No abstract

Empirical evidence indicates that foreign institutional investors (FIIs) play a vital role in financial markets, and being the major players, they demonstrate positive feedback trading behaviour and usually follow one another’s actions. In order to examine this phenomenon, the present study endeavoured to unearth the relationship between foreign institutional investments (FIIs) and returns in the Indian stock market, trading volume and volatility. The return of the Nifty50 index has surrogated market returns, while volatility is represented by conditional volatility computed from Nifty50, from January 1999 to May 2017. The vector autoregression (VAR) results indicate a positive association between herding among FIIs and lagged market returns, while information asymmetry has no impact on herding. On the other hand, previous-day volatility has a significant bearing on the herding measure. Overall, the results portray a significant relationship between herding and stock market returns in India. The results of multivariate regression exhibit that market return was a primary factor for FII herding during the study period under consideration, while trading volume bore no relationship with herding. In case of market volatility, the empirical results are in congruence with the fact that during the period of the volatile market, FIIs prefer to not indulge in herding. Furthermore, the results of three sub-periods, that is, before, during and after the crisis, are similar to the results of the whole study period which indicates that the return is a prime and vital force for herding; on the contrary, market volatility appears to have a negative relationship with herding.

This article investigates the role of price discovery in the Indian stock market by taking into consideration 41 individual securities and Nifty. The present article reports a study based on the daily adjusted closing price of spot and futures for the time period between June 2000 and August 2010 (index) and from November 2001 to August 2010 (individual stocks). To analyze the price discovery role, Engle and Granger’s Residual Based approach, Johansen’s cointegration test and VECM (Vector Error Correction Model) are used. The results depict that futures price series leads the spot price series in case of Nifty and 21 stocks, and 20 stocks’ future price series is led by spot price series. As far as causality is concerned, 14 stocks show feedback causality, 21 stocks including Nifty show unilateral causality and 7 stocks show absence of causality. This study also finds that both the markets, i.e., futures and spot, play an important price-discovery role, implying that futures (spot) prices may contain useful information about spot (futures) prices.

The study investigates the presence of day-of-the-week effect in twenty financial markets in the world. A set of parametric and non-parametric tests is used to test equality of mean returns of the returns across the-days-of-the-week. The results reveal that out of twenty markets, 18 (90 percent) reported their significant highest positive return on the day other than Monday which is consistent with results reported by previous studies on this phenomenon. 1n terms of variability of daily returns across the world market, the results indicates that 75 percent markets experience highest variability in the returns 011 Monday. Further the study exhibited significant differences in average returns across the days of week for seven markets viz.

Financial Literacy has become a priority area across the world in recent years. In a complex and globalized marketplace, a myriad of products is offered in the financial market, and the accessibility of products has also increased. This has made it imperative for individuals to be well equipped with the necessary financial knowledge and awareness to use their financial resources in an optimum way. The study examines the financial literacy of the people by using a questionnaire developed by the Organisation for Economic Cooperation and Development (OECD). The data were collected from 500 respondents from the state of Haryana. The findings reveal that only one-third of the total sample exhibit higher financial literacy. Although the majority of the people possess basic financial knowledge and exhibit positive financial behaviour, 57 per cent of the respondents lack a positive financial attitude. This suggests the need for the introduction of initiatives on the part of policymakers, which may be beneficial in changing the attitudes of the respondents. However, analysis of the socio-demographics suggests that certain factors may prevent persons from being more financially literate. In particular, low levels of income, income instability, and low age are associated with lower levels of financial literacy. The present study offers the first ever comprehensive insight into the financial literacy of the Haryana region.