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The central goal of this paper is to study the small sample properties of non-parametric multiple variance ratio tests and the runs test and to apply suitable tests on the daily data of the stock prices of Indian sectoral indices to study their martingale behavior. We have also used moving a subsample approach to examine the dynamic behavior of the test statistics. This helps us to identify the sensitivity of results to a particular sample period and to obtain inferential findings robust to possible structural changes and presence of influential outliers. Joint sign test turns out to be better than other tests for sample size less than and equal to 1000. Our results provide evidence against the weak-form efficiency of all the sectoral indices, except for CNX IT. According to our analysis based on the moving sub-sample approach, except for BANK NIFTY and CNX INFRA, all the other indices have become more efficient after the sub-prime crisis. [ABSTRACT FROM AUTHOR]

In this paper, we study the effect of foreign institutional investment (FII) on the stock market of India and find that FII has a direct and significant effect on the returns of the Indian stocks. We also examine the determinants of the FII in Indian markets and find that net FII increases with an increase in the Indian stock returns and vice versa. We also document that high interest rates in India result in reduced FII, and the net FII increases with a decrease in the P/E of Indian stocks. Strong dollar lowers net FII, and high inflation in the U.S. results in reduction of net FII in India. We investigate the role and impact of FII whether they stabilize or destabilize the domestic markets. Whether the Indian stock market is influenced by the FIIs in a position or negative is determined. The FIIs has a statistically significant influence on the stock market returns, even after fundamental economic factors are controlled is finally investigated along with the factors responsible for purchasing and selling decisions by FIIs to reduce erratic investment patterns. [ABSTRACT FROM AUTHOR]

The paper seeks to explore possible volatility transmission mechanism within the economy, if any for Indian stock market in recent years. Specifically, it tries to explore whether sectoral shocks are being transmitted to the market and vice versa. The capital goods and the consumer durable sectors are the two most predominant sectors, their contribution to the volatality of SENSEX being the most. Among the major findings, this paper discerns that market to sector volatility transmission has been more prominent in case of BSE SENSEX than BSE200; while sector to market volatility transmission has been more significant in case of BSE200. Most of the market volatility is coming from the variability in capital goods sector and consumer durable sector. However, the IT sector has an insignificant impact on market volatility and its variability is hardly influenced by that of market. Hence, even in this era of globalization, IT sector remains an isolated sector, while traditional sectors remain the most important ones. [ABSTRACT FROM AUTHOR]

With increasing doubts over the capabilities of the existing asset pricing models, Fama and French in the 1990s, developed the Three-Factor Model (TFM) as an extension to CAPM with two added premiums: size and value. This paper applies TFM theory to India to provide an insight into its validity in an emerging market.A priori information requires all three variables to show a significant positive relationship with excess returns but in this study, results indicate a number of discrepancies. The regressions find many coefficients insignificant and in some cases, show negative relationships between excess returns and the size and value premiums. The value premium particularly, appears negative for lower beta portfolios questioning the stability of the variable across beta values. The regressions represent high explanatory power but like in literature, this may be attributable to survivor bias or data snooping. Thus, it can be concluded that TFM is not a good fit in India over the chosen sample period. [ABSTRACT FROM AUTHOR]

This paper examines the impact of introduction of derivative securities on volatility of underlying stocks and index. Though the empirical evidence in international arena is mixed, the results of this study support the declining volatility hypothesis in context of the Indian stock market. It also indicates that derivatives have stabilizing effect and their introduction has led to decline in volatility of underlying assets. The findings have largely remained the same when volatility has been examined with different diagnostic tools or for different sample periods. Finally, these findings provide rationale for introduction of futures and option contracts on more stocks as they contribute to enhancing the efficiency of underlying stock market. The study has important policy implication on the derivatives markets. The study making a favourable case of empirical evidence for deepening the derivatives segement in India. [ABSTRACT FROM AUTHOR]

Evidence of inefficiencies existing in the Indian Stock Market has once again generated interest in technical analytical methods, which attempt to achieve superior returns based on past price movements. This paper tests and describes the applicability of trading rules in the Indian stock market under the present scenario with a ban on short-selling. It also analyses the effect of transaction costs on the prospective returns for an individual investor and the utility of a percentage band to remove erroneous Whiplash signals. The paper further explores and hypothesises that individual investors should be able to outsmart the market post-transaction-costs using longer moving averages which represent long-term market cycle trends, since these will involve low transaction costs but such gains are likely to be achieved over long cycle times since longer moving averages capture long cycle trends. [ABSTRACT FROM AUTHOR]

