Relationship between stock market indexes: A study of BSE sensex and S&P CNX nifty

Stock price indices are used extensively by investors, brokers and portfolio managers as a general indicator of the stock market conditions. In India BSE Sensex and S&P CNX nifty are the two major indices. The present study aims to study interrelationship between these two indices. For this monthly data of these indices has been taken for the period April 2001 to March 2013. Correlation and regression technique have been used in the study. It is found that both indices are closely related but S&P CNX nifty is more sensitive than BSE Sensex.