Macroeconomic Variables and Indian Stock Market Return:A study

Abstract

India ranks sixth largest economy in the world by gross domestic product (GDP). In 2018 India’s economy became the world’s fastest growing major economy surpassing China. The stock market is mirror of the economy. There are so many macroeconomic variables like inflation, interest rates, GDP, FII investment; prices of crude oil, exchange rate of currency etc. can affect the return of the stock market. The aim of the research work is to measure the year wise change in FII investment in equity, year wise change in Brent crude oil price, year wise change in the INRUSD exchange rate and year wise change in the return of market (NIFTY) and find out relation between change in macroeconomic variables and the return of the Indian stock market for a period of ten years from year 2009- year 2018. Collected secondary data are analysed by statistical measures like mean, median, standard deviation, skewness, kurtosis, correlation matrix, multiple correlation and regression. It was found that Change in FII investment in equity and NIFTY return and Change in INR-USD exchange rate and Change in Crude oil price are positively related. And Change in Crude oil price is negatively related with Change in FII investment in equity and NIFTY return.