Determinants of Share Prices: An Empirical Study on the Services Sector in India

Abstract

n the last almost two decades of economic reforms, there has been a paradigm shift in the Indian Capital Market. The secondary market in India has transformed itself completely from a conventional system, plagued with frequent broker-defaults, unlimited risks, bad deliveries and repeat market closures and poor price-discovery to a fully automated system, on the same level as the world's best. In the twenty-first century, India automated trading, expanded the direct reach of major stock exchanges to over 600 centers, dematerialized shares, eliminated unsystematic risks, moved to rolling settlements and introduced derivatives and commodities trading. At the same time, there has been a significant change in the distribution of trading.