Impact of Macroeconomic Variables on Stock Market—An Empirical Study

K. Dhingra () and S. Kapil ()
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K. Dhingra: IIFT, Delhi
S. Kapil: IIFT, Delhi

Chapter Chapter 12 in Trade, Investment and Economic Growth, 2021, pp 177-194 from Springer

Abstract: Abstract Activities in the stock market are moderately unstable as well as occasionally changes in prices of share can appear resulted as of economic factors. However, there are definite fundamental factors which have a sturdy control over the progress of the stock market in common. This study is initiated to observe the association amongst macroeconomic parameters and India’s stock market. The multivariate regression study helps to recognize the impact of macroeconomic factors on stock market of India. The explained parameters in the analysis comprise BSE Sensex (closing price) and Nifty, whereas the descriptive factors are wholesale price index (WPI), money supply (M3), consumer price index (CPI), index of industrial production (IIP), trade balance (TB), gold price (GP), call money rate (CMR), exchange rate (ER) and foreign portfolio investment (FPI). The statistics used in the analysis is the monthly data, and era of the learning has been measured from year 1993 to 2019. Essential data are composed from secondary sources. The major purpose of the study is to learn the influence of particular economic factors on the progress of BSE Sensex and Nifty. Pearson’s correlation analysis, time series analysis and multiple regression test are useful to observe the relationship between stock market and the economic elements. It has been found that all parameters play momentous part in influencing the stock market.

Keywords: Stock market; BSE sensex; S&P nifty; Macroeconomic variables; Share prices (search for similar items in EconPapers)
Date: 2021
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DOI: 10.1007/978-981-33-6973-3_12

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