Monthly Archives: April 2019

4Apr

Impact of Indian festival on the Stock Market

Hello Traders,

I hope you all are doing well and making lots of money in stock market. As the festival of color is on the way and traders started asking me about its impact on the stock market, so today i am writing this article in guidance of Epic Research R&D team, to help you decode the mystery of the stock market and help you understand the effect of various Indian Festival on the stock market.

The Main Objective :

Objective behind writing this article is to provide you Impact of various Indian festival on the stock market to help all the traders and investors with their investments during the festivals in India.

Selection of the Indices :

  • We will select S&P CNX Nifty Indices because of their most liquid stocks in the portfolio.
  • National Stock Exchange (Largest Volume and Market Capitalization).
  • Oldest stock index (BSE Index S&P BSE SENSEX).

Time for Mathematical Calculation :

** Daily Return series were generated from closing prices.

 For two return series areas :

Rt ={(P1 – P0)/P0}*100

Where P1 = daily closing price at time t, P0 = daily closing price at time t-1 and Rt = daily return at time t

Separate Return series for each festival were generated from this for all festivals.

Pre and Post Festival daily returns are arranged for 10 years respectively for 7, 15 and 30 days which also include daily returns of festival day if the market is not closed that day. Mainly two statistical tools were used 1.) Paired Sample t test : for comparison of mean return before and after festival & 2.) Descriptive Statistics : which helps to study basic characteristics of series.

Study Hypothesis :

H0: Before and after the festival there is no significant effect of festival on mean returns of stock indices.

Closing prices of Bombay Stock Exchange Index S&P BSE SENSEX and NSE Index S&P CNX Nifty were taken from respective official portal of the stock exchanges.

Data for the study :

Festivals Selected for the study are :

1.) Makar-Sakranti 2.) Holi 3.) Rakha Bandhan 4.) Navaratri 5.) Vasant-Panchami 6.) Rama Navami

7.) Janmasthami 8.) Dushera 9.) Shiva-Ratri 10.) Akshay –Tritiya 11.) Ganesh-Chaturthi 12.) Diwali

*Non-Probabilistic convenience sampling is applied to collect data.

Analysis of data and its Interpretation :

Characteristics of the series is analysed by descriptive statistics. Peakness of the data is Kurtosis. Non-symmetry level is indicated by Skewness measure and the standard and mean deviation are first two steps of analysis.

It is being observed from the study that maximum and minimum returns for daily returns were 12% and -16% respectively and for both the indices the value of kurtosis was around 8 and 9. Whereas for both the indices, average daily returns were 0.07% and the standard deviation was around 1.65%. It implies that daily return fluctuate around 2%.

**H0 = Before and after 7 days of the festival there is no significant difference in the mean return of the sensex was observed.

Interpretation :

To measure the influence of the festival on returns of the Sensex an Nifty, paired sample t test on the 10 year data was carried out.

For Vasant panchami, Rama Navami, Makar Sakranti, Shiva Ratri, Raksha Bandhan, Navratri, Akshay tritiya and Ganesh chaturthi the p-value is more than 0.1 which implies that the above mentioned festivals do not have any significant impact in the mean returns of the stock.

But if we look into the table the festivals which had significant impact on the mean returns of the stock were Diwali, Janmashthami and Holi with p-value less than 0.1 . The mean return increases by nearly 0.5% to 1% in most of the festivals as observed from the table.

After analyzing the returns for 7 days, Now we will analyze returns of Sensex and Nifty for 15 and 30 days to check how long the impact of festivals was in the stock narket.

**H0 = Before and after 15 and 30 days of festival, there is no significant difference in the mean return of sensex.

Result of t test for 15 and 30 days analysis for Janmasthami, Diwali and Holi is given below in the table.

It can be observed from the above table for the selected index (for 15 and 30 days analysis), p-value of only Holi is smaller than specified alpha value of 0.1 for the selected index. Thus it can be concluded that among Janmashthami, Diwali and Holi, impact of only Holi lasted the longest and the mean return increases by 0.5%.

Conclusion :

  • Excess return during the post period of Janmashthami, Diwali and Holi.
  • During these festivals, market is informally efficient so customer can avail maximum opportunity in order to obtain good returns.
  • Consumer selling is high due to festive season and high cash in hand.
  • In Janmashthami, there is a ritual of betting thus many traders invest their money in the stock market which may increase the stock prices in this festival.
  • High returns can be expected after Holi because annual budget is presented in the parliament during February to April.

Hope this will help you to understand how important role festival play while investing your money in the stock market. If you have any suggestions you can feel free to comment in my comment box.

Epic Research Team Wish you Good Luck and Prosperous future.

4Apr

IAF Air Strike Impact on the Indian Stock Market

First of all Epic Research heartily Congratulates Indian Air Force for their bravery and the Government of India for taking such a bold and strong action against terrorism as promised by our honorable PM Narendra Modi (“Is baar pura hisab liya jaega”).

