<p class="MsoBodyText2" style="margin: 0in 34.2pt 0pt 0.5in;"><span style="font-size: 10pt;"><span style="font-family: Times New Roman;">This paper examines the empirical association between stock market development and economic growth for a period of ten years around the Indian market &ldquo;liberalization&rdquo; event.<span style="mso-spacerun: yes;">&nbsp; </span>We find no support for the hypothesis that the Indian stock market development is associated with the economic growth in that country during the entire event study period of 1981 to 2001.<span style="mso-spacerun: yes;">&nbsp; </span>We find support for relevance of stock market to econmic development during the pre-liberalization sub-period.<span style="mso-spacerun: yes;">&nbsp; </span>We also find a negative correlation between stock market development and economic growth for the post-liberalization period.<span style="mso-spacerun: yes;">&nbsp; </span>We offer a number of hypotheses consistent with the inverse relationship between growth and stock market development in the post-liberalization period.<span style="mso-spacerun: yes;">&nbsp; </span>In particular, our results are consistent with the suggestion that the Indian Stock market is a casino for the sub-period of<span style="mso-spacerun: yes;">&nbsp; </span>post liberalization and for the entire ten-year event study period.</span></span></p>

Financial markets are highly sensitive to the flow of information. The nature and arrival of information impact the price of gold. Gold, an international commodity, is traded across the world. Hence, the size and sign of information in any one country may be expected to affect the international gold price fixation. The objective of the study is to analyse the information spillover and the leverage effect transmitted from major gold consuming countries to the fixation of London Bullion Market Association (LBMA) AM fix and PM fix prices and how significantly the information of Indian market contributes to the price fixation. The multivariate exponential generalized autoregressive conditional heteroscedasticity (EGARCH) model proposed by Koutmos and Booth ( 1995 , Journal of International Money and Finance, 14(6), 747–762) is used to analyse the daily spot gold price data of major gold consuming countries like India, the USA, Europe and Japan. The results concluded that price and volatility of major gold consuming countries spill over to the LBMA AM fix and PM fix prices. LBMA AM fix and PM fix prices are sensitive to the new information and their price movements are significantly influenced by the information from India and the USA. The leverage effect shows that positive information causes more volatility in the LBMA fix prices than negative information. The study suggests that the investors, bankers, wholesalers and retail customers who depend on LBMA fix prices as a benchmark price can predict them by utilizing the information received from the Indian and US markets. They can specifically look for positive news than the negative news, as they have more impact on the spillover effect.

This study is to estimate optimal hedge ratio with the variables from Indian futures and spot market and also nineteen individual stock prices. Diagonal VEC-GARCH model is used for the period from June 2000 to June 2011. The Empirical results confirm that there is effective risk sharing and hedging processes in Indian futures market. It is also found that Indian futures and spot markets have strong causal relationship; which allows the trader to make perfect arbitrage process and hedge their risks.

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This study investigates the relationship between the Indian gold price and the real exchangerates of major international currency and how does Indian gold price reacts to the exchange rates of thesecurrencies. The data set consists of monthly gold prices from Indian market and the real exchange rates ofmajor currencies like USD, Euro, Yen and INR for the period from 1994:01 to 2011:12. The relationship andreaction is tested through the Johansen cointegration test, Granger causality test and VAR models like Impulseresponse function and Variance Decomposition. It is found that the Indian gold prices have long runrelationship with the real exchange rates of major currencies and it is also found that the Indian gold prices arecaused by the real exchange rate of Yen but the vice versa does not exist. The Indian gold prices reactpositively to the shocks from Yen and negatively to the INR.