This study takes the daily returns of the ten different sector indices from the National Stock Exchange (NSE) in the Indian market for analysis. | Analysing the sectoral predictability of risk and return in India International Journal of Management IJM Volume 7 Issue 4 May June 2016 194 Article ID IJM_07_04_016 Available online at http ijm JType IJM amp VType 7 amp IType 4 Journal Impact Factor 2016 Calculated by GISI ISSN Print 0976-6502 and ISSN Online 0976-6510 IAEME Publication ANALYSING THE SECTORAL PREDICTABILITY OF RISK AND RETURN IN INDIA Dr. Pre ma Chandran Amity Global Business School Bangalore India INTRODUCTION Risk and return are both relevant to investment decisions. India has been an emerging nation and since liberalisation there have been a number of reforms that have witnessed stock market reactions. This has caused both the risk and return of the different sectors of the Indian market to frequently change and become unpredictable. There is no clear answer to whether the risks and returns of these indices remain stable over a period of time. This study takes the daily returns of the ten different sector ind ices from the National Stock Exchange NSE in the Indian market for analysis. The NIFTY indices considered here include bank Nifty Bank Index Auto Nifty Auto Index Energy Nifty Energy Index Financial services Nifty Financial Services Index FMCG Nifty FMCG Index IT Nifty IT Index Media Nifty Media Index Metal Nifty Metal Index Pharma Nifty Pharma Index and Realty Nifty Realty Index . The returns and the risk of the ten sectors are compared and analysed over a ten year period to examine their stability. According to NSE A stock market index is a measure of the relative value of a group of stocks in numerical terms. As the stocks within an index change value the index value changes. An index is important to measure the performance of investments against a relevant market index . Sectoral indices are normally used to provide information about price movements or overall behaviour of the sector. The sectoral index is .
