TRANS Asian Journal of Marketing & Management Research (TAJMMR)
Year : 2018, Volume : 7, Issue : 1
First page : ( 18) Last page : ( 28)
Online ISSN : 2279-0667.

Impact of demonetization on the indices of Bombay stock exchange in India

Dr. Vanitha S.*, Deivanai M.**

*Assistant Professor and Research Supervisor, Department of Commerce and Financial Studies, Bharathidasan University, Tiruchirapalli, India. Email id: vanitha@bdu.in

**Ph. D, Research Scholar, Department of Commerce and Financial Studies, Bharathidasan University, Tiruchirapalli. India. Email id: deivanai_789@yahoo.co.in

Online published on 9 February, 2018.

Abstract

The demonetisation is the act which involves current form of money in circulations pulled and new currency is introduced by the government of India. Demonetisation in India was announced by Prime Minister Narendra Modi on 8th November 2016. After the announcement, the market was affected on the next day and there was a severe cash shortage in the country. This was the most unexpected strategic initiative to nullify 86 percent of India's currency. This study focuses on the impact of demonetisation on five selected indices of BSE for the period from 23rd September 2016 to 21st December 2016. The study employs event study methodology in examining the effect of demonetisation on selected stock indices surrounding 60 days of announcement and concluded that there is no significant impact on the selected sample indices due to the announcement of demonetisation. There was a severe cash shortage in the country. The act of demonetisation has also impacted on the stock market. Stock market plays a very important role in the economy of the country

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Keywords

Stock Market, Indices, Demonetisation.

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