A study of stock market efficiency-an empirical evidence of national stock exchange

The paper analyses the stock market efficiency based on random walk hypothesis in Indian stock market. Both ADF and PP unit root model entails that the Indian stock market index has a unit root and pursues a random walk process. This confirms the efficient market hypothesis of Indian stock market which means that in this market past movements in stock prices cannot be used to predict their future changes and investors cannot formulate various trading rules or techniques to make abnormal returns from transactions in the exchange market. The presence of efficiency in the stock market has important implications for issuers of equity and portfolio investors.