SYNOPSIS

ON

“A Comparative Study on Indian Stocks and US stocks in Automobile and IT sector”

SUBMITTED IN THE PARTIAL FULFILLMENT FOR THE AWARD OF

THE DEGREE OF BACHELORS IN BUSINESS ADMINISTRATION

UNDER THE GUIDANCE OF:

Ms. Ayushi Tyagi

Assistant Professor, RDIAS

SUBMITTED BY:

Goysha Vishnoi

Enrolment No: 04615901722

BBA-III Semester

Batch 2022-25

RUKMINI DEVI INSTITUTE OF ADVANCED STUDIES

An ISO 9001:2015 Certified Institute

NAAC Accredited: A+ Grade (2nd Cycle), Category A+ Institution (by SFRC, Govt. of NCT
Delhi)

(Approved by AICTE, HRD Ministry, Govt. of India)

Affiliated to Guru Gobind Singh Indraprastha University, Delhi 2A & 2B,

Madhuban Chowk, Outer Ring Road, Phase-1, Delhi-110085

 Introduction
The financial world is a dynamic environment where global events, investment sentiment,
and economic growth combine to create a complex web of risks and opportunities. The stock
market is the hub of this financial ecosystem, where investors look for returns while
businesses raise capital there. In order to shed light on the mechanisms, traits, and
distinctions that influence these important sectors of the global economy, this comparative
study compares and contrasts the American and Indian stock markets. A stock market is a
bustling marketplace where securities such as stocks, bonds, and derivatives are bought and
sold. It serves as a focal point for businesses looking to raise capital by issuing investors
shares, which make them equity owners in the business. These exchanges give investors a
platform to allocate their capital as profitably as possible while also offering liquidity and
transparency, which makes trading financial instruments easier.

One of the world's busiest and fastest-growing stock markets is the Indian stock exchange,
also known as the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE).
It has a long history that dates back to the 19th century, and it has developed into a diverse
ecosystem with a number of businesses from different fields and industries. The Indian stock
market serves as a gauge of the nation's economic progress and growth trajectory.

The American stock market, on the other hand, is the biggest and most significant in the
world. In addition to being home to well-known stock exchanges like the NASDAQ and
NYSE, it is also home to a wide range of businesses, including well-known technology
companies, long-standing conglomerates, and creative start-ups. The US stock market is at
the centre of the financial universe and sets the tone for global market trends because of its
adaptability, depth, and global reach. The US stock market is a global benchmark that sets
standards for corporate governance, financial reporting and investment practices. It attracts
international investors and companies.

The US stock market is known for its strong regulatory environment overseen by the
Securities and Exchange Commission (SEC). It enforces strict rules to protect investors and
maintain market integrity. The Indian stock market is regulated by the Securities and
Exchange Board of India (SEBI). These stock markets serve as hubs for investment and serve
as windows into the social and economic dynamics. Every Making informed investment
decisions and comprehending the larger, interconnected world of finance can be aided by
having a deeper understanding of these markets.

This research explores the intriguing area of comparative analysis and looks at the main
distinctions and parallels between the stock markets in the US and India. We discuss these
markets in detail to get a thorough grasp of their distinct dynamics and their influence on
global finance, covering everything from market size and regulatory frameworks to investor
behaviour and financial consequences. The US and Indian stock markets are fascinatingly
entwined and have been shaped by distinct historical and socioeconomic contexts, but they
also provide important insights into the intricacies of contemporary finance. In the end, this
comparative study hopes to clarify their complexities and contribute to a better understanding
of the global financial system.
 Literature Review
Liu, F., Umair, M., &Gao, J. (2023) This research paper evaluates the impacts of crude oil
prices volatility on shares marketplaces. This research examines the impact of crude oil
uncertainty on the overall market returns in several economic sectors. They utilize twofold
quantile regression and quantile-quantile regression methods. Their findings demonstrate that
growing crude prices volatility obtains an adverse impact on stock returns, when the dual
crude costs volatility and stock returns are minimal. Nevertheless, when shares returns are
greater plus crude prices, volatility is minimal; growing crude volatility increases stock
returns.

