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3/5/2018 PESTEL analysis of Indian capital market

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PESTEL analysis of Indian capital market

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POLITICAL:

The capital market of India is very vulnerable. India has been politically instable in the past but it is a little politically stable
now-a-days.the political instability of the country has a very strong impact on the capital market. The share market of India
changes as the political changes took place. The BSE Index, SENSEX goes up and down with any kind of small and big
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political news, like, if there is news that a particular political party has withdrawn its support from the ruling party, and then Investment Fi
the capital market will go down with a bang. The capital market of India is too weak and is based on speculations. The
political stability of the country is very important for the stability and growth of capital market in India. The political
imbalance or balance of the country is the major factor in deciding the capital market of India. The political factors include:

employment laws
tax policy
trade restrictions and tariffs
political stability

ECONOMICAL:

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The economical measures taken by the government of India has a very strong relationship with the capital market. Whenever
the annual budget is announced the capital market goes up and down with the economical policies of the government .If the
policies are supportive to the companies then the capital market takes it positively and if there is any other policy that is not
supportive and it is not welcomed then the capital market goes down. Like, in the case of allocation of 3-G spectrum, those
companies that got the license for 3-G, they witnessed sharp growth in their share values so the economic policies play a
major part in the growth and decline of the capital market and again if there is relaxation on any kind of taxes on items of
automobile industry then the share of automobile sector goes up and virtually strengthen the capital market .The
economical factors include:
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in ation rate
economic growth
exchange rates
interest rates
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SOCIAL:

India is a country of unity in diversity .India is socially rich but the capital market is not very attached with the social factors
.Yes, there is some relation between the social factors with the capital market. If there is any big social factor then to some
extent it affects the capital market but small social factors don’t impact at all. Like, there was opposition of reliance fresh in Subscribe
many cities and many stores were closed. The share prices of the reliance fresh went down but the impact was on and
individual rm there was not much impact on the capital market on a whole the social factors have not much of impact on
the capital market in India. The social factors include:

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3/5/2018 PESTEL analysis of Indian capital market

 Modern Portfolio Theory – Marko


emphasis on safety
Portfolio Selection Model
career attitudes
population growth rate  Risk and Return in Portfolio Inves
age distribution
 Sub Categories of Active Equity M
health consciousness
 Fundamental Analysis of Stocks
TECHNOLOGICAL:
 Technical Analysis of Stocks
The technological factors have not that much effect on the capital market. India is technological backward country. Same as
 Portfolio Analysis in Investment P
social factors, technological factor can have an effect on an individual form but it cannot have a big impact on a whole of
Management
capital market. The Bajaj got a patent on its dts-i technology, and launched it in its new bike but it does not effect on capital
market. The technological change in India is always on a lower basis and it doesn’t effect on country as a whole. The  An Overview of Indian Capital Ma
technological factors include: History of Indian Capital Market

 Different Types of Stock Beta


R&D activity
technology incentives  Risk-Return Trade off
rate of technological change
 Three Types of Portfolio Investm
automation

ENVIORNMENTAL FACTORS:

Initially The environmental factors don’t play a vital role in the capital market. But the time has changed and people are more
eco-friendly. This is really bothering them that if any rm or industry is environment friendly or not. An increasing number of Categories
people, investors, corporate executives are paying importance to these facts, the capital markets still see the environment as
a liability. They belie that it is of no use for their strategy. The environmental performance is even under-valued by the
markets.  Business Analysis

 Business Communication
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 Business Ethics
Portfolio Management Marketing to Business
 Business Finance
Stock Market Trading Marketing Analysis
 Business Taxation

LEGAL FACTORS:  Financial Management

Legal factors play an important role in the development and sustain the capital market. Legal issues relating to any industry  General Business Articles
or rm decides the fate of the capital market. If the govt. of India or the parliament introduces a new law that can affect the
 Global Business Environment
running of the industry then the industry will be demotivated and this demonization will lead to the demonization of the
investors and will result in the fall of capital market. Like after the Hardhat Mehta scam, new rules and regulations were  Human Resource Management
introduced like PAN card was made necessary for trading, if any investor was investing too much money in a small rm, then  Industrial Marketing
the investors were questioned,etc. These regulations were meant to maintain transparency in the capital market, but at that
time, investment was discouraged. Legal factors are necessary for the improvement and stability of the capital market.  Information Systems Manageme

 International Business
Discover the new executive  International Business Laws
Finance for Executives course SDA Bocconi School
 International Finance
of Management
 Investment Management

 Legal Framework

 Logistics Management

 Management Articles

Related Articles:  Management Case Studies

Modern Portfolio Theory – Markowitz Portfolio Selection Model  Management Concepts

Risk and Return in Portfolio Investments  Management Information System


Sub Categories of Active Equity Management
 Management Principles
Fundamental Analysis of Stocks
Technical Analysis of Stocks  Management Science
Portfolio Analysis in Investment Portfolio Management
 Managerial Economics
An Overview of Indian Capital Market – History of Indian Capital Market
Different Types of Stock Beta  Marketing Management
Risk-Return Trade off
 MBA Career
Three Types of Portfolio Investments
 Mercantile Law

 Modern Management Concepts

 Operations Management

 Organizational Behavior

 Personal Finance

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3/5/2018 PESTEL analysis of Indian capital market

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