Volatility of the international stock indexes: a comparative analysis

Stock prices are changed every day by the market. Buyers and sellers cause prices to change as they decide how valuable each stock is. Basically, share prices change because of supply and demand. Without an efficient stock exchange, the savings of a community, which are essential for economic progress, would be in jeopardy. The year 2008–09 was a dismal year for the stock markets. The global economic conditions deteriorated sharply during the year 2008 with several advanced economies experiencing their sharpest declines. The immediate cause was the declaration of bankruptcy of Lehman brothers; but this was also accentuated by Sovereign debt crisis in many European countries and Japan and the Sub-prime mortgage crisis and the Federal debt of the United States. China is the largest holder of American debt and it is not too concerned that the U.S. can defaults its debt, which adds to the crisis. The world economy experienced a synchronized downturn extending to the emerging markets with steeper fall in output and trade than earlier anticipated. Significant fall in various asset prices, the end of the housing construction boom in a number of countries, fall in consumer and business sentiments weighed on economic activity.

This paper attempts to analyze the Indian stock market vis-a-vis stock markets around the world in this economic backdrop.