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Impact of Global Financial Meltdown on Beta of Selected Scrips

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  • N Maruti Rao
  • Iftikar Ahmed M Naikwadi

Abstract

: Today, the world economy is melting like an ice cube on hot stove. Governments and Central Banks of respective countries around the world have initiated various measures to mitigate the impact of global meltdown such as bailout packages, injecting liquidity into the system. The impact of global meltdown on the Indian economy in general and the financial system in particular can be seen in BSE s crashing and slipping to less than 10,000 points from its peak of 21,000, and industries declaring production cut and job cut. In order to counter the menace of global meltdown the Government of India and RBI have taken various measures to mitigate the impact of global meltdown on Indian economy such as economy stimulus packages, cut in CRR, SLR, repo and reverse repo rates, extension of duty drawback scheme, etc. It has also become a political issue in the country. So, today we are witnessing the impact of global meltdown not only on the economy, financial system, industries and traders but also on the society at large. The present study analyzes one aspect of global meltdown, i.e., the impact of Global Financial Meltdown (GFM) on beta of selected scrips. The purpose is to find out the impact of GFM on beta of few selected Indian companies. It also intends to look into the correlation between few selected systemic risk factors such as Dow Jones Industrial Average index, Foreign Exchange Rate (FER) and Gross Domestic Product (GDP), and the beta of selected scrips.

Suggested Citation

  • N Maruti Rao & Iftikar Ahmed M Naikwadi, 2010. "Impact of Global Financial Meltdown on Beta of Selected Scrips," The IUP Journal of Applied Economics, IUP Publications, vol. 0(1), pages 40-63, January.
  • Handle: RePEc:icf:icfjae:v:09:y:2010:i:1:p:40-63
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