Movement of Stock Market and Its Effect on Banking Sector Stock

Abstract

Banking sector is always important for economic growth and development. As per the Reserve Bank of India (RBI), India’s banking sector is sufficiently capitalized and well-regulated. The financial and economic conditions in the country are far superior to any other country in the world. Credit, market and liquidity risk studies suggest that Indian banks are generally resilient and have withstood the global downturn well. A stock market, equity market or share market is the aggregation of buyers and sellers (a loose network of economic transactions, not a physical facility or discrete entity) of stocks (also called shares), which represent ownership claims on businesses; these may include securities listed on a stock exchange as well as those only traded privately. The present study attempts to find out the impact of share market fluctuations on banking sector stock and vice versa. The research is based on secondary data. Past five years’ data of stock market have been used. Correlation analysis is used as a statistical tool to find out the relation between Indian Stock Market and Stocks of Banking Sector.