Today, the world economy is melting like an ice cube on hot stove. Governments and Central Banks of respective countries around the world have initiated various measures to mitigate the impact of global meltdown such as bailout packages, injecting liquidity into the system. The impact of global meltdown on the Indian economy in general and the financial system in particular can be seen in BSE's crashing and slipping to less than 10,000 points from its peak of 21,000, and industries declaring production cut and job cut. In order to counter the menace of global meltdown the Government of India and RBI have taken various measures to mitigate the impact of global meltdown on Indian economy such as economy stimulus packages, cut in CRR, SLR, repo and reverse repo rates, extension of duty drawback scheme, etc. It has also become a political issue in the country. So, today we are witnessing the impact of global meltdown not only on the economy, financial system, industries and traders but also on the society at large. The present study analyzes one aspect of global meltdown, i.e., the impact of Global Financial Meltdown (GFM) on beta of selected scrips. The purpose is to find out the impact of GFM on beta of few selected Indian companies. It also intends to look into the correlation between few selected systemic risk factors such as Dow Jones Industrial Average index, Foreign Exchange Rate (FER) and Gross Domestic Product (GDP), and the beta of selected scrips.

Economic recession is a global phenomenon and every country is facing this problem today. Worldwide, people are talking about economic recession at present. Indian economy, being one of the most vibrant economies in the world is also under the influence of this menace. Economic recession, an economic disease, has disturbed the minds of the governments, economists and public as they are feeling the punch of the recession. The industries have been badly hit by economic recession as demand has decreased which is putting pressure on their bottom line. The problem of fiscal deficit is also increasing due to various fiscal measures adopted by the government. Even the financial market has been hit by global financial meltdown as Sensex and other indices have drastically fallen down and beta of various scrips have increased.

Ma and Kao (1990) in their study found that currency appreciation affects the domestic stock market of an export-dominant country negatively, and that of an import-dominant country positively, which is consistent with the goods market theory. Rizwan and Ahmed (2002) examined the relationship between stock prices and exchange rates in Bahrain. They found a long-run bidirectional causal relationship between stock prices and exchange rates (with British pound and Japanese yen). However, no evidence of unidirectional or bidirectional causality between stock prices and exchange rate (with German mark) was found either in the short run or the long run. The overall evidence supports the goods market approach to exchange rate determination. John (1994) investigated the empirical relation between inflation and stock return of 10 industrialized countries and found that inflation adversely affects the stock return.

Applied Economics Journal, Global Financial Meltdown, Economic Recession, Foreign Exchange Rate, FER, Gross Domestic Product, GDP, Domestic Stock Market, Indian Economy, Monetary Policy, Foreign Direct Investments, FDIs, Fast-Moving Consumer Goods, FMCG, Investment Banks.