Bhuyan, B. P., Jaiswal, V., &Cherif, A. R. (2023) This research aims to develop a
knowledge graph based model for representing stock price movements using fundamental
ratios of well-known corporations in India. This paper uses data from 15 ratios taken from the
top 50 companies according to market capitalization in India. The data were processed, and
different algorithms were used to extract tuples of knowledge from the data. Their technique
involves guiding a domain expert through the process of building a knowledge graph.

Sachdeva, M., Lehal, R., Gupta, S., &Garg, A. (2023) The researchers focused on the
question of whether severe market periods are accompanied by herding behaviour or not. The
authors performed a two-phase analysis to address the research questions of the study. In the
first phase, for text analysis NVivo software was used to identify the factors driving herding
behaviour among Indian stock investors.While in the second phase, the Fuzzy-AHP analysis
techniques were employed to examine the relative importance of all the factors determined
and assign priorities to the factors extracted.Results of the study depicted Investor Cognitive
Psychology (ICP), Market Information (MI), Stock Characteristics (SC) as the top-ranked
factors driving herding behaviour, while Socio-Economic Factors (SEF) emerged as the least
important factor driving herding behaviour.

Bhargava, V., & Konku, D. (2023) The authors investigate the relationship between major
currency exchange rate fluctuations and the impact on US stock market returns. The authors
use the Phillip-Perron method to test the data for unit roots. They employ the VAR/VECM
analysis to determine whether there are any correlations between exchange rates and stock
market returns. Using GARCH modeling, the authors discover that volatility in the Australian
dollar, Canadian dollar, and euro affect market return, and that volatility in the Australian
dollar and euro spills over to volatility. They also discover that the spill over for Australian
dollars is asymmetric.

Insaidoo, M., Ullah, A., Dziwornu, R. K., Amoako, S. (2023) The paper investigates the
relationship between the COVID-19 pandemic and the performance of four emerging market
stock markets. The Quantile-on-Quantile regression model was applied to daily share prices
in these economies' stock markets. The findings show a variety of relationships between
COVID-19 quantiles and share prices. While Brazil and Kenya have both positive and
negative relationships at different quantiles of share prices, India and South Africa have
negative co-movements at all quantiles of share prices. The varying dependence between
COVID-19 and stock markets provides policymakers with critical insights.

Saini, A., & Sharma, A. (2022) This paper provides a comparison of fundamental and
technical analysis based on various parameters. They also discuss a comparative analysis of
various stock price prediction techniques. Technical analysis, such as time series analysis,
and machine learning algorithms, such as the artificial neural network (ANN), are examples
of these strategies. Along with them, a few other researchers concentrated on textual analysis
of stock prices by continuously analyzing public sentiments from social media and other
news sources. Using visualisation, various approaches are compared based on methodologies,
datasets, and efficiency.

Fathali, Z., Kodia, Z., & Ben Said, L. (2022) In this paper, researchers provide an overview
of the use of deep learning networks for time series analysis and prediction on the Indian
National Stock Exchange. To forecast future trends in NIFTY 50 stock prices, Recurrent
Neural Network, Long Short-Term Memory Network, and Convolution Neural Network were
used. Different evaluation metrics are used for comparative analysis. These analyses led them
to determine the effect of the feature selection process and hyper-parameter optimization on
prediction quality and metrics used in stock market performance and price prediction.

Yadav, A., Jha, C. K., &Sharan, A. (2020) The Long Short Term Memory (LSTM) model
is one of the most widely used deep learning models today. It is also being used to predict
time series, which is a particularly difficult problem to solve because of the presence of long-
term trends, seasonal and cyclical fluctuations, and random noise. This research gap was
addressed in this paper. An LSTM model was developed for a dataset derived from the Indian
stock market. It was then tuned for the number of hidden layers by comparing stateless and
stateful models.

Idrees, S. M., Alam, M. A., &Agarwal, P. (2019) This study attempts to analyze time series
data from the Indian stock market in order to develop a statistical model capable of accurately
forecasting future stocks. Because of its widespread application in a variety of practical
domains, time series analysis and forecasting are critical. Time series data is an ordered
sequence or set of data points taken at equal time intervals by a variable. Stock market
forecasting entails determining market trends over time. All stock market investors want to
maximize the returns on their investments while minimizing the risks.

