Abstract
Investing in the stock market has always been regarded as risky. Market sentiment is a factor that influences stock prices. The purpose of this study is to assess the performance of selected banking stocks based on risk and excess return generated by them during the study period. The study also determines the effect of certain financial variables on sample banking stocks during the time crisis of Covid’19. Economic variables such as the BSE Sensex, rate of exchange, variation in FII (Foreign Institutional Investors), and coupon rate of Government Sector (G-Sec) were analysed in conjunction with the analysis of banking stocks. The regression and correlation tests are used to determine the significance of variables using SPSS. Following the BSE’s performance provides insight into the future modifications throughout the price levels of bank shares. Following a sharp decline in the market, private sector bank stock prices are correct, but not public sector bank stock prices. Throughout the first part of the research, there is a direct relationship between the BSE, Sensex, and the selected stocks, but only a weak correlation with FII, G-Sec coupon rate, and the exchange rate. Along the second part of the research, the relationship between stock prices and economic variables varies widely between banks.
Highlights
The banking sector is often called as the economy's backbone because it is critical to economic development and provides economic reservoirs by individuals, business owners, and sectors in need
We examined the various changes in the banking sector's stock prices during the pandemic period
The fact that the value of HDFC stock is lower than the critical value demonstrates that the Government Sector (G-Sec) rate affects the price of HDFC stock
Summary
The banking sector is often called as the economy's backbone because it is critical to economic development and provides economic reservoirs by individuals, business owners, and sectors in need. Because banking is the core of the business, the banking sector is critical to the smooth operation of all sectors. This sector's financial stability is inextricably linked to the growth of the economy. The business borrows money to meet its working capital requirements and to acquire additional assets. This process generates a two-tier benefit for the economic system by collecting idle money and reinvesting it in productive activities. A rise in interest rates decreases in bank stock values, International Journal of Innovation and Economics Development, Vol 7, Issue 3, pp. 53-61, August 2021
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