long-run. No other variable makes any impact on it in short-run. The outcome supports gold that appeared as an alternative investment asset class in the investors' community. The report features the necessity to structure policies so that currency exchange gestures and financial return volatility can be monitored and controlled with gold and oil prices as instruments. | INTRODUCTIONIn recent times, Indian markets have undergone significant uncertainty, either in financial markets or commodity markets. Foreign currency markets are reflecting a persistent decline in rupee value against US dollar, followed by high movements in crude, gold prices, and equity returns. When it comes to lead the market these variables are critical. Commodities price movements have a pervasive impact on all economic and financial movements along with all segments of the global economy. All the movements of market integration in the financial world are also visible in the commodity market with the most traded metals gold and oil. Gold and oil are the most common among the active traded commodities (Yaha, Tumala, & Udomboso, 2016).Gold serves as a best preserving purchasing power over a long period due to its high liquidity; a hedge against inflation; owing to its favorable correlation (Bampinas & Panagiotidis, 2015), a source of wealth, derivative valuation, and so forth (Gaur & Bansal, 2010;Yahyazadehfar & Babaie, 2012). In addition, crude as a principal indi-
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