The Influence of Internal and External Factors to the Indian Stock Market

Abstract

This paper has been undertaken with the aim of testing the applicability of Fama and French three factor model (1993) in explaining cross-sectional average return for Stocks in Indian equity market for the time frame of 5 years from 2011-2016.The sample includes firms that traded on NIFTY 50 index from 2011-2016. Monthly data has been used to assess the performance of various stocks which have been categorized into big and small portfolios. Monthly data gives a better picture as compared to annual data when the time horizon for study is short.