ANALYSIS OF RELATIONSHIP LEVEL BETWEEN SELECT STEEL COMPANIES AND NIFTY
Dr.P.Karthikeyan, Associate Professor of Management Studies,Periyar University PG Extension Centre, Dharmapuri 636701, T.N, India
E-mail: karthikeyanmbansr@gmail.com
N.A.Mala, M.Phil (Full-Time) Research Scholar in Management, Periyar University PG Extension Centre, Dharmapuri – 636701, T.N.India
E-mail: malacbe@gmail.com
ABSTRACT
Steel industry has very rapid growth in the industrial sector and rising infra expenditure projects in railways, roads and highways etc. It has strong export demand and signs of revival in the domestic sales. There are many issues that affect the indices of the stock market.This study examines the short run dynamic relationship between steel price-behavior with Nifty through correlation model. The secondary data is used in this study from November1,2017-January 31, 2018 closing stock price of selected companies has been collected. It is concluded that there is a positive correlation between steel prices and Nifty index.
KEY WORDS:Steel Industries, Stock Price, Correlation, Nifty, NSE India.
INTRODUCTION:
Stock market is used by the investors to know the index value and evaluate their portfolio by the indices as benchmark and compare and forecast the future movements.The research study is made to analyze the interrelation between select three steel companies and Nifty. An investor can reduce portfolio risk simply by holding instruments which are not perfectly correlated and they can diversify their holdings.The correlation coefficient willalways be between -1and 1.A positive correlation coefficient means the two variable moves in the same direction as one increasethe other also increases and
vice-versa.
OBJECTIVES OF THE STUDY:
1. To study the relationship between the select steel companies and Nifty.
2. Evaluate theportfolio and reduce the risk of the investor by the researcher suggestion.
3. To find the Net Profit of the select Steel companies
LIMITATION OF THE STUDY:
The period of the study is from November 1st 2017 to January 31st2018(i.e) Period of three months.
RESEARCH METHODOLOGY OF THE STUDY:
Type ofresearch:Exploratory research
Source of data:Secondary data from NSE India official website
Data Analysis: Pearson’s Correlation through SPSS System.
The data collected are secondary data from the NSE India, the closing of the steel share prices and closing Niftywere taken for the study.
RESULTS OF ANALYSIS AND DISCUSSIONS:
Based on the NetProfit, JSW Steels ranks I with Rs.3576 Crore, TataSteel ranks II with 3444Crore and Jindal(Hisar) ranks III with 218Crore.
| .TABLE-1 STEEL INDUSTRIES ON THE BASE OF NET PROFIT (Based on 2016-2017)
Soures: Money control.com TABLE- 2 CORRELATION BETWEEN SELECT STEEL COMPANIES AND NIFTY 50 (Period From November 1,2017 to January 31,2018)
As per the research undergone by the researcher, there is a positive correlation between top three Steel industries (Tata Steel, JSW & Jindal) and the Nifty Index. So, the increase of the share prices of the Steel companies is positively correlated to the Nifty Index.From the analysis The JSW Steels is positively correlated with Nifty by 0.881 and Tata Steels is positively correlated by 0.880 The Jindal Steels is correlated positively by 0.908, with Nifty 50. | ||||||||||||||||||||||||||||||||
| |
CONCLUSION:
By using NSE India data from November 1,2017to January 31,2018, an effort is made to investigate the relationship of top Steel companies and Nifty index. It is inferred that the Nifty varies with the stock price of the Steel companies accordingly (i.e) increase or decrease in the equity price. Longtime investigation can give more reliable and strong results for the investors.
