Conceptual study on efficient market hypothesis for world markets: finding opportunities for Indian stock markets

Abstract

It is an established fact that efficient and developed financial markets can lead to increased economic growth by improving the efficiency of allocation and utilization of savings in the economy. But the primary requirement of the capital market is allocation of ownership of the economy's capital stock. Also the ideal situation of the market exists when the prices of different securities provide accurate signals for the investment decisions to the investors, who can choose such securities that represent ownership of firms' activities under the assumption that security prices at any time fully reflect all available information. All this can be very well studied by understanding the share price behavior of the stock in any market and whether the same are envisaged in future by any perfunctory means; if so, any class of investors are able to earn unswerving and extensive success in investment matters. This conceptual paper attempts to accumulate the theoretical evidence of Stock market efficiency across the globe and exemplify its possibility for the Indian markets. The world markets including Indian stock markets reveal a mixed form of results and therefore it can be concluded that the market efficiency study from the Indian markets front is very primordial in nature and lacks the modern existence of research.