Empirical Investigation of Stock Market Behaviour in the Colombo Stock Exchange

Abstract

A Stock market or equity market is a platform for the trading of listed company’s stocks and derivatives at consented price between buyers and sellers. Day by day stock markets have becoming more institutionalized. In the past few decades, it has been advanced as the main forms of investments for numerous organizations as well as individuals for arranging large investment funds to the general public. Highly volatile fluctuations with instability patterns are common phenomenon in the Colombo Stock Exchange (CSE). Multivariate statistical methods and economic data forecasting techniques were deeply applied to identify the directions and movements of market prices and trade volume rates in CSE during 2006 to 2012. The research findings reveals that, Bank Finance and Insurance, Beverage Food and Tobacco, and Investment Trust sectors are most suitable sectors for investing capitals in the future.