This paper investigates the interaction between institutional investment and market return in Indian stock market. We have used daily net investment data of Foreign Institutional Investors (FIIs) and Mutual Funds (MFs) from January 2000 to December 2009. Empirical result has shown that FIIs investment is positively related to lagged market return whereas MFs investment is negatively related to lagged market return. Bi- directional causality is found between FIIs investment and market return whereas in case of MFs only market return causes the investment. Impulse response analysis confirms that impact of shock to market return is more lasting on institutional investment than otherway round. Sub- period analysis confirms that relationship between FIIs flows and market return did not change significantly during the study period in comparison with MFs. [ABSTRACT FROM AUTHOR]

The present paper endeavors to empirically investigate the long run equilibrium relationship between the stock market of India, U.S., China, Singapore and Germany with special emphasis on evaluating the influence of U.S. based global financial crisis (2008) on this long run relationship. This exercise is based on the monthly closing data of the stock market indices for all the selected countries. Single equation Engle-Granger co-integration approach has been applied to examine one to one relationship of Indian stock market with the stock markets of other countries. The influence of U.S. financial crisis (2008) has been seen with the help of dummy variables. Apart from single equation analysis, another approach called multivariate approach given by Johansen and Juselius(1988,1991) is employed to study long run relationship among all the stock markets which suggests that co-movements of stock prices among the selected countries has increased after the 2008 financial crisis. [ABSTRACT FROM AUTHOR]

The Ordinary Least Square (OLS) estimate of beta has been widely sed as a measure of systematic risk in investment and portfolio analysis. The estimation is based on the assumption that beta is stationary over ime. But numerous studies show that beta is unstable over time. So the use of OLS method in investment and portfolio analysis will yield an nefficient estimate of systematic risk. Considering beta as a random variable this paper attempts to give an estimate of beta coefficients with he help of Bayesian approach where prior distribution of beta is considered as uniform and truncated normal. The result of the study clearly shows the difference in the estimation of beta by the traditional OLS beta and Bayes estimator. By looking at differences between the Bayesian and OLS estimator it is hard to decide which are safer risks one can take for investment decision are. There is a scope to obtainan interval where beta is supposed to be safer for investment decision. [ABSTRACT FROM AUTHOR]

The present paper is aimed at checking weak form of efficiency hypothesis for Indian stock market by using daily data for Bombay Stock Exchange, Sensitive Index (sensex) for the period July 1, 1991 to Dec. 29, 2006. The Indian stock market indicated efficiency as random walk hypothesis for sensex is accepted. The results of variance ratio test and unit root test are similar and accept the random walk for Indian stock market but the results from autocorrelation and Ljung Box (QLB) test reject the hypothesis of random walk. Since variance ratio test is more powerful than the other tests performed in the study, we go by the results of variance ratio test. The volatility persistence is due to the asymmetry in the availability of publicly available information other than historical prices of stock indices and private information, which is generally withheld by select groups such as mutual funds, management, financiers and stock exchange officials. [ABSTRACT FROM AUTHOR]

This paper presents an empirical study on predictability in the Indian stock market, based on cointegration analysis involving a stock price index and relevant macro and financial variables. This exercise has been done separately for each of the three most important stock indices viz., BSE SENSEX, BSE 100 and NIFTY. Following essentially Johansen's approach, our findings based on the trace and maximum eigenvalue tests indicate that there exist cointegrating relations involving a stock index and the following macro variables viz., domestic industrial production, consumer price index, nominal exchange rate, foreign direct investment and long-term interest rate. Further, the cointegrating relations corresponding to each of the three stock indices involve the same set of macroeconomic variables as stated above. None of the other variables considered in this study viz., and the financial ratios has been found to be significantly involved in the cointegrating regressions. [ABSTRACT FROM AUTHOR]

