SYNOPSIS

on
“A STUDY ON IMPACT OF STOCK MARKET VOLATILITY ON
INDIVIDUAL INVESTOR’S INVESTMENT DECISIONS WITH
REFERENCE NIVESH TO TOINDIA SECURITES LIMITED”
Submitted in partial fulfillment of the requirements for the award of the degree of

MASTER OF BUSINESS ADMINISTRATION

OF

BANGALORE UNIVERSITY

By

SRINIVAS.V

Reg. No: 17KXCMD089

Under the guidance of

Internal Guide: External Guide:

Mrs. Shreelatha H.R Mr. Prem Kumar
Assistant Professor Key Equity Manger
Surana College India nivesh securities ltd

SURANA COLLEGE POST GRADUATEDEPARTMENTS

Kengeri, Satellite Town
Bangalore-560060
2018-2019
 “A STUDY ON IMPACT OF STOCK MARKET VOLATILITY ON
INDIVIDUAL INVESTOR’S INVESTMENT DECISIONS WITH
REFERENCE NIVESH TO TOINDIA SECURITES LIMITED”

1. INTRODUCTION

1.1Introduction to dissertation
This dissertation is carried out in fourth semester for partial fulfillment of the requirement for the
award of degree of MBA in Bangalore university undertakings this dissertation projects will help
exposure about understanding the investor awareness. This dissertation is carried out understand
About stock market volatility on individual investor’s investment decisions reference to india
nivesh securities limited.

Stock exchanges to some extent play an important role as indicators, reflecting the performance
of the country's economic state of health. Stock market is a place where securities are bought and
sold. It is exposed to a high degree of volatility; prices fluctuate within minutes and are
determined by the demand and supply of stocks at a given time. Stockbrokers are the ones who
buy and sell securities on behalf of individuals and institutions for some commission. The
Securities and Exchange Board of India (SEBI) is the authorized body, which regulates the
operations of stock exchanges, banks and other financial institutions were safe guard asset of the
investors Volatility is a symptom of a highly liquid stock market. Pricing of securities depends
on volatility of each asset. An increase in stock marketvolatilitybrings a large stock price change
of advances or declines. Investors interpret arise in stock market volatility as an increase in the
risk of equity investment and consequently they shift their funds to less risky assets by selecting
this topic we can understand the behaviour of individual investors of stock market
2. REVIEW OF LITERATURE

Shasthri, 2005: A financial market is a market in which people and entities can trade financial
securities, commodities, and other fungible items of value at low transaction costs and at
prices that reflect supply and demand. Securities include stocks and bonds, and commodities
include precious metals, agricultural goods oil etcher are both general markets (where many
commodities are traded) and specialized markets (where only one commodity is traded).
Markets work by placing many interested buyers and sellers, including households, firms,
and government agencies, inane "place", thus making it easier for them to find each other. An
economy which relies primarily on interactions between buyers and sellers to allocate
resources is known as market economy in contrast either to a command economy or to anon-
market economy such as a gift economy.

Abdul: Finance theory assumes that investors are rational and make decisions based on
profit maximisation.The heart of traditional finance is the Efficient Markets Hypothesis
(EMH) that assumes that all of the information is provided to all investors without cost.
Therefore, the price of stocks always reflects their intrinsic value and is reasonable (Fame,
1965, 1970 and 1991). However, the reality shows that investors in the markets are not
necessarily always rational in their decisions and that other factors might affect them when
they are making their investment decisions

SANNINGAMMANAVARA:

This study elucidates the impact of Market volatility on the investors’ investment decision
making process. The market volatility is the results of various factors in the economy and
even the institutional investors, FIIs, and other wealthy investors influence the market to the
great extent. This leaves the retail investors in trap to behave irrationally when they make
investment decisions. The researchers attempt to study mainly how an individual investor
behaves to the market volatility and which factors most matter for investor when he/she
makes an investment decisions.
Jeyanthi : 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. If more people want to buy a stock than sell it - the price moves up.
Conversely, if more people want to sell a stock, there would be more supply (sellers) than
demand (buyers) - the price would start to fall. Volatility in the stock return is an integral part
of stock market with the alternating bull and bear phases. In the bullish market,
the share prices soar high and in the bearish market share prices fall down and these
upsanddownsdetermine the return and volatility of the stock market.

