IMPACT OF MACRO ECONOMIC VARIABLES ON STOCK PRICE: EVIDENCE FROM BOMBAY STOCK EXCHANGE, INDIA

Author (s) : V. Selvambika, P. Rajeshwari, N.Rahamathunisha, Dr.R.Agila

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Abstract :
The present study has been undertaken to examine the empirical relationship between Bombay Stock Exchange (BSE) equity share prices and the macroeconomic variables such as: interest rate, inflation rate, and exchange rate for the period 2016-2021. To estimate the relationship and its impact of explanatory variables on stock price; Correlation analysis, Regression Analysis have been used. The results revealed that interest rate and inflation rate, has significant impact on the market price of share. Inflation rate being the strongest determinants of market price and it is having inverse relationship with the share price movement. From the study, it is evidently understood that macroeconomic determinants possess strong explanatory power and hence, can be used to make accurate future forecasts of stock prices. So, investors are suggested to take care of accounting variables of company before investing.

Keywords : Macro Economics, Bombay Stock Exchange

Conference Date : 13/11/2020

Pages : 85

Paper ID : 20085