Impact of Corporate Event Announcements on Trends on Equities: Evidence from NSE Sectoral Indices

The objective of this study is to analyse the impact of corporate event announcements on share price and traded volume. Events like declaration of dividend, announcement of stock split, announcement of bonus share and announcement of right issue were considered for analysis. This study documented the evidence of impact on share price and traded volume by considering 731 events occurred in the group of companies representing 9 sectoral indices of National Stock Exchange (NSE) during the period 2009 to 2014. This study has adapted the concept of event study to calculate the abnormal average return on account of event announcements. The study found the significant positive impact on share price and the existence of abnormal average return on account of declaration of dividend and announcement of right issue. It also found the existence of positive significant impact on traded volume on account of the declaration of stock split and the announcement of right issue. The event like bonus issue gave a negative signal to the market which was supported by the negative abnormal average return during the post announcements.