A Study of Demonetization Announcement Effect on Indian Stock Market

Trinity Journal of Management, IT & Media (TJMITM)
Year: 2017 (Jan-Dec), Volume: (8), Issue. (1)
First page: (03) Last page: (08)
Online ISSN: A/F
Print ISSN: 2320-6470

A Study of Demonetization Announcement Effect on Indian Stock Market
Stiaram Pandey1 and Pramod Kumar Nayak2

1Assistant Professor, Cambridge Institute of Technology, Ranchi, Jharkhand
2Assistant Professor, Trinity Institute of Professional Studies, Dwarka, New Delhi
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11 -04-2017


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This study examines the impact of demonetization announcement effect on the returns of stock market & quantum of Investment through traded value in India for a very short period of time. The study examines the daily data of closing prices of S&P CNX Nifty Index and its traded value during pre and post demonetization periods. This is a new aspect that has been experimented by the existing government to eradicate black money, counter tax-evasion and destroy counterfeit currency from the Indian economy. The paper is basically concentrating on the effect of this government strategy on the capital market returns & its turnover. There is a mixed reaction on demonetization announcement among the different stakeholders of the economy. The present study is an attempt to understand the reaction of Indian capital market after demonetization. A standard event study methodology has been adopted to examine the pattern of changes that has taken place surrounding 50 days of the announcement date.


S&P CNX Nifty Returns, Traded value,Demonetization, Event Study, Announcement date.