The paper re-visits the stock market reforms with respect to its effects on corporate financing and savings. On account of factors, such as booming stock market and high cost of credit, the corporate financing changed from equity financing during the mid-1980s to debt financing during the mid-1990s. Earlier finding showed that expansion in stock market financing during the 1980s was neither associated with a rise in aggregate GDS nor with an increase in the proportion of financial savings. It is observed that movement of household savings towards stock market did not merely represent a reallocation of households' funds from bank deposits to stock market instruments. It was also accompanied by a rise in the share of aggregate GDS in GDP. Further, while the household sector was more responsive to the stock market reforms from the mid-1980s to the early years of economic reforms, the corporate sector showed greater responsiveness during the post-reform years. [ABSTRACT FROM AUTHOR]

In this paper, we find that there exists a nonlinear relationship between futures and cash indexes. Within the arbitrage bounds, the change in- basis can affect prices in both markets and a significant feedback relationship between futures and cash markets is noted. Besides, price discovery is not evident in the futures markets due to almost the same speed of information flows in both markets. While outside the arbitrage bounds, the influence of the change in basis on both futures and cash indexes is statistically insignificant and the change in the futures price leads the cash price, thereby indicating notably the function of price discovery in the futures market. As a result, the Bivariate model that allows for dynamic interrelationship between futures mid cash prices is better than the traditional one in revealing both the price discovery of futures and cash indexes and arbitrage behavior within and outside the arbitrage bounds. [ABSTRACT FROM AUTHOR]

The paper aims to present theoretical framework of efficiency of stock markets and test the Indian stock market for weak form efficiency. Statistically, the study shows that Indian stock markets are weak form efficient and price changes follow a random walk. Data for the period 1st April 2005 to 31st march 2007 has been used for Sensex and Nifty. For other BSE indices and individual share prices, data for one year from 1st April 2006 to 31st March 2007 has been used. Though no tests of trading rules have been carried out, statistical independence of price changes does imply that trading rules based on technical analysis can not be used to earn excess risk adjusted returns. Increasing investor interest in emerging markets has motivated a great deal of research aimed at understanding the return risk characteristics of stock prices in these markets. [ABSTRACT FROM AUTHOR]

The purpose of current study is to investigate whether a stock split is still considered a policy that creates value for the underlying company and the rational behind such action for companies listed on the BSE-sensex. The event study methodology of Strong is employed to examine the effect of stock split ex-date on stock prices. This paper examines the effect of stock split on return and liquidity for the stock performing the part of the BSE Sensex around the Ex-date. Empirical evidence suggests that stock splits are associated with positive abnormal return on the day of the stock split Ex-Date as well as on the day following the Ex-date. Thus the result indicates that market registers an increased activity in the stock near the Ex-dates of stock split when it associated with liquidity we can observe a clear trend of measuring liquidity as measured by increased turnover around the event date. [ABSTRACT FROM AUTHOR]

The segmentation scales derived from the systematic risk contributions of the countries to the world market index indicate, some degrees of segmentation in global equity markets. However, there is an increased trend toward integration. The beta coefficients and cross correlations of dollar returns verify these findings, We observe a contagion effect in 1990s and cointegration effect for developed countries and emerging markets within their own subsets. The degree of integration for emerging markets is much less than that of developed countries. Emerging markets still keep their importance for the global equity portfolios. The paper show that the degree of segmentation in the global equity markets across countries and cross developed continues vs. emerging markets are not the same and benefits of global diversification still continue. [ABSTRACT FROM AUTHOR]

The paper analyzes the varying perceptions of stock price volatility of Indian capital markets along with identifying possible reasons for volatility and measures the degree of volatility. It is evident from the values of co-efficient of variation and standard deviation that the market capitalization of NSE was highly volatile or less consistent when compared to BSE. There was a greater crash in the market prices was on account of Kethan Parekh stock market scam, Coupled with bearish trend in the markets apart from various other factors. Number of companies listed has declined abnormally over a decade and the share of NSE as increased significantly and equaling with that of BSE listed companies. Volatility in number of shares traded daily on NSE and BSE varies between 1.90 to 1.24 and 2.00 to 1.32 respectively. This represents that the volatility rate in BSE is greater than that of NSE. Relevance of the budget on stock price volatility is diminishing every year because of the critical policy decisions are taken on a regular basis by the government. [ABSTRACT FROM AUTHOR]

