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PERFORMANCE OF SELECTED GLOBAL STOCK INDICES FOR THE MONTH OF SEPTEMBER 2016

PERFORMANCE
OF SELECTED GLOBAL STOCK INDICES FOR THE MONTH OF SEPTEMBER 2016
Sudindra VR
1.     
INTRODUCTION
Last consecutive trading days’ global
indices have shown negative trend, due to volatility in US and latest
development of US tepid recovery news. Stock markets across the globe are
trading at record high, NASDAQ and NYSE is up by 232% and 126% since the market
bottomed in 2008-2009 crisis and with slow in recovery the record high trading
is not sustainable. Several noted economists and distinguished investors are
warning of stock market crash in 2016. The report of Harvard business school
concludes the inability of US government to bolster US competitiveness
worldwide. Many experts in India expecting the market to be volatile in the
month of September 2016. The latest development of US tepid recovery news will impact
the entire global stock market. The present study analysed the market
performance through return and volatility of major global indices of G20
countries whether the expert’s opinion will hold good.
2.     
OBJECTIVES:
The objective of the study is to find
out the impact of US tepid growth and decision regarding increasing policy
rates to boost economy and the impact on it’s the global stock indices.
3.     
METHODOLOGY:
The study is empirical in nature; the
study consists of analysing 19 major global stock exchanges of G20 nations. For
the purpose of study primary data has been used. Primary data includes 19
global stock exchanges closing prices from 1st September 2016 to 14th
September 2016 sourced from www.quandle.com.  Average return and
standard deviation has been calculated to analyse the performance of global
indices.
4.     
DATA ANALYSIS:
Table
4.1 Table showing average return and standard deviation of 19 selected major
G20 countries stock exchanges for the period of 1st September 2016
to 14th September 2016
INDEX
AVERAGE RETURN
STANDARD DEVIATION
NIFTY
-0.06
0.90
NIKKEI JAPAN
-0.21
0.71
S&P 500 US
-0.24
1.14
 NASDAQ US
-0.12
1.19
SHANGAI COMPOSITE CHINA
-0.22
0.73
HANGSENG INDEXCHINA
0.00
1.44
DAX GERMANY
-0.17
0.84
CAC FRANCE
-0.18
1.09
BOVESPA BRAZIL
-0.29
1.97
RTSI INDEX RUSSIA
0.30
1.49
S&P TSX COMPOSITE INDEX (CANADA)
-0.25
0.90
ALL ORDINANCE INDEX AUSTRALIA
-0.38
0.92
IBEX 35 SPAIN
-0.08
1.25
IPC INDEX (MEXICO)
-0.43
0.85
KOSPI COMPOSITE INDEX (SOUTH KOREA
-0.19
1.01
JKSE: JAKARTA COMPOSITE INDEX
(INDONESIA)
-0.40
0.80
RUSSEL 1000 US
-0.24
1.16
SENSEX INDIA
-0.02
0.86
MERVAL INDEX (ARGENTINA)
-0.15
1.83
Sources:
Authors calculation
Graph
4.1 Graph showing average return of 19 selected major G20 countries stock
exchanges for the period of 1st September 2016 to 14th
September 2016


Sources:
Authors calculation
Inference:
 based on above graph it can observe that major
stock exchanges in the month of September 2016 average declined by 0.18% in last
14 days. Brazil, Indonesia, Australia and Mexican indices reduce more than 0.3%,
except Russian market which increased by 0.3%.
Graph
4.2 Graph showing standard deviation of 19 selected major G20 countries stock
exchanges for the period of 1st September 2016 to 14th
September 2016


Sources:
Authors calculation
Inference: based on above graph it can observe that the global market
is highly volatile with average standard deviation of 1.1%. Argentina, Russia
and Brazil markets have shown significantly high volatile among 19 indices and
all the stock exchanges shows above 0.7 standard deviation in last 14 days of September
month.
5.     
CONCLUSION:
Several noted economists,
distinguished international investors and Indian market experts are warning on
global stock market in September 2016 which may show negative trend. Harvard
business school report concludes the inability of US government to boost
economy impacting on global stock market indices with low average return and
high volatility.  Is this volatility and negative
trend is going to continue for remaining days of September?
6.       BIBLIOGRAPHY:

Ø  Warren Buffett Predicting Upcoming Stock
Market Crash? By John Whitefoot, BA Published : September 13, 2016,  http://www.profitconfidential.com
Ø  80% Stock Market Crash To Strike in 2016, Economist
Warns, BY JL YASTINE, September 9, 2016,  http://thesovereigninvestor.com
Ø  Report: US government inaction is hampering economic
growth,
By Josh Boak | AP September 15 at 12:17 AM, www.washingtonpost.com
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