A STUDY ON ANALYSIS OF EQUITY SHARE PRICE

BEHAVIOR OF THE SELECT INDUSTRIES

SUBMITTED TO:
Prof:Dr.Chakravarthi Paladugu

SUBMITTED BY:
Jn.chandrakanth
Reg no:9002
PGDM(2013-15)

Chapter:-1

Introduction
The Indian capital Market has witnessed a tremendous growth. There was an explosion of
investor interest during the nineties and an Equity Guilt emerged in statutory legislations has
helped the capital market. Foreign Exchange regulation act is one such legislation in this
direction.
An important recent development has been the Entry of Foreign Institutional investors are
participants to the primary and secondary markets for the securities. In the past several years,
investments in developing countries have increased remarkably. Among the developing countries
India has received considerable capital inflows in recent years. The liberalization policy of the
government of India has now started fielding results and the country is poised for a big leap in
the industrial and economic growth. The Economy of the country is mainly based on the
development of the corporate sectors. A better understanding of the stock market trend will
facilitate allocation of financial sources to the most profitable investment opportunity. The
behavior of stock returns will enable the investors to make appropriate investment decisions. The
fluctuations of stock returns are due to several economic and non-economic factors. The study is
aimed at ascertaining the behavior of share returns. This project analyses the equity share
fluctuations in India Selected Industry. It also measures the strength of the trend and the money
involved in investing in the stocks. Simple moving average model is applied for selected
companies which would give the investor a sell signal or buy signal.
In India most of the industries require huge amount of investments. Funds are raised mostly
through the issue of share. An investor is satisfied from the reasonable return from investment in
shares. Speculation involves higher risks to get return on the other hand investment involves no
such risks and returns will be fair. An investor can succeed in his investment only when he is
able to select the right shares. The investors should keenly watch the situations like market price,
economy, company progress, returns, and the risk involved in a share before taking decision on a
particular share. This study made will help the investors know the behaviour of share prices and
thus can succeed.

FACTORS AFFECTED FOR THE SHARE PRICES

Share prices are affected by the following factors. The major factors are
* Inflation
* Deflation
* Interest Rates
* Exchange Rates
INFLATION
An increase in the cost of goods and services over a period of time. Decreases the purchasing
power of the dollar. It is usually measured by the consumer price index.
INTEREST RATES
The fee paid to a leader to borrow its money or a penalty charged for late payments usually
shown as annual percentage rate.
DEFLATION:
The drop in the cost of goods and services over a period of time. Usually caused by a shrinking
supply of money or credit, or reduced spending by consumers or government. Boosts Purchasing
power of the dollar.
EXCHANGE RATES:
The price of one country's currency expressed in another country's currency. In other words, the
rate at which one currency can be exchanged for another.

Chapter 2
RESERARCH METHODOLOGY
Research Design
This project analyses the equity share fluctuations in India Selected Sector. It also measures the
strength of the trend and the money involved in investing in the stocks. Simple moving average
model is applied for selected companies which would give the investor a sell signal or buy
signal.
Data and Sources of Data
Secondary data was used for the analysis print media and internet has been used for data
collection. The data also obtained by the national stock exchange website (www.nscindia.com).
For the purpose of this study the daily closing prices of 18 companies included in National stock
exchange were taken and their price movement are computed and studied. The sectors selected
are as follows:
* Automobile
* Banking
* IT
* Oil Exploration and Refinery
* Tele communication

* Automobile
* Tata Motors Ltd.
* Maruti Suzuki India Ltd.
* Bank
* State Bank of India
* ICICI Bank Ltd.
* Oil Exploration and Refineries
* Oil & Natural Gas Corporation Ltd.
* Reliance Petroleum Ltd.

