EFFECT OF RECESSION ON INDIAN STOCK MARKET

BY: Submitted to: Nimisha Gupta (125) Dr. Tapan Kumar Nayak Pallavi misra (133) Sanjay Kumar Mangla Pratima Gupta (148) Rahul Sharma (164) Rahul Upadhyaya (165) Sachin Kumar (179) FIRST YEAR

PGDM – SEC-C

WHAT IS RECESSION ? Definition: NATIONAL BUREAU OF ECONOMIC RESEARCH. NBER'S defines recession as a "significant decline in economic activity lasting more than a few months”.

GDP growth is negative for two consecutive quarters or more.

RECESSION OR DEPRESSION ?

WHAT CAUSES ECONOMIC RECESSION

INFLATION

Increased production costs. Higher energy costs. National debt.

“This Causes GDP to decline.”

IMPACT OF RECESSIONNon of the listed companies have come with the new IPO during recession.

Retail investors suffers and bears huge losses from the Indian stock market crash.

Mutual industry has also suffered heavy losses.

Stock Market interest:

This chart is giving clear idea about the declining interest among investors on

stock markets. Stock market interest which was peaked during J anuary 2008

and is gradually declining along with falling Sensex.

FII have taken out the money from stock markets because there was an increase in demand of dollars in America during recession.

IT sock indices have not performed well during recession because of the pressure from the U.S. financial services and U.S. economic policies.

Because of the liquidity crunch economic activity decreased i.e. companies not performed well due to this stock market has also not performed well.

Stock market popularity is gradually gaining ground since 2004 and it was

peaked in late 2007. Sensex rise is directly proportional to investor’s

interest and vice versa .