Akhtar, F., & Das, N. (2019) The objective of this paper is to better understand the
investment intentions of prospective individual investors in a developing country (India) by
employing the "Theory of Planned Behaviour" (TPB) (where perceived behavioural control
has been replaced with financial self-efficacy, FSE) and two additional constructs, namely
financial knowledge and personality traits (i.e. risk-taking proclivity and preference for
innovation).

Strader, T. J., Rozycki, J. J., Root, T. H., & Huang, Y. H. J. (2020) The objective of this
paper is to better understand the investment intentions of prospective individual investors in a
developing country (India) by employing the "Theory of Planned Behaviour" (Previous
research using a generalized autoregressive conditional heteroskedastic (GARCH) family-
based model of stock market return and volatility has also been reviewed in this paper. Based
on a review of current literature, the goal of this study is to identify future directions for
machine learning stock market prediction research. A systematic literature review
methodology is used to identify relevant peer-reviewed journal articles from the last two
decades and classify studies with similar methods and contexts.
 Research Methodology
Need of Study

India and the US represent two of the largest economies in the world, but they have different
market dynamics. India is a rapidly developing economy with a large, young population,
while the US is a mature and established market. Comparing the two can highlight the
contrasting growth trajectories and opportunities in these sectors.

The stock market offers numerous advantages; it also carries risks, including the potential for
losses and market volatility. Investors have a clear understanding of their investment
objectives, risk tolerance, and a well-thought-out strategy while participating in the stock
market.

Comparing Indian and US stocks in the automobile and IT sectors is important to gain a
holistic perspective on these industries, assess investment opportunities, manage risks, and
make informed decisions in an increasingly interconnected global economy.

Objectives

The objectives of the study are as follows:

 To compare Indian stocks and US stocks in Automobile and IT sector.

 To analyse volatility in Indian stock market and us stock market in Automobile and IT
sector.

Research design

The study is descriptive and empirical in nature.

Period of study

The time period of study is September to November 2023.

Source of data collection

The study includes secondary data. It was collected from the standard reference books and
websites.

Tools and Techniques

Analytical tools such as graphs, tables and pie charts are used. This analysis will be
completed through MS excel.
 Reference
Akhtar, F., & Das, N. (2019). Predictors of investment intention in Indian stock markets:
Extending the theory of planned behaviour. International journal of bank marketing, 37(1),
97-119.

Bhargava, V., & Konku, D. (2023). Impact of exchange rate fluctuations on US stock market
returns. Managerial finance.

Bhuyan, B. P., Jaiswal, V., & Cherif, A. R. (2023). A Knowledge Representation

System for the Indian Stock Market. Computers, 12(5), 90.

Fathali, Z., Kodia, Z., & Ben Said, L. (2022). Stock market prediction of Nifty 50 index
applying machine learning techniques. Applied Artificial Intelligence, 36(1), 2111134.ss

Idrees, S. M., Alam, M. A., & Agarwal, P. (2019). A prediction approach for stock market
volatility based on time series data. IEEE Access, 7, 17287-17298.

Insaidoo, M., Ullah, A., Dziwornu, R. K., Amoako, S., & Abdul-Mumuni, A. (2023).
COVID-19 pandemic and stock market performance: A comparative study of emerging
economies. Heliyon, 9(5).

Liu, F., Umair, M., & Gao, J. (2023). Assessing oil price volatility co-movement with
stock market volatility through quantile regression approach. Resources Policy, 81, 103375.

Sachdeva, M., Lehal, R., Gupta, S., & Garg, A. (2023). What make investors herd while
investing in the Indian stock market? A hybrid approach. Review of Behavioural
Finance, 15(1), 19-37.

Saini, A., & Sharma, A. (2022). Predicting the unpredictable: an application of machine
learning algorithms in Indian stock market. Annals of Data Science, 9(4), 791-799.

Strader, T. J., Rozycki, J. J., Root, T. H., & Huang, Y. H. J. (2020). Machine learning stock
market prediction studies: review and research directions. Journal of International
Technology and Information Management, 28(4), 63-83.

Yadav, A., Jha, C. K., & Sharan, A. (2020). Optimizing LSTM for time series prediction in
Indian stock market. Procedia Computer Science, 167, 2091-2100.