1Assistant Professor (Finance), Jaipuria Institute of Management, Jaipur, Rajasthan, 302033
2Assistant Professor (Finance), IILM Institute for Higher Education, New Delhi, 110003
3Associate Professor, NIIT University, Neemrana, Rajasthan, 301705
The objective of this study is to investigate the impact of demonetization on the performance of Indian stock market. The study compares the performance of selected sectoral indices during pre and post demonetization period. The Indian stock market has been represented by NIFTY Index and the sample of 9 National Stock Exchange (NSE) sectoral indices representing Auto, Bank, Financial Service, FMCG, IT, Media, Metal, Pharma and Reality sectors. The daily closing price and trading volume of the 10 indices was collected for period of 10th August 2016 to 02nd February 2017 from NSE website. The comparison of closing price and trading volume of the indices in pre-demonetization and post-demonetization period was conducted using independent sample t-test. The results of the study indicated that there was negative impact of demonetization on various sectors of Indian stock market. Due to demonetization, the index values have gone down significantly. In terms of trading volume of the indices, the impact of demonetization is not very significant. The investors are trading frequently in the stock market in post demonetization period