In an attempt to examine the market efficiency and volatility of stock market, forex market and bullion market in India during the last one year (October 2003 to September 2004). This paper suggests that stock, forex and silver markets are efficient compared with gold market; but at the same time gold is the lowest volatile market. Absence of a large number of participants to influence movement in the prices call be the reasons for lower degree of efficiency ill the gold market. Lower volatility of gold market maybe judge by the fact that gold has the characteristic of currency ill the global market and the Reserve Bank of India take regulation and supervision when it is necessary. On the other hand forex market, which is observed to possess lower degree of market efficiency next after gold, is the highest volatile market. Higher volatility in the forex market does not imply stability in the financial market as a whole because funds flow from one market to another. This might play an adverse effect in promoting industrialization and growth in our country in the long run. [ABSTRACT FROM AUTHOR]

Theoretically, the stock markets are considered as rational and efficient institutions. However, instances of mass hysteria occur when stocks are massively overvalued by the experts and investors leading to disastrous stock market crashes. Predicting the behaviour of stock markets is perhaps one of the most difficult task. Present paper examines the existence of size anomaly in Indian stock market and suggests a trading strategy that could help an investor earn superior returns. A sample of 240 BSE listed companies over a period of six years (September 1996 to September 2002) has been taken. The empirical results undisputedly indicate that the small size firms outperform the larger firms not only on the basis of raw returns, but also on the basis of risk adjusted performance measures. The study indicates existence of size anomaly as the smallest decile has earned four times the mean return of the highest. It also indicates a descending stair-step pattern in the return distribution of different Size portfolios. [ABSTRACT FROM AUTHOR]

The relevance of beta as a measure of risk depends on the stationarity of beta over rime. The paper discusses the stationarity of beta in the Indian capital market using a sample of thirty eight equity securities listed in the Stock Exchange Mumbai. The study uses weekly closing prices from May 11, 1990 to February 6, 1996. The average beta based on Sensex is .8634 and based on BSE100 index is .7398 and no security has negative beta. The market explains roughly 5 to 60 percent of the variance in the individual security returns. Product Moment Correlation and Rank Order Correlation show that the betas are not stationary over rime and hence beta cannot be used as a measure of future risk for individual securities and small portfolios. The paper, further, finds that the betas have the regression tendency of moving towards the mean beta of 1. [ABSTRACT FROM AUTHOR]

Equity derivatives have become popular financial products in Indian capital markets since 2003. Trading on derivatives tend to make the underlying spot markets more liquid and informationally efficient. Despite the financial crisis in the year 2008 the turnover in derivative market was 4 times then that of spot market. Volatility impact has been examined with the help of asymmetric GARCH model. GJR GARCH (1, 1) was used to model the heteoroskedasticity and examine the changes in the post introduction period. It is been found that the individual stocks became less volatile in the post introduction period in the short term more precisely in the following 2 years period. The decomposition of observed volatility indicates that the recent news as well as the past news exhibit greater impact on the stock prices in the post introduction period. Volatility persistence also increased substantially in the post introduction period. [ABSTRACT FROM AUTHOR]

The perception is that under the existing global economic structure and developments the global stock markets of most countries are becoming gradually more integrated. Indian markets are no more exception to these developments and in India the issue is also gaining attention in the post liberalization era. With this background, the research aims to examine the common perception of global integration from an Indian stock market perspective. The investigation was carried out, in the first instance, in a straightforward way. The aim was to ascertain whether the Indian stock market is integrated with three Asian markets, namely Hong Kong, Singapore, and Japan and the four other global markets of the USA, UK, Germany and France, perceived to be driving Indian stock prices. Based on monthly data series from April 1992 to March 2009 both the long-run relationships and the short-run dynamics operating between the seven markets under the global economic and financial system were studied. The findings of the study suggest that Indian stock markets are very much integrated with other global markets in short run but less integrated in long run. [ABSTRACT FROM AUTHOR]

The present study examines the impact of futures trading on contemporaneous and intertemporal relationships between return, volume and volatility in Indian stock market using daily data of closing prices and volume of Nifty index from January 1997 to June 2006. The results of ARMA (3,2), GARCH (1,1), EGARCH (1,1) and Granger causality test indicate the presence of information asymmetry, inefficiency and leverage effect in Indian stock market. However, after the introduction of futures the quality of information flowing has improved to the cash market. The inefficiency in market can be attributed to the asymmetric profile of traders in two markets. The results show the introduction of futures trading has significantly altered the structure of return, volume and volatility relationship. Specifically, while there is evidence of more information flowing into spot market following the onset of trading, this new information is assimilated into prices less rapidly than before the onset of trading, leading to an increase in the persistence of volatility. [ABSTRACT FROM AUTHOR]

