Volatility of Bank Stocks in India during Covid-19

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 the 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 COVID'19 crisis. Economic variables such as the BSE Sensex, rate of exchange, variation in FII (Foreign Institutional Investors), and coupon rate of the 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 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, the G-Sec coupon rate, and the exchange rate. In the second part of the research, the relationship between stock pricesand economic variables varies widely between banks.