Churyk: To help apply investor sentiment for financial purposes, the following decision
making matrix works well. We construct a decision tree using sentiment data as a contrarian
indicator as Thorp (2004) recommends, stating that the market will move in opposition to the
highest levels of bullish and bearish sentiments. Large market increases occur with extreme
levels of bullish sentiment and with many investors becoming fully invested in the market. In
this setting, a downturn should be anticipated. A corresponding situation occurs with high
levels of bearish sentiment. Market sentiment indicators can also help to find market tops and
bottoms, by using extreme levels of investor sentiment as an overall market contrarian
indicator.

Joshi: studied the determinants of development in the Nairobi Stock Exchange using Secondary
data for the period 2005-2009. Their result found that, macro-economic factors such as stock
market liquidity, institutional quality, income per capita, domestic savings and bank development
are important determinants of stock market development in the Nairobi Stock Exchange. They
could not found relationship between stock market development and macroeconomic stability -
inflation and private capital flows. They also shown that Institutional quality represented by law
and order and bureaucratic quality, democratic accountability and corruption index are important
determinants of stock market development because they enhance the viability of external finance.
Weberz: Fueled by the rise of denned contribution retirement plans and the beets of mutual
funds, there has been a strong trend towards delegated investing {in the U.S., Germany, and
else-where. French (2008) notes, for example, that direct stock ownership by U.S.
households declined from 47.9% in 1980 to 21.5% in 2007; as of 2004, households have
been replaced by mutual funds as the largest owner of U.S. common stock.

Ngoc: To have an in-depth insight into the investors’ decisions, there is a necessity to
investigate which behavioral factors influencing the decisions of individual investors at the
Securities Companies in Ho Chi Minh City. It will be useful for investors to understand
common behaviors, from which justify their reactions for better returns. Securities
Companies mayalsouse the finding of this research for better understanding on investors’
decision togivebetterrecommendations to them. Thus, stock prices will reflect their true value
and Ho Chi Minhstockmarket becomes the yardstick of the economy’s wealth

Jagongo: Investment decisions are made by investors and investment managers.

Investorscommonly perform investmentanalysis by making use of fundamental analysis,
technical analysis and judgment. Investment decisions are often supported by decision tools.
It is assumed that information structure and the factors in the market systematically influence
individuals’ investment decisions as well as market outcomes. Investor market behavior
derives from psychological principles of decision making to explain why people buy or sell
stocks. These factors will focus upon how investors interpret and act on information to make
investment decisions.

Cohn et al: in1975 provided tentative evidence that risk aversion decreases as the investor’s
wealth increases, while Riley and Chow showed that risk aversion decreases not only as
wealth increases, but also as age, income and education increase. Lebanon, Farrell and Gulag
(1992) added to the debate, by advocating that individuals ‘risk aversion is largely a function
of visceral rather than rational considerations. On the other hand, Baker andHaslem (1974)
contended that dividends, expected returns and the firm’s financial stability are critical
investment considerations for individual investors
3. NEED FOR THE STUDY

The main purpose of the research paper is to find and analyze the key factors that insist or
motivate individual investors to invest in stock markets and how their decisions are affected
by the volatility in stock prices. In the present day scenario investments in stock markets has
became a part of the individual investor’s portfolio. Especially for those investors who are
ready to take more risk but want higher returns stock market investments are the great sources.
The investment objectives of the investors are varying from one to other. A careful analysis
and close observation helps the investors to predict the future changes of the stock prices.