The three factor Fama-French (1993) model was tested for the Indian stock market from 1991-2002 including four sub periods. Together the three factors, excess return over market, returns on small minus big stocks, and returns on high minus low book to market ratio stocks, are able to explain the returns better than any single factor or combinations of two factors. The market factor had the highest correlation with returns, while the size factor was dominant in explaining the cross section of returns. However, the importance of the market factor reduced steadily, while the correlation, with size increased to some extent. The impact of the three factors on various portfolios reduced from 95-98% to 55-88% over the period studied. The study revealed that three factors, excess return over market return SMB and HML are together able to explain the return better than any single factor or a combination of factors. [ABSTRACT FROM AUTHOR]

The present study has undertaken a comprehensive investigation of co-movement in stock returns and volume change using daily National Stock Exchange data for twenty-one listed firms from 1996 to 2005. It is observed that the direction of causality between stock returns and volume change vary over different periods and across firms. Generally there are causal relationships between volume and price over the full period. Once we take the three sub periods the relationship starts to weaken over the sub periods for most of the stocks. The study further indicates that most of the companies do not show long-term spillover effect on volatility as evident generally in short run. However, some major players in Indian stock market show evidence of long-term spillover volatility effect. The study indicates towards the presence of inefficiencies on the National Stock Exchange, which weakens in the later sub-period. [ABSTRACT FROM AUTHOR]

The Indian stock market is one of the earliest in Asia being in operation since 1875, but remained largely outside file global integration process until the late 1980s. This paper empirically investigates the long-run equilibrium relationship and short-run dynamic linkage between the Indian stock market and the stock markets in major developed countries after 1990 by examining the Granger causality relationship and the pairwise, multiple and fractional cointegrations between the Indian stock market and the stock markets from these three developed markets, Indian stock market is integrated with mature markets and sensitive to the dynamics in these markets in a long run. In a short run, both US & Japan Granger causes the Indian stock market but hot vice versa. Further it is found, Indian stock index & the mature stock indices form fractionally cointegrated relationship in the long run with a common fractional, nonstationary component and find that the Johansen method is the best reveal their cointegration relationship. [ABSTRACT FROM AUTHOR]

Phenomenal growth has been observed in the Indian Stock Market because of domestic and international investments much to the credit of first and the second phase of reforms in the financial sector. The study tests the volatality of the Indian Stock Markets to foreign institutional flows in equity markets using two indices of the country largest and prominent stock exchnages viz. BSE and NSE. The indices so chosen are S & P CNX Sensex and Nifty. The assessment is made for a period of eleven years from January 2000 to December 2011. Findings indicate significant impact of FII flows on the Indian stock market. It is found that FIIS were net sellers in year 2008 and 2011 and these were the worst years for the stock markets. Fils remained the key mover and shakers of the market especially on account of the global financial crisis. [ABSTRACT FROM AUTHOR]

Financial integration world over has changed the flow of investments and returns. Several studies world over indicate that range of financial and macroeconomic valuables have had a role in predicting stock market returns. This study explores internal financial integration among different segments of the Indian Financial sector using time series modeling. In the study, weekly data has been used from October, 2005 to October, 2009 for the selected variables representing different segments of financial system in India. From the estimated cointegrating equation, Nifty is found to be influenced in the long-run by the broad money supply, gold price and FII. The causality test, which exposes the short-term relationship, reveals however that Nifty has a positive significant association with the FII and Inflation rate, which was somehow exposed too in the literature. After application of all other techniques like VAR and VECM, integration of stock market with the selected variables is established. [ABSTRACT FROM AUTHOR]

We fill a gap in the finance literature by re-examining the performance of value and growth strategies in India. Fama and French (1998) note that stock returns in India increase with market capitalization and price-to-earnings ratio (P/E). Their emerging market data are limited, however, and their counter-intuitive results for India markets are neither statistically nor economically significant. We use a large and recent data set, and we are surprised to find that Fama and French's odd results have maintained their sign and strengthened dramatically. In particular, we find that stock returns in India increase strongly with both market capitalization and P/E, and decrease strongly with dividend yield. International investors need to beware that India markets do not follow the patterns that we have seen in most other markets, and that growth beats value on the Bombay Stock Exchange. [ABSTRACT FROM AUTHOR]

