Relationship Between Macro-Economic Indicators and Stock Exchange

Stock market plays a significant role in development of the countries in economic aspects. Having knowledge on the stock market helps the public, policy makers and investors of the country. The fluctuation and growth rate of the stock price helps the investors and public to plan future investment and for the policy makers to prepare the framework for sustainable economic growth of nation. Rate of inflation, exchange rate, balance of trade, and Industrial production index are the most important macroeconomic variables affecting the Indian economy. This study contributes to investigate the casual relationship between these macroeconomic variables and stock prices. The investigation process includes research procedures like literature review and focus group methods to gather information. In literature review various books, articles and journals are referred to gather theoretical background on the topic. Focus group research is conducted by involving twelve stock analysts belonging to three different stock broking companies to gather realistic information. The information collected from both the research methods are aggregated and generalized to draw ultimate findings and conclusion.

Bilbliography:

1. Pankow D. (2005). Understanding Stock and the stock market. Published by: North Dakota State University. http://www.ag.ndsu.edu/pubs/yf/fammgmt/fe605.pdf

2. Narayan A Sah. (ND). Stock Market Seasonality: A Study of the Indian Stock Market. University of Petroleum & Energy Studies, Gurgaon. http://www.nseindia.com/content/research/res_paper_final228.pdf

3. Ahmed S. (2008). Aggregate Economic Variables and Stock Markets in India. EuroJournals Publishing, Inc. http://www.eurojournals.com/irjfe%2014%20shahid.pdf