* IT
* Infosys Technology Ltd.
* TATA Consultancy Services Ltd.
* Telecom
* Bharati Airtel Ltd
* Reliance Communications Ltd.
The purpose of this analysis is to false the 12 months solid data from the National Stock
Exchange website and to predict the market trends in each of the above mentioned companies.
TIME PERIOD COVERED
The daily share prices of above mentioned companies were taken for a period of nearly one year
from 1st May 2013 to 30 the April 2014. The closing prices of share prices were taken and the
future price movements were analyzed.
METHOD OF SAMPLING
Since for the purpose of this analysis five sectors are taken and from the five sectors two
companies are taken in each sector. Therefore the sampling used for selection of the sectors is
judgmental sampling based on the contribution of each sector to the GOP of the country. The
three sample companies in each sector are selected based upon the Market capitalization of the
companies in those sectors. In this method, items for the sample are selected on certain predetermined criteria. The fixation of criteria and the choice of sampling may bring in personal
element and introduce basis.
This method is usually applied in small enquiries and researchers by individuals when they are
familiar with all the items of the population. It is difficult to estimate the sampling error and the
reliability of the result depends on the investigator and the impartiality in the choice of the item.
TOOLS USED FOR ANALYSIS
SIMPLE MOVING AVERAGE
MONEY FLOW INDEX
RELATIVE STRENGTH INDEX

Chapter 3:Sectors profile

BANKING SECTOR

According to the RBI definition commercial bank which conduct the business of banking
in India and which (a) have paid up capital and reserves of an aggregate real and exchangeable
value of not less than Rs 0.5 mn and (b) satisfy the RBI that their affairs are not being conducted
in a manner detrimental to the interest of their depositors, are eligible for inclusion in the Second
Schedule to the Reserve Bank of India Act, 1934, and when included are known as Scheduled
Commercial Banks. Scheduled Commercial Banks in India are categorized in five different
groups according to their ownership and/or nature of operation. These bank groups are (i) State
Bank of India and its associates, (ii) Nationalised Banks, (iii) Regional Rural Banks, (iv) Foreign
Banks and (v) Other Indian Scheduled Commercial Banks (in the private sector). All Scheduled
Banks comprise Schedule Commercial and Scheduled Co-operative Banks. Scheduled
Cooperative banks consist of Scheduled State Co-operative Banks and Scheduled Urban
Cooperative Banks.
Market Share
The share of Public Sector Banks showed deceleration in respect of major areas of business,
where as that of the new private sector and Foreign Banks earned higher share of business.
The market share of the Old Private Sector Banks too came under pressure. Public Sector
Banks hold 75% market share in major areas of business.
IT INDUSTRY

Information technology (IT) industry in India has played a key role in putting India on the global
map. IT industry in India has been one of the most significant growth contributors for the Indian
economy. The industry has played a significant role in transforming Indias image from a slow
moving bureaucratic economy to a land of innovative entrepreneurs and a global player in
providing world class technology solutions and business services. The industry has helped India
transform from a rural and agriculture-based economy to a knowledge based economy.
Information Technology has made possible information access at gigabit speeds. It has made
tremendous impact on the lives of millions of people who are poor, marginalized and living in
rural and far flung topographies. Internet has made revolutionary changes with possibilities of egovernment measures like e-health, e-education, e-agriculture, etc. Today, whether its filing
Income Tax returns or applying for passports online or railway e-ticketing, it just need few clicks
of the mouse. Indias IT potential is on a steady march towards global competitiveness,
improving defense capabilities and meeting up energy and environmental challenges amongst
others.

IT-ITeS sector in India, with the main focus on increasing technology adoption, and developing
new delivery platforms, has aggregated revenues of USD 88.1 billion in FY2011, while
generating direct employment for over 2.5 million people. Out of 88.1 billion, export revenues
(including Hardware) has reached USD 59.4 billion in FY2011 while domestic revenues
(including Hardware) of about USD 28.8 billion.

