THE IMPACT OF MACROECONOMIC INDICATORS ON THE PERFORMANCE OF INDIAN STOCK MARKET – AN ANALYTICAL STUDY

M. Anbukarasi, M. Devaki

Abstract


The Indian Stock market plays a crucial role in the mobilization of capital in emerging developed countries. The study aims to assess the relationship among the macroeconomic variables on CNX Nifty. The secondary data has been taken from World Bank indicators and National Stock Exchange for the period of ten years starting from 2008 to 2018. For this purpose, six macroeconomic variables are selected for the present study namely, GDP, Real interest rate, unemployment rate, Money supply, Inflation rate, Foreign Direct Investment, and stock market indices - S&P CNX Nifty. This study also made an attempt to analyze the cause and effect of select macroeconomic variables on CNX Nifty. The statistical tools are Karl Pearson's Correlation, Augmented Dickey-Fuller - Unit Root Test and Granger Causality test have been used. The study found that Money supply and GDP are highly positively correlated in CNX Nifty. The results of Granger causality test depict that the univariate directional relationship among the select macroeconomic variables on Indian stock market.

Keywords


Indian Stock Market, GDP, Inflation rate, Macroeconomic variables, Augmented Dickey-Fuller - Unit Root Test, Granger Causality test.

References


Henry O, and Olabanji EO. (2013). “Stock Market Performance and Sustainable Economic Growth in Nigeria Using the Bounds Testing Co-integration Approach”, Journal of Sustainable Development, Vol.6(8), pp.84-92.

Ngerebo ATA. (2016). “Monetary Policy and Inflation in Nigeria”, International Journal of Finance and Accounting, Vol.5(2), pp.67–76.

Singh P. (2014). “An Empirical relationship between selected Indian stock market indices and macroeconomic indicators”, IMPACT: International Journal of Research in Business Management, Vol. 2(9), pp.81–92.


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