REFERENCE WEBSITES:
ü Google Finance
ü Moneycontrol.com
ü NSE India
REFERENCES BOOKS:
v Prasanna Chandra,” Investment analysis& Portfolio Management”, New Delhi,
v The McGraw Hill Company Ltd.6th edition.2006
v Kothari C.R.” Research Methodology”,New Delhi, New Age International Pvt. Ltd Publisher,2nd Edition, 2004
ANNEXURE
STEEL COMPANIES EQUITY PRICES NIFTY 50
(Period from November 1,2017tto January 31,2018)
| Date | Tata Steel | JSW Steel | Jindal(Hisar) | NIFTY |
| 1/11/2017 | 673.84 | 264.75 | 228.9 | 10440.5 |
| 2/11/2017 | 672.7 | 266.2 | 234 | 10423.8 |
| 3/11/2017 | 675.37 | 266.6 | 232.05 | 10452.5 |
| 6/11/2017 | 673.37 | 268 | 229.4 | 10451.8 |
| 7/11/2017 | 660.41 | 264.05 | 217.05 | 10350.15 |
| 8/11/2017 | 660.36 | 262.45 | 214.75 | 10303.15 |
| 9/11/2017 | 670.13 | 264 | 216.65 | 10308.95 |
| 10/11/2017 | 669.03 | 270.8 | 216.05 | 10321.75 |
| 13/11/2017 | 658.36 | 263.85 | 217.2 | 10224.95 |
| 14/11/2017 | 653.08 | 266.55 | 209.7 | 10186.6 |
| 15/11/2017 | 645.69 | 255.45 | 200.3 | 10118.05 |
| 16/11/2017 | 653.89 | 258.65 | 197.5 | 10214.75 |
| 17/11/2017 | 668.03 | 266.6 | 209.4 | 10283.6 |
| 20/11/2017 | 668.94 | 265.95 | 214.8 | 10298.75 |
| 21/11/2017 | 677.7 | 268.85 | 221 | 10326.9 |
| 22/11/2017 | 677.42 | 268.55 | 219.35 | 10342.3 |
| 23/11/2017 | 678.99 | 266.85 | 216.25 | 10348.75 |
| 24/11/2017 | 674.94 | 265.2 | 220.4 | 10389.7 |
| 27/11/2017 | 669.32 | 258.9 | 219.55 | 10399.55 |
| 28/11/2017 | 670.56 | 255.65 | 217.7 | 10370.25 |
| 29/11/2017 | 675.75 | 255.25 | 217.6 | 10361.3 |
| 30/11/2017 | 661.32 | 254.85 | 210 | 10226.55 |
| 1/12/2017 | 648.69 | 252.05 | 207 | 10121.8 |
| 4/12/2017 | 655.27 | 251.85 | 210.1 | 10127.75 |
| 5/12/2017 | 643.74 | 247.7 | 210 | 10118.25 |
| 6/12/2017 | 636.02 | 242.15 | 213.1 | 10044.1 |
| 7/12/2017 | 655.46 | 250.85 | 215.7 | 10166.7 |
| 8/12/2017 | 664.79 | 252.45 | 214.75 | 10265.65 |
| 11/12/2017 | 666.46 | 251.5 | 209.9 | 10322.25 |
| 12/12/2017 | 657.22 | 249.95 | 204.85 | 10240.15 |
| 13/12/2017 | 648.65 | 244 | 213.95 | 10192.95 |
| 14/12/2017 | 650.31 | 242.45 | 212 | 10252.1 |
| 15/12/2017 | 661.84 | 250.9 | 210.8 | 10333.25 |
| 18/12/2017 | 671.37 | 253.95 | 207.45 | 10388.75 |
| 19/12/2017 | 676.61 | 256.4 | 208.45 | 10462.2 |
| 20/12/2017 | 669.56 | 262.1 | 209.05 | 10444.2 |
| 21/12/2017 | 680.8 | 265.3 | 228.45 | 10440.3 |
| 22/12/2017 | 677.56 | 264.5 | 229.35 | 10493 |
| 26/12/2017 | 687.52 | 267.4 | 231.35 | 10531.5 |
| 27/12/2017 | 689.23 | 265.45 | 227.55 | 10490.75 |
| 28/12/2017 | 701.43 | 271.3 | 228.35 | 10477.9 |
| 29/12/2017 | 697.76 | 269.8 | 225.8 | 10530.7 |
| 1/1/2018 | 688.04 | 265.8 | 206.2 | 10435.55 |
| 2/1/2018 | 694.8 | 264.55 | 203.4 | 10442.2 |
| 3/1/2018 | 700.19 | 268.7 | 219.55 | 10443.2 |
| 724.29 | 265.8 | 244.55 | 10504.8 | |
| 5/1/2018 | 734.25 | 285.1 | 239.05 | 10558.85 |
| 8/1/2018 | 732.39 | 286 | 256.45 | 10623.6 |
| 9/1/2018 | 735.77 | 284 | 248.75 | 10637 |
| 10/1/2018 | 736.29 | 282.8 | 262.4 | 10632.2 |
| 11/1/2018 | 734.48 | 282.55 | 267.35 | 10651.2 |
| 12/1/2018 | 733.82 | 286.8 | 264.85 | 10681.25 |
| 15/1/2018 | 746.44 | 285 | 267.3 | 10741.55 |
| 16/1/2018 | 729.53 | 281.2 | 270.7 | 10700.45 |
| 17/1/2018 | 737.39 | 285.05 | 269.7 | 10788.55 |
| 18/1/2018 | 716.19 | 279.8 | 264.35 | 10817 |
| 19/1/2018 | 717.38 | 282.1 | 264.15 | 10894.7 |
| 22/1/2018 | 726.62 | 278.65 | 263.75 | 10966.2 |
| 23/1/2018 | 742.87 | 294.05 | 290.75 | 11083.7 |
| 24/1/2018 | 726.05 | 288.65 | 276.5 | 11086 |
| 25/1/2018 | 732.77 | 290.8 | 280.2 | 11069.65 |
| 29/1/2018 | 746.11 | 293.45 | 266.05 | 11130.4 |
| 30/1/2018 | 739.15 | 289.1 | 268.35 | 11049.65 |
| 31/1/2018 | 705.05 | 289.95 | 266.45 | 11027.7 |
