Stock Market Reforms and Stock Market Performance
Karthigai Prakasam Chellaswamy,
Natchimuthu N and
International Journal of Financial Research, 2021, vol. 12, issue 2, 202-209
This paper analyses the impact of stock market reforms on the stock market performance in India using regression based event-study method. We consider nine stock market reforms introduced from 1998 to 2018. We find that the impact of stock market reforms on Nifty trading volume and Nifty return is different. This paper documents that the impact of the additional volatility measures, T+3 and T+2 settlement cycles, and margin provisions for intra-day crystallized losses reforms show a positive impact on trading volume post-reform. In contrast, internet trading, prohibition of fraudulent and unfair trade practices, delisting of equity shares, substantial acquisition of shares and takeovers listing obligations and disclosure requirements reforms decrease the trading volume post-reform. Our results of Nifty return reveal that the additional volatility measures, the T+2 settlement cycle, the prohibition of fraudulent and unfair trade practices, substantial acquisition of shares and takeovers, listing obligations and disclosure requirements have a significant and positive impact on return post-reform. It is evident that the impact of all nine stock market reforms is insignificant on Nifty return.
Keywords: stock market reforms; stock market performance; event study; regression; nifty; trading volume; return; India (search for similar items in EconPapers)
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Persistent link: https://EconPapers.repec.org/RePEc:jfr:ijfr11:v:12:y:2021:i:2:p:202-209
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