Evaluating The Financial Market Response Of Emerging Economies To Quantitative Easing
Shalini Meera Kapoor
Research Scholar, Institute of Management, India
Abstract
The Quantitative easing programmer by US Federal Reserve though seems to be a liquidity injecting stimulus programmer, has been seen in the recent times to create panic among the investors throughout India and other emerging economies. The impact of US Federal Reserve proposing to withdraw its liquidity programmer was observed on May 22nd, 2013. It is a clearly seen phenomenon that the impact of these meetings have been seen to have a profound impact and awaited very keenly by the investing community. Thus a need was felt to study the impact of Federal Reserve meeting in the year 2013 on the stock markets. For the study, fifteen 15 indices listed on Mumbai stock exchange were considered. 105 Event study methodology and parametric tests were conducted to analyses the impact of the Federal Reserve meeting on the indices and exchange rates. We observe that emerging economies mainly Indian markets are highly integrated with the global markets especially U.S markets in the recent times when compared to few years back. This study thus forecasts the real influence of complete withdrawal of the Federal Reserve quantitative easing on the emerging economies