Abstract
According to Fama (1970), there were three different forms of pricing efficiency of the market, namely, weak-form of efficiency, semi-strong-form of efficiency, and strong-form of efficiency. In weak-form of efficiency, all historical price and trading volume information were reflected in the current stock prices and the historical price changes could not be used to predict future price movements in any meaningful way if successive stock price changes were independent of one another. This study has attempted to provide analyses of the efficiency of NSE and BSE by using more current daily price data from 1 April 2000 to 31 March 2007. Autocorrelations and runs test were employed for testing the market efficiency of the National Stock Exchange CNX nifty and S&P BSE SENSEX. The main results indicated that Indian stock market has not been efficient in price determination followed the violation of the necessary conditions for an efficient market with a developed financial system.
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