AUTOMOBILE INDUSTRY
Automobile, self-propelled vehicle used primarily on public roads but adaptable to other
surfaces. Automobiles changed the world during the 20thcentury, particularly in the United
States and other industrialized nations. From the growth of suburbs to the development of
elaborate road and highway systems, the so-called horseless carriage has forever altered the
modern landscape. The manufacture, sale, and servicing of automobiles have become key
elements of industrial economies. But along with greater mobility and job creation, the
automobile has brought noise and air pollution and automobile accidents rank among the leading
causes of death and injury throughout the world. But for better or worse, the 1900s can be called
the Age of the Automobile, and cars will no doubt continue to shape our culture and economy
well into the 21st century. Automobiles are classified by size, style, number of doors, and
intended use. The typical automobile, also called a car, auto, motorcar, and passenger car, has
four wheels and can carry up to six people, including a driver. Larger vehicles designed to carry
more passengers are called vans, minivans, omnibuses, or buses. Those used to carry cargo are
called pickups or trucks, depending on their size and design. Minivans are van-style vehicles
built on a passenger car frame that can usually carry up to eight passengers. Sport-utility
vehicles, also known as SUVs, are more rugged than passenger cars and are designed for driving
in mud or snow.
In 2007 manufacturing plant in more than 25 countries produced 73.2 million passenger cars
.The automobile is built around an origin various systems supply the origin with fuel, cool it
daring operation, lubricate its moving parts and remove exhaust gases it creates. The origin
produces mechanical power that is transmitted to the automobiles wheels through adverting
which includes a transmission. One or more dive shafts, a differential gear and axles. Suspension
system which include sparing and shock absorbers, customs the ride and help protect the vehicle
from being damaged by bumps heavy loads . Wheel and tares support vehicles on the road way
and when rotated by powered axles, propel the vehicle forward or backward. Steering speed. An
electrical system start and operate the engine monitor and control many aspects of the vehicle
operation and powers such components as head light and radios. Safety features such as bumpers
air bugs and seat belts help protect occupants in an accident.

TELECOM INDUSTRY
The Indian telecommunication industry, with about 600.69 million mobile phone connections as
of February 2010, is the third largest telecommunication network in the worldand the second
largest in terms of number of wireless connections of 563.73 million. The Indian telecom
industry is one of the fastest growing in the world and is projected that India will have 'billion
plus' mobile users by 2015. Projection by several leading global consultancies is that Indias
telecom network will overtake Chinas in the next 10 years. For the past decade or so,
telecommunication activities have gained momentum in India. Efforts have been made from both
governmental and non-governmental platforms to enhance the infrastructure. The idea is to help
modern telecommunication technologies to serve all segments of Indias culturally diverse
society, and to transform it into a country of technologically aware people.

OIL AND GAS INDUSTRY

According to the International Energy Agency (IEA), coal/peat account for nearly 40 percent of
Indias total energy consumption, followed by nearly 27 percent for combustible renewables and
waste. Oil accounts for nearly 24 percent of total energy consumption, natural gas six percent,
hydroelectric power almost 2 percent, nuclear nearly 1 percent, and other renewables less than
0.5 percent. Although nuclear power comprises a very small percentage of total energy
consumption at this time, it is expected to increase in light of international civil nuclear energy
cooperation deals. According to the Indian government, nearly 30 percent of Indias total energy
needs are met through imports
IEA data for 2008 indicate that electrification rates for India were nearly 65 percent for the
country as a whole. In urban areas, 93 percent had access to electricity compared to rural areas
where electrification rates were approximately 50 percent. Roughly 400 million people do not
have access to electricity in India

Chapter 4:BANKING SECTOR

ICICI

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SBI
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IT INDUSTRY
INFOSYS
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TCS
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AUTOMOBILE INDUSTRY
MARUTHI SUZIKI
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TATA MOTORS
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OIL AND GAS INDUSTRY

BHARAT PERTOLEUM
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ONGC
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TELECOM
AIRTEL
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RELIANCE
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