Abstract
With increased growth in the stock markets in India, the relationship between economic growth and stock market performance has become a matter of intensive theoretic and empirical research. This research paper focuses on analysing this relationship for a 12 year time period (2005–17). GDP is used as aparameter for measuring economic growth, and its relationship with broad-based market indices-SENSEX and Nifty50 is analysed. The primary objective is to ascertain the nature and direction of relationship between the variables. The research makes use of Regression Analysis and Granger Causality Test in order to determine the relationship and causality. The study reveals that there exists a uni-directional causal relationship between GDP and NIFTY50 returns as well as GDP and SENSEX returns which move from the direction of the index returns to GDP.
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