Sectoral Analysis of Stock Returns: A Comparative Study of Tech and Energy Stocks in India

This research examined the comparative stock-return behaviour of technology and energy sectors in the Indian equity market. Using a sample of 182 observations, the study evaluated return, volatility, risk-adjusted performance, correlation structure, SEM path coefficients and AMOS model-fit indices. The analysis shows that the technology sector provides higher average returns than the energy sector. This result is consistent with the growth-oriented nature of Indian technology companies, which benefit from software exports, digital transformation, cloud adoption and global outsourcing demand. However, the same sector also shows higher volatility and beta, proving that higher return is accompanied by higher market sensitivity. The energy sector produces more moderate returns but demonstrates a relatively stable risk profile. Its return behaviour is influenced by oil-price sensitivity, energy demand, regulatory decisions and infrastructure requirements. Energy stocks may not always outperform technology stocks in capital appreciation, but they play an important stabilising role in diversified portfolios. The moderate correlation between technology and energy returns strengthens the argument for combining the two sectors rather than treating them as substitutes. The SEM and AMOS results add depth to the financial analysis. Market return, sector index movement, earnings growth and market capitalization show significant positive effects on stock returns, while volatility exerts a negative effect. Oil sensitivity has a significant effect on energy returns but not on technology returns, confirming the sector-specific nature of return determinants. The AMOS fit indices show that all five proposed models are statistically acceptable, with Model 3 on firm fundamentals showing particularly strong fit. These results indicate that both market-level and company-level factors are necessary for understanding sectoral stock returns. The study concludes that technology stocks are suitable for growth-seeking investors who can tolerate volatility, while energy stocks are valuable for stability and diversification. The most practical investment implication is that sectoral allocation should be based on risk-adjusted performance, structural drivers and macroeconomic sensitivity, not only on past returns. For students and researchers, demonstrates how SEM and AMOS tests can be integrated into stock-market research. For investors and portfolio managers, it offers a disciplined framework for comparing Indian technology and energy stocks and building more resilient portfolios.

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