On 14/Febr/2019, a vehicle-borne suicide bomber at Lethpora in the Pulwama district,J&K, India attacked a convoy of vehicles carrying CRPF(Central Reserve Police Force) Jawans. The attack was carried-out by Adil Ahmad Dar (Member of Jaish-e-Mohammad) which killed 40 CRPF Jawans and full responsibility of attack was was claimed by the Pakistan-based Islamic terror group Jaish-e-Mohommad (JeM)

The Indian Air Force on 26/Feb/2019 morning crossed Line of Control and carried out air strike at multiple terrorist training camps. This Air Strike was amid to destroy all the JeM terror camp which was running in the presence of Pakistan (Aatankistan) in Balakot Pakistan.

According to India Air Force 12 Mirage Fighter jets crossed Line Of Control and struck JeM terror launchpads in Balakot, Chakothi and Muzaffarabad areas in Pakistan, where this terror camps were running under the supervision of ISI and Pakistan. The Mirage Fighter jets dropped 1000 kg of bombs at terrorist training camps around 3:30 AM and whole operation took only 21 minutes for IAF and they came back safely without any causality.

AIR STRIKE IMPACT ON THE INDIAN STOCK MARKET

Just after the news of Air strikes, the Indian Rupee opened at 71.25 which was 27 paisa weaker with respect to yesterday’s closing price i.e. 70.98. The BSE Sensex fell nearly 500 points, whereas Nifty opened at 10775 around 100 points weaker and the fear gauged India VIX surging 17 per cent.

After that , the Indian stock market recovers around 70 points & settles around 10850. Due to increase in INR, the IT stock opened on the positive note, on the other hand Banking stocks and the NBFC opened on negative note.

  • SBI economists said, After the IAF Air Strike Stock Market will see the gradual Rise in the market because the action taken by government of India will build a positive dissuasion in the minds of investors and traders.

On Air Strike day, Nifty Index and BSE Sensex fell 1.3% Intraday before paring losses to end day 0.41% and 0.66% weaker.

India and Pakistan (Aatankistan) fought The Kargil War during May to July 1999. During this period the Indian Stock Market showed an slightly initial decline but very strong recovery thereafter. Sensex and Nifty declined by 286 points and 79 points, respectively, in initial three days of trading, but recovered strongly thereafter and ended higher by 652 points and 191 points when the conflict ended.

It was observed that overall impact was positive for the markets after Kargil War and the Indian economy grew at a healthy 6.5 % as the year before 1999–2000.

Post Surgical strikes (URI), Indian financial markets gained with the Sensex climbing by more than 100 points and the rupee too appreciated. From a longer perspective, Indian financial markets, including the currency, stock and even the bond market showed traction. For example, stock markets jumped by 3,456 points, while the rupee appreciated by 2.4 per cent.

According to the Reports impact of air strikes on terrorist training camps didn’t had any material impact on the Indian Stock Market and it remained unaffected post Uri and Kargil, as these conflicts are more localized in nature. It is also clearly mentioned by New India that there will be bold and strong action for every terrorist attacks in future, this shows New India’s decisiveness in its foreign policy and this will in fact act as a positive mark for the Marketers.

I tried to mention as many information as possible from different sources. Please comment me in the comment box if there are any points which i missed to write down. Feel Free to comment.

Epic Research Team Always stand with the Bravery of the Indian Air Forces and feel proud to have brave soldiers in our great nation. And also supports all the decisive and bold action by Government of India Against terrorism.

Jai Hind and Vandematram

4Apr

How To Prepare Yourself Before Entry In The Stock Market

How to prepare yourself before entry in the stock Market

I heard from most of the non-investors that it is easy to make investments in the stock market, but they do not do that because they think the stock market is similar as the gambling (Both are different from each other and I already clarified you this in my previous article based on the myths of the stock market). If you are new in the stock market maybe you also think the same, all it is because you are not into the market yet, but in reality, it is a tough task and how tough it is, you will get it once you entered into the market (you can also clarify your thoughts from here Epic Research). If you are really excited to enter into the market you have to prepare for it first, and how you do that I am telling it to you. For the preparation, you should ask yourself these three questions such are :

Why do you want to invest in the stock market, for money? Obviously, you are, but is it the only reason to invest in? Do you know that you also have to give so much to earn more I am not talking about the amount of money that you going to invest but along with the money it also requires your learning, your patience and the most precious your time? I don’t mean that investment is the wastage of the time, but it is really good to invest in just because when you invest in some company, it helps the company in its growth. So be prepared to invest your time too. If you ask the best thing for investments most of the people would suggest you to do real estate investments either it is good and have no risk but you need a lot of money to invest in the real estate but in case of the stock market you can invest very few amounts you are able to.