Two fundamentals, which affect the investment decisions of a rational investor, are risk and return. The study examines the application of CAPM in estimation of the systematic risk and expected returns of a sample of Bombay Stock Exchange listed sixty stocks. All the stocks are from Drug industry with different market capitalization and the sample period ranges from 2001 through 2007. The research methodology involves the use of regression for estimation of the alpha and beta value of the stocks and portfolios. Further 't' test and 'z' test are used to test the statistical reliability of the stocks and portfolios parameters. The study holds CAPM good in Indian stocks market in explaining the systematic risk of the Drug stocks and establishing the trade off between risk and return. It reports the linear and propotional relationship between portfolio risk and portfolio return in the line of CAPM postulation. [ABSTRACT FROM AUTHOR]

Among all the emerging countries, Indian equity markets are thought to be the biggest in terms of size, trading volume, capitalization, and thus levels of market efficiency. This study employs the Simple Moving Average (SMA) and the Displaced Moving Average (DMA) trading rules to test the weak form efficiency of the Indian equity markets. The indicators were applied on the S&P CNX Nifty, BSE Sensex as well as multiple individual stocks for a time period spanning 15 years (1991-2005). The results provide sufficient evidence that the DMA indicator is a highly successful trading rule that generated profitable signals even after adjusting for transaction and other costs. Hence, the results question the belief of market efficiency, of emerging markets. [ABSTRACT FROM AUTHOR]

Study investigates and identifies the adequate densities for fitting distribution of first difference of change in log prices of stocks. Four different ways are adopted to test whether the first difference of log of daily closing prices follows normal or Gaussian distribution. There provide strong evidence against Gaussian hypothesis for return distributions and fat tails are observed. A further investigation was undertaken to check whether observed departures from normality in data is due to some aberrations to otherwise Gaussian distributions. Results revealed that daily return data of majority of shares are inherently non-Gaussian in nature; therefore, observed departures from normality in the data can not be attributed to any kind of aberrations. In the subsequent section, an attempt is made to model the daily returns as stable distributions. [ABSTRACT FROM AUTHOR]

The global economic slowdown has fostered the need for unprecedented international policy coordination globally with key role players as US, Europe, Russia, China and India. Regulators of developed and developing regions have to work closely with each oilier, actively participate in the international Financial Stability Forum and the standard-setting bodies operating trader the aegis of the B1S, World Bank, IMF, UN & other agencies. The turmoil is product of global credit boom sponsoring mortgages, real estate and over capacitating stock-markets/stock-market linked assets/products with no real assets to support. This has been characterized by a broad under pricing of risk assessment, excessive leverage by financial institutions, and an emergence on complex & opaque financial instruments that are fragile under stressed free-market mechanisms. This credit squeeze is turning out to be one of the principal causes for the economic slowdown now taking place in many countries. [ABSTRACT FROM AUTHOR]

The stock market efficiency is an issue which can be examined only through empirical research works. During the last two decades especially after the opening up of the Indian economy, a number of research works have been carried out on the subject by experts attempting to explain and measure the different types of observed share price behaviour and the form of efficiency of Indian stock market. However, nothing conclusive is yet known about the likely behaviour of the share price and the form of efficiency. The present study is an attempt in this direction. The study is based on weekend share price data of BSE 30 (SENSEX) scrips covering a time period of two years i.e. from 1st, April 2000 to 31st March 2002. Rank correlation analysis has been extensively used in the study to examine the rank of performance of the above 30 stocks at different time intervals. [ABSTRACT FROM AUTHOR]

In integated stock markets identical stocks will trade at equal prices in domestic and foregin markets. Understanding the degree of integration of a country's capital markets could assist policy maker's in formulating guidelines in emerging markets that are vulnerable to rapid capital inflow and flight of capital. It is difficult to measure stock market integration however Korajzck (1996) evolved a measure based on the International Arbitrage Pricing Theory. We examine how far the Indian stock market has integrated with the global market by observing the mis-pricing of assets in asset pricing model of portfolio theory. The Indian stock markets appear to be more integrated since late 1990s, perhaps due to lower barriers for foreign porfolio invertment funds and easier access for Indian firms to international markets. Finding of this study shows that as the level of integration increases, there is an argument for bringing down the barriers further. [ABSTRACT FROM AUTHOR]