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ANALYSIS OF RELATIONSHIP LEVEL BETWEEN SELECT STEEL COMPANIES AND NIFTY


ANALYSIS OF RELATIONSHIP LEVEL BETWEEN SELECT STEEL COMPANIES AND NIFTY
Dr.P.Karthikeyan, Associate Professor of Management Studies,Periyar University PG Extension Centre, Dharmapuri 636701, T.N, India
E-mail: karthikeyanmbansr@gmail.com
N.A.Mala, M.Phil (Full-Time) Research Scholar in Management, Periyar University PG Extension Centre, Dharmapuri – 636701, T.N.India
E-mail: malacbe@gmail.com
ABSTRACT
Steel industry has very rapid growth in the industrial sector and rising infra expenditure projects in railways, roads and highways etc. It has strong export demand and signs of revival in the domestic sales.  There are many issues that affect the indices of the stock market.This study examines the short run dynamic relationship between steel price-behavior with Nifty through correlation model. The secondary data is used in this study from November1,2017-January 31, 2018 closing stock price of selected companies has been collected. It is concluded that there is a positive correlation between steel prices and Nifty index.
KEY WORDS:Steel Industries, Stock Price, Correlation, Nifty, NSE India.
INTRODUCTION:
Stock market is used by the investors to know the index value and evaluate their portfolio by the indices as benchmark and compare and forecast the future movements.The research study is made to analyze the interrelation between select three steel companies and Nifty. An investor can reduce portfolio risk simply by holding instruments which are not perfectly correlated and they can diversify their holdings.The correlation coefficient willalways be between -1and 1.A positive correlation coefficient means the two variable moves in the same direction as one increasethe other also increases and
vice-versa.

OBJECTIVES OF THE STUDY:
1.      To study the relationship between the select steel companies and Nifty.
2.      Evaluate theportfolio and reduce the risk of the investor by the researcher suggestion.
3.      To find the             Net Profit of the select Steel companies
LIMITATION OF THE STUDY:
The period of the study is from November 1st 2017 to January 31st2018(i.e) Period of three months.
RESEARCH METHODOLOGY OF THE STUDY:
Type ofresearch:Exploratory research
Source of data:Secondary data from NSE India official website
Data Analysis: Pearson’s Correlation through SPSS System.
The data collected are secondary data from the NSE India, the closing of the steel share prices and closing Niftywere taken for the study.
RESULTS OF ANALYSIS AND DISCUSSIONS:
Based on the NetProfit, JSW Steels ranks I with Rs.3576 Crore, TataSteel ranks II with 3444Crore and Jindal(Hisar) ranks III with 218Crore.
.TABLE-1
STEEL INDUSTRIES ON THE BASE OF NET  PROFIT
(Based on 2016-2017)
S.No
Name of the company
Net Profit
( INR in Crore)
Rank
1
JSW Steels
3576.54
I
2
Tata Steels
3444.55
II
3
Jindal(Hisar)
218.02
III
Soures: Money control.com

TABLE- 2
CORRELATION BETWEEN SELECT STEEL COMPANIES AND NIFTY 50
(Period From November 1,2017 to January 31,2018)
S.No
Name of the company
Correlation value(r)
Results
1
JSW Steel
0.881
Positive (r)
2
Tata Steels
0.880
Positive (r)
3
Jindal(Hisar)
0.908
Positive (r)

As per the research undergone by the researcher, there is a positive correlation between top three Steel industries (Tata Steel, JSW & Jindal) and the Nifty Index. So, the increase of the share prices of the Steel companies is positively correlated to the Nifty Index.From the analysis The JSW Steels is positively correlated with Nifty by 0.881 and Tata Steels is positively correlated by 0.880 The Jindal Steels is correlated positively by 0.908, with Nifty 50.