What stocks you have to invest in? If you want to enter into the market obviously you have to know how to enter. Do you have to know what stocks you are going to buy for entry? There are some options of stocks you can select it based on your analysis and risk bearing factors, such are: Equity, Commodity, Forex, Index Futures, Options, and Futures ( Here I am giving you a quick intro of all of these but I will define and simplifies each of its in details in my later articles one by one)

In equity, if you invest Rs 1 you can take the leverage of 1. Is it tough to understand? Okay, you can understand it as in equity if you invest Rs 1 you can take the things which value is one so here leverage means that value, get it? Same as In futures if you invest Rs 1 you can take the leverage of 5. In Index futures, if you invest Rs 1 you can take the leverage of 10. In commodity, if you invest Rs 1 you can take the leverage of 20. In options, if you invest Rs 1 you can take the leverage of 50. And if you invest Rs 1 you can take the leverage of 400 in Forex. So higher the profit you want higher the risk you have. Select Stocks as per your temperament, and disciplines.

The last one is when to invest in the stock market? Yes, you read it correctly, time is also an important factor when you entered the market. And generally, before the budget is the best time to invest in the stock market. Do you remember when our previous government passed the budget yet before, it was the best time for the investors as the market was high? After that, the market went down and then increases at a slow rate. How an Indian market run is based on the two factors first is the growth of the company and the second one is the psychology of investors. If psychology of the people said that the market goes up it definitely goes up. In India, this psychology drives the market.

Planning for your investment? Don’t wait, go for it. Make plans based on the above three questions. Keep in mind it is just to do homework before as well as after the investments you made in the stock market.

About the Author :

Hi everyone, I am a financial analyst in Epic Research. I like to read and write about the stock market. Hope the above content is readable and easy to understand for you.

4Apr

Some Myths Of The Stock Market

Some Myths Of The Stock Market

A vast term that is required so much learning to understand it – “The stock market”. Of course, you all know about the simple definition of the stock market, But be honest and ask it to yourself what is the very first thing comes in your mind when you hear the term “Stock market”? Is the stock market scares you? Do you have any concepts that make you scared to make an investment in the stock market? If your answer is yes, it is necessary for you to clear out all of the false concepts that you have regarding the stock market because the reality is different. So you can take advice from the financial firms viz. Epic Research. So shall we start? Okay so there are some misconceptions of the stock market, such are:

  • The very first misconception that everyone has is that the stock market is the “gambling”. And you are a gambler if you have any investment in it. Either there are some similarities between them but there is one difference that you can not change the probability of winning or losing in the gambling but you can change it in the stock market. Hence this one difference make both the terms different from each other.

  • The second misconception of the stock market is that You must have a lot of money to make an investment in the stock market. But the reality is that you can make an investment with a very few amounts. It completely depends on you that how much amount you have to invest in. Many successful investors start their investments with a few amounts.

  • Another misconception is the Stocks that valuation arises must be fall by the time. No, it’s actually not. The valuation of the stock is based on the performance of that particular company. If you have an investment in such a company that is managed by the professionals than there is less chance to fall. So the valuation of the stock based on the performance of the company.

  • Another myth is that little knowledge about the stock market is sufficient to invest in. what do you think are only knowing the definition is enough for you to invest in? I think it is not. It is similar like only knowing the alphabet is not enough for the one to write a sentence or a word. For writing a word or a sentence one needs the knowledge of placing the correct letter on the correct position. After that the word or the sentence make any sense. So if you really want to succeed in the stock market it is the must for you to have complete knowledge of it. Don’t worry I am not saying you to do the masters in the stock market. All I want to say is to take knowledge of each and every single term that is related to the stock market.

  • Another myth is that the forecasts of the trading are accurate to rely on. But the truth is that the stock market is quite unpredictable. One cannot easily predict the daily ups and downs of the stock market. But if it so how one can earn the profit on their investments? It is simple to study makes you perfect in it. We focus on market activities will help you to earn a profit.

  • One more myth is that non-investors thinks that it is simple to invest. What you have to do is just to buy at less and sell at high. In reality, not only for the beginners but also for the experienced investors it took time to understand when to buy stocks and when to sell. Sometimes one wrong decision and you get the loss.

Obviously, the above myths make someone scared to invest in the stock market. That is why I am saying you to do hard work. It is because the stock market requires lots of efforts and more and more learning about the stock market as you can. Up to date with the stock market daily updates. Clarify your thoughts of the stock market and freely invest in the stock market to earn the profit.

About the Author :

Hi everyone, I am a financial analyst in Epic Research. I like to learn and write about the stock market. I put my efforts to create the following content and really glad to share my learning with you.

© 2008-19. All Rights Reserved. Epic Research Pvt. Ltd.