An empirical study on stock index trend prediction using markov chain analysis

Abstract

The Indian Stock Market has been in action for quite some time and is in the limelight amidst others in the global capital markets. We can also see that the stock market indices around the globe are soaring to unprecedented heights and some markets are found to be encouraging investment destinations. Typically stock market indices are the performance indicators for the entire market. They act as barometers, which enable us to get an idea about the performance of the entire market in general. Interested investors all around the globe keep track of the movement of various stock market indices to get an idea about how the global markets are moving. With the globalization of the capital markets, we see that investors are not restricting their investments to a single market. Investments are made in different markets, enabling investors to enjoy the benefit of diversification of markets. Investors base their investments and make a choice of their investment destinations based on the movements of the stock markets. Investors worldwide try to watch the movement of market indices and have always shown keen interest in trying to predict the share market trend.