i am MBA finance student working on summer project . the title is stock market indices : economiy bellweather. please guide me how to go about it
From India , Pune
Hello Minakshi,

You can choose any of the good indices for a base i.e. any sectoral indices / global indices & can start preparing slides on that. For instance, If we take CNX bank index of National stock exchange of india, you would do an analysis of the stock selection criteria under that index and then can do a vivid analysis of how this moves with reaction to the movement of the stocks selected under this bank index.

Inshort, any changes in the economic policy of a country impacts the individual securities. For instance, CRR/SLR hike/slash, Repo,Reserve Repo hike/slash, Interest rate policy, EXIM policy, decision of RBI upon Call money market.
& even when we do an analysis of out of scope of country`s economic ambiance, LIBOR and MIBOR rate fluctuation, FX rate fluctuation ....all these impacts the banking business leading to the clear impact in the bank index.

So by looking at the index construction & analysis of stock selection we can easily reach at the index performance which in short depicts the over all scene of the banking industry in the country.

Please find the attached PPT file for some additional notes.

Many thanks,
Saroj Panigrahi

From India , Pune
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