1Research Scholar, Department of Management Studies, Pondicherry University, E-Mail: ajinaashok123@gmail.com/Mobile: 9488514592
2Assistant Professor, Department of Management Studies, Pondicherry University, E-Mail: madansaradha@gmail.com/Mobile: 9442314404
Online published on 15 February, 2019.
Stock markets are important parameter reflecting the financial health and economic growth of a nation. Any significant event occurring in the nation will exert an impact on the stock market spontaneously. Government's demonetisation announcement on November 8, 2017, whereby high value currency of Rs. 500 and Rs. 1000 notes were invalidated, is a serious economic event which has attracted many researchers to assess its impact on stock exchanges. This study has made an attempt to assess the impact of demonetisation announcement on sectoral indices of NSE and BSE during short term, medium term and long term, utilising Event Study Methodology. Results of the study has revealed that demonetisation has resulted in negative abnormal returns in both the BSE and NSE. The study approves the fact that demonetisation has come as a surprise and it has exerted a negative impact on the nation's economy in the short run, though it is matter of time before which the nation might limp back to normalcy.
Currency demonetisation, sectoral indices, NSE and BSE
