Impact of India’s Demonetization Episode on its Equity Markets

Demonetization is an act of divesting a currency unit from its legal tender. In developing country, the demonetization will have direct influence on various sectors. An event study empirical analysis to investigate effect such unforeseen events. this study, we impact Indian stock market. For analysis, daily data NIFTY 50 Index during been analyzed within observation different windows. These windows are framed as 0–7 days, 0–14 and 0–30 days understand period 8th November 2016–21st December 2016. The concludes that events market lasted for short time-period recovered 1 month. More precisely, in case demonetization, though initially viewed disruptive, Cumulative Abnormal Returns bounce back indicate negative financial was not severe industry perceived.