Navigating Market Turbulence: Exploring Banking Sector Volatility Amidst COVID-19

Abstract

The objective of the study was to study the volatility in the banking industry during COVID-19 by employing the technical barometer Relative Strength Index. The secondary data was extracted from the official websites of the National Stock Exchange for the period 1st January, 2020 to 30th September, 2022. The top 5 banks of Bank Nifty Index were undertaken for the analysis purpose and it was found that the maximum average return was witnessed by SBI Bank during the period of study. The returns of HDFC Bank, AXIS Bank, SBI Bank and Kotak Bank were fairly symmetrical as their values lies between -0.5 and 0.5. The returns of ICICI bank were moderately skewed as the value is -0.78. The high values of the excess kurtosis indicates that returns are heavily peaked and possesses thick tails as the values among all banks is greater than 1. The median return is highest in case of ICICI Bank and lowest in case of HDFC Bank. It was further witnessed that in the year 2020, due to COVID-19, the stock prices declined measurably and entered the oversold zone with RSI value of 18.98 on 24th March, 2020. Thereafter, there were continuous ups and downs in stock prices due to panic and unrest during the pandemic phase. The chart of Bank Nifty index was normal and there were many occasions when it appeared bullish and bearish to investors. Due to the change in behaviour of the individual investors there was panic buying and selling in the market.

Keywords: COVID 19, Market, Trends, Investors, Banks, Volatility

View PDF