4. STATEMENT OF THE PROBLEM

To analyzing various factors understanding of the reasons for the volatility in stock markets
and its impact on investment decisions of the individual customers. The study also focuses
on the various factors that play role in investment decisions of the individual investors in
stock markets. It also concentrates on how to forecast the price changes of shares and other
securities so that it will be helpful to investors to make sound decisions and also to
analyzing various services provided by india nivesh to its customers.

5. OBJECTIVES

 To know the reasons for the stock market volatility.

 To find the various parameters that are taken into consideration by individual
investors while investing in stock markets.
 To study the various services provided by india nivesh to its customers.

 To find weather stock market volatility have an impact on investment

decisions of the individual investors or not.
.
6. SCOPE OF THE STUDY
The study is conducted to know impact of stock market volatility on investment decisions of individual
investors. And survey is conducted in stock broking company which acts has a part of my study to
know the level of market volatility in stock market.

7. RESEARCH METHODOLOGY
7.1TYPE OF RESEARCH

Descriptive research allows the research to gain better understanding of the concept and provides
direction in order initiate a more structured research. The descriptive research designed used for
this study. The observation checklist on a study on investor perception towards mutual fund with
special reference at India nivesh securities private limited.

7.2 SOURCES OF DATA

The present study of the data will be collected from journals and research articles on both
primary data and secondary data.

Primary data:

Primary data is the one which is collected for the first time by the researcher for the first time by
the researcher for the purpose of research.

Secondary data:

The secondary sources of data will have about the research articles, journals, and
websites.
7.3 Sampling
7.3.1 Sampling Type
For this type of sampling they had used the convenience sampling that is non-
probability sampling.

7.3.2 Sampling Frame

Investor of Bengaluru city

7.3.3 Sampling Unit

India nivesh securities private limited.

7.3.4 Sample Size

Sample size is 100

7.4 TOOLS FOR DATA COLLECTION

The structured questionnaire will be collected in the tools of data collection.

7.5 PLAN OF ANALYSIS

1. It will have the representation of diagrams, graphs will be used.

2. The appropriate statistical tools and techniques will be used for the analysis of the data.

3. To make the research useful the recommendations and discovery will be given to
ananalysis.

8 LIMITATIONS OF THE STUDY

The project has some limitations because it is totally based on efforts of individuals.

 The study was conducted only for period of 1 month duration.

 The study is carried out only among the investor in Bengaluru city.
 The sample was taken on the basis of convenience.
 Sample size limited for 100 only.
 The information provided by the organizations was limited to a far extent due to drawbacks
like competition.
CHAPTERIZATION SCHEME

Chapter 1: Introduction
This chapter consists that an introduction title for topic chosen to the subjectsof
organization.

Chapter 2: Review of literature and research design

This chapter explains the research objectives and methodology used for the study.

Chapter 3: Profile of the selecting organization and Respondents

Under this chapter the data analysis will be carried out interpretation will be presented

Chapter 4: Data analysis and interpretation

In this chapter findings, Suggestion, and conclusion will be provided.

Chapter 5: Findings, conclusions, and Recommendation

In this chapter recommendation will be provided.
REFERENCES
Abul1, S. J. (n.d.). Factors influencing Individual Investor Behaviour: Evidence from the.

Churyk, N. T. (n.d.). AN OVERVIEW OF INVESTOR SENTIMENT.

Jagongo, A. (n.d.). A Survey of the Factors Influencing Investment Decisions: The Case of Individual.

Jeyanthi, Q. (n.d.). Stock Market Volatility in Indian Stock Exchanges.

Joshi, M. (n.d.). Factors affecting Investment Decision in Stock Market.

Ngoc1, L. T. (n.d.). Behavior Pattern of Individual Investors in Stock Market .

SANNINGAMMANAVARA, M. K. (n.d.). DOES MARKET VOLATILITY INFLUENCE INVESTORS DECISION

MAKING PROCESS.

shasthri, r. (2005). Introduction of Indian Stock Market , 22.

Weberz, M. (n.d.). Individual Investors' Trading in Times of Crisis:.

Signature of the student signature of the guide