Stock Market Volatility - a Comparative Analysis of NSE and BSE

Abstract

The paper analyses the varying perceptions of stock price volatility of lndian capital markets along with identifying possible reasons for volatility and measures the degree of volatility. It is evident from the values of co-efficient of variation and standard deviation that the market capitalize of NSE was highly volatile or less consistent when compared to BSE. There was a great crash in the market prices was on account of Kethan Parekh stock market scam, coupled with bearish trend in the markets apart from various other factors. Number of companies listed has declined abnormally over a decade and the share of NSE as increased significantly and equating with that of BSE listed companies. Olatunji in number of shares traded daily on NSE and BSE varies between 1.90 to 1.24 and 2.00 to 1.32 respectively. This represents that the volatility rate in BSE is greater than that of NSE. Relevance of tJ1e budget on stock price volatility is diminishing every year because of the critical policy decisions are taken on a regular basis by the government.