In the present situation where the stock market is going up and down, it is necessary to invest consciously in the market. This article studies the last five years’ price behaviour in the Indian stock market. This study focuses on the factors which directly or indirectly affect not only the share market but also other markets such as derivatives or commodity markets. It is targeted at existing or new investors or students interested in the stock market.
The objective is to understand the risk-return profile of certain selected stocks and their impact on price-trading volume trends in the Indian stock market. The study of fluctuations makes the investor aware of the factors affecting investments. Although every stock has an underlying mean level of price volatility, sometimes volatility becomes excessive due to unclear industry-related and macroeconomic information. This leads investors to panic buying or selling, causing frequent and abnormal stock price movements.
It is difficult for investors to predict future stock prices, as these are influenced by various fundamental and economic factors. Common investors lack proper access to such information, especially when the market is efficient and data is costly or not widely available. Only professional investors like FIIs, mutual funds, insurance companies, or high net-worth individuals have access to the required data to make informed decisions.
India has witnessed a five-year up and down cycle in the stock market. From 2019 to 2024, Indian stock markets fluctuated heavily. Globalization and foreign market fluctuations significantly impacted Indian stock movements. In such volatile conditions, market efficiency to reflect relevant information weakens. The study shows that past returns and risks alone cannot guide investors to a proper strategy.
A profitable investment portfolio requires investors to remain updated with market changes. Proper information about companies and market conditions is essential. Government, regulators, and stock exchanges have key roles to play in providing a friendly market environment. This includes better dissemination of information, transparency in trading, financial disclosures by listed companies, and investor education programs.
Common and small investors struggle in an inefficient market that favors large investors. Companies may smooth dividends to reduce volatility, but stock prices remain unpredictable. Technical analysis, which studies past price and volume patterns, requires expert knowledge and is difficult for common investors to apply. Another view, the Random Walk Hypothesis (RWH), claims that all available information is already reflected in stock prices, making future price prediction nearly impossible.
This article attempts to study the price behaviour of selected stocks in the Indian stock exchange from 2019 to 2024. It evaluates the risk-return profile and the effect on trading volumes. The findings highlight that informed investment, transparent policies, and educational initiatives are crucial to protect small investors and ensure efficient market functioning.