A Study regarding Analyzing Recessionary Impact on Fundamental Determinants of Stock Prices in India share market

Abstract

A global recession is a period of global economic slowdown. The Global Economic Slowdown had a recessionary impact on the financial market leading to decline in share prices and indices in India. A significant decline in activity across the economy, lasting longer than a few months. A global recession is a period of global economic slowdown. The objective of this paper is to compare the impact of fundamental factors on Stock prices of BSE 200 companies in normal period and recession period. A sample of eighty companies has been selected for the purpose of the study. 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 BV, DPS, EPS, DPR and Growth have a positive relationship with share price and statistically insignificant in post recession period.

Key Words : Recession, Fundamental, Fixed Effect Model, Random Effect Model, Share Price.