An analysis of risk and return in equity investment in banking sector

India is one of the emerging economies, which have witnessed significant development in the stock markets during the liberalization policy initiated by the government. And Indian stock market is largely integrated with the world markets. In that Context financial crisis of 2007-09 was a glass case of large spillovers from one bank to another bank heightening risk. It is clear that the investing in banking shares include high risk at the same time it earns extremely negative return which is revealed by the performance analyses on selected banking shares. Investing in stocks is a risky business. There are some risks which can control over and others that can only guard against. Most of these risks affect the market or the economy and require investors to adjust portfolios or ride out the storm. In this paper author analyze the risk and return in banking equity with non banking equity in Bankex. The study compare the banking equity performance with two major effected sector (Real, IT). The hypothesis taken is there is significant difference in return in banking and non banking equity. The statistical tools which were used for analyzing the hypothesis were descriptive analysis and T-test. The author has given some suggestion to improvise the market condition from the global recession.