AN EMPIRICAL ANALYSIS OF NSE NIFTY PERFORMANCE AND TERTIARY SECTOR GROWTH: EVIDENCE FROM INDIA

Abstract

Purpose: This study aims to determine the cointegrating and causal relationship between NSE Nifty and the gross value added (GVA) by the tertiary sector. The impact of NSE Nifty on the gross value added (GVA) by the tertiary sector of the economy has been studied in detail. The stock market is considered the barometer of the economy. Design/methodology/approach: This study used a vector error correction model to analyze the annual data of the NSE Nifty Index and gross value added by the tertiary sector empirically for the period 2000-2001 to 2020-2021 using software Eviews 11. Findings: The result of the vector error correction model indicates that when the long-run equilibrium deviates, the GVA by the tertiary sector adjusts to restore stability by rectifying the disequilibrium by 35 percent. Similarly, the Wald Chi-square value and coefficient of error correction term between the NSE Nifty and tertiary sector revealed that NSE Nifty is the leading indicator of the tertiary sector in both the short and long run. The results imply that the tertiary sector will develop when the NSE Nifty rises and that tertiary sector growth will follow in the same manner. Research limitations/implications: This study suggests that investors may foresee the adjustment in the tertiary sector's movement by focusing on NSE Nifty's movement and making successful investment choices. Originality/value: The most recent data are used in this study to determine the rate at which variables adapt toward long-run equilibriuma