Video on Demand Systems

The story that Asia is becoming the growth centre of the world economy is in circulation for some time. Post the1997 East Asian Crisis which had caused significant reduction in asset prices and stock markets in several Asian countries, these economies boomed back. These economies maintained high interest rates thereby making them attractive to foreign investors. As a result these economies received a large inflow of funds and experienced a dramatic run-up in asset prices. As a part of market integration, the capital International Journal of Enterprise Computing and Business Systems ISSN (Online) : 2230-8849 http://www.ijecbs.com Vol. 1 Issue 2 July 2011 2 market of India is no longer cut off from international economic events and their stock index movements. This paper finds the correlation of Indian Stock market with five other major Asian economies: Japan, Hong Kong, Indonesia, Malaysia and Korea. A weak correlation concludes that the Indian stock markets offer diversification benefits to institutional and international investors. The paper finds non normality feature in the stock return distribution of the six economies of Asia including India. The Indian markets showed features of platykurtic distribution, the volatility of its weekly returns were similar to it other Asian counterparts. A negative skewness of returns, both in the short and long run indicates concentration of these returns towards higher returns and good opportunity for investment. JEL Classification: C87, E44, G15