An Short Study on Recession Impact on Fundamental Determinants of Stocks Prices of Bse Listed Companies

Abstract

A global recession is a period of global economic slowdown where significant decline in activity across the economy, lasting longer than a few months. The Global Economic Slowdown bad a recessionary impact on the financial market leading to decline in share prices and indices in India. The objective of this paper is to compare the impact of fundamental factors on Stock prices of BSE listed companies in normal period and recession period. The study employs panel data consisting ofannual time series data over the period 1998-2013 and cross section data pertaining to BSE listed eighty companies. The panel data techniques, viz. Fixed Effects model and Random Effects model have been employed to investigate the objective. The empirical results reveal that Earning per Share has positive and significant impact on the share price at five percent level in the normal period (pre recession period). PER has positive and significant impact while Growth has a negative and significant impact on the share price at five percent level during recession period. While PER and ROCE have positive and significant impact on the share price at five and ten percent level. The variable BY, DPS, EPS, DPR and Growth have a positive relationship with share price and statistically insigni ft cant in post recession period.