Causal Linkages and Impact of Finance Companies Stock Price on BSE FINANCE and BSE SENSEX
S. Baranidharan1, N. Dhivya2, A.Alex.3

1S. Baranidharan, Assistant Professor, Department of Business Administration, St. Joseph’s College of Arts and Science (Autonomous),Cuddalore – 607001, India.
2N. Dhivya, Assistant Professor, Department of Management Studies, IFET College of Engineering, Villupuram, India.
3A.Alex, Head of the Department, Department of Bank Management, St. Joseph’s College of Arts and Science (Autonomous),Cuddalore – 607001, India.

Manuscript received on 11 August 2019. | Revised Manuscript received on 15 August 2019. | Manuscript published on 30 September 2019. | PP: 7779-7790 | Volume-8 Issue-3 September 2019 | Retrieval Number: C6323098319/2019©BEIESP | DOI: 10.35940/ijrte.C6323.098319

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Abstract: With the intention of strong growth of existing financial services firms and new entities entries in the market, India has a diversified financial sector undergoing rapid expansion. Finance sector act as a backbone of economy by providing a various financial services such as loan, credit or cash to commercial activities or retail customer. This sector comprises of wide range of industries include banking, insurance, real estate firm, cooperatives, mutual funds, etc. The strength of the financial sector indicates health of the economy in the nation in the contrary weakening economy is typically depends of weak financial sector. Thus the potential growth of the financial sector depends mainly on generating revenue through mortgages and loan that gain value as interest rate drop. The present research aims to determine the variability in the price of stocks in the Bombay stock exchange SENSEX and Bombay stock exchange FINANCE on the selected companies of financial sector such as AB CAPITAL LTD, BAJAJ FINSERV LTD, CAPRI GLOBAL CAPITAL LTD, IIFL FINANCE LTD, JSW HOLDINGS LTD and JM FINANCE LTD by extracting the data from the period of 2nd April 2014 to 30 August 2019. The data has been collected through the website such as and analysed by using the statistical tools such as Descriptive statistics, Correlation, Regression and Granger Causal test. The research work resulted that there is fluctuation in the stock price in the BSE SENSEX and BSE FINANCE will reflect in the changes in the stock price of Finance companies such as AB CAPITAL LTD, BAJAJ FINSERV LTD, CAPRI GLOBAL CAPITAL LTD, IIFL FINANCE LTD, JSW HOLDINGS LTD and JM FINANCE LTD. The study also found that there is a variation among the changes in the stock prices of BSE FINANCE and SENSEX on selected companies of Finance sector. The study helps the institutional and individual investor to make investment decision making. It also provide an information and persuade them to invest in both long term and short term investment by reducing the uncertainty. This research act as guide line for policy makers to make policies.
Keywords: Economic, Investment, Inflation, Price, Institutional Investor, Investment Decision, Policy.
JEL Classifications: A1, D25, P22, E31, G23, G11, F68

Scope of the Article: Classification