CONCLUSION:
By using NSE India data from November 1,2017to January 31,2018, an effort is made to investigate the relationship of top Steel companies and Nifty index. It is inferred that the Nifty varies with the stock price of the Steel companies accordingly (i.e) increase or decrease in the equity price. Longtime investigation can give more reliable and strong results for the investors.
REFERENCE WEBSITES:
ü  Google Finance
ü  Moneycontrol.com
ü  NSE India

REFERENCES BOOKS:
v  Prasanna Chandra,” Investment analysis& Portfolio Management”, New Delhi,
v  The McGraw Hill Company Ltd.6th edition.2006
v  Kothari C.R.” Research Methodology”,New Delhi, New Age International Pvt. Ltd Publisher,2nd Edition, 2004

ANNEXURE
STEEL COMPANIES EQUITY PRICES NIFTY 50
(Period from November 1,2017t to January 31,2018)
Date
Tata Steel
JSW Steel
Jindal(Hisar)
NIFTY
1/11/2017
673.84
264.75
228.9
10440.5
2/11/2017
672.7
266.2
234
10423.8
3/11/2017
675.37
266.6
232.05
10452.5
6/11/2017
673.37
268
229.4
10451.8
7/11/2017
660.41
264.05
217.05
10350.15
8/11/2017
660.36
262.45
214.75
10303.15
9/11/2017
670.13
264
216.65
10308.95
10/11/2017
669.03
270.8
216.05
10321.75
13/11/2017
658.36
263.85
217.2
10224.95
14/11/2017
653.08
266.55
209.7
10186.6
15/11/2017
645.69
255.45
200.3
10118.05
16/11/2017
653.89
258.65
197.5
10214.75
17/11/2017
668.03
266.6
209.4
10283.6
20/11/2017
668.94
265.95
214.8
10298.75
21/11/2017
677.7
268.85
221
10326.9
22/11/2017
677.42
268.55
219.35
10342.3
23/11/2017
678.99
266.85
216.25
10348.75
24/11/2017
674.94
265.2
220.4
10389.7
27/11/2017
669.32
258.9
219.55
10399.55
28/11/2017
670.56
255.65
217.7
10370.25
29/11/2017
675.75
255.25
217.6
10361.3
30/11/2017
661.32
254.85
210
10226.55
1/12/2017
648.69
252.05
207
10121.8
4/12/2017
655.27
251.85
210.1
10127.75
5/12/2017
643.74
247.7
210
10118.25
6/12/2017
636.02
242.15
213.1
10044.1
7/12/2017
655.46
250.85
215.7
10166.7
8/12/2017
664.79
252.45
214.75
10265.65
11/12/2017
666.46
251.5
209.9
10322.25
12/12/2017
657.22
249.95
204.85
10240.15
13/12/2017
648.65
244
213.95
10192.95
14/12/2017
650.31
242.45
212
10252.1
15/12/2017
661.84
250.9
210.8
10333.25
18/12/2017
671.37
253.95
207.45
10388.75
19/12/2017
676.61
256.4
208.45
10462.2
20/12/2017
669.56
262.1
209.05
10444.2
21/12/2017
680.8
265.3
228.45
10440.3
22/12/2017
677.56
264.5
229.35
10493
26/12/2017
687.52
267.4
231.35
10531.5
27/12/2017
689.23
265.45
227.55
10490.75
28/12/2017
701.43
271.3
228.35
10477.9
29/12/2017
697.76
269.8
225.8
10530.7
1/1/2018
688.04
265.8
206.2
10435.55
2/1/2018
694.8
264.55
203.4
10442.2
3/1/2018
700.19
268.7
219.55
10443.2
4/1/2018
724.29
265.8
244.55
10504.8
5/1/2018
734.25
285.1
239.05
10558.85
8/1/2018
732.39
286
256.45
10623.6
9/1/2018
735.77
284
248.75
10637
10/1/2018
736.29
282.8
262.4
10632.2
11/1/2018
734.48
282.55
267.35
10651.2
12/1/2018
733.82
286.8
264.85
10681.25
15/1/2018
746.44
285
267.3
10741.55
16/1/2018
729.53
281.2
270.7
10700.45
17/1/2018
737.39
285.05
269.7
10788.55
18/1/2018
716.19
279.8
264.35
10817
19/1/2018
717.38
282.1
264.15
10894.7
22/1/2018
726.62
278.65
263.75
10966.2
23/1/2018
742.87
294.05
290.75
11083.7
24/1/2018
726.05
288.65
276.5
11086
25/1/2018
732.77
290.8
280.2
11069.65
29/1/2018
746.11
293.45
266.05
11130.4
30/1/2018
739.15
289.1
268.35
11049.65
31/1/2018
705.05
289.95
266.45
11027.7