Impact of Macro – Economic Factors on Indian Stock Market- A Research of BSE Sectoral Indices
R. Venkatamuni Reddy1, Raghavendra Nayak2, Nagendra S3, Ashwith4
1R. Venkatamuni Reddy, Professor, Department of Commerce, Manipal Academy of Higher Education, Manipal, (Karnataka), India.
2Raghavendra Nayak, Assistant Professor, Senior Scale, Department of Commerce, Manipal Academy of Higher Education, Manipal, (Karnataka), India.
3Dr. Nagendra S, Associate Professor, Department of Business Administration, Alvas Institute of Engineering and Technology, Mijar-Moodbidri D.K. (Karnataka), India.
4Mr. Ashwith, Assistant Manager, Department of Trade Finance Kotak Mahindra Bank Limited, Trade Processing Centre, Kotak Infinity, Vaidya Marg, Malad (E) Mumbai (Maharashtra), India.
Manuscript received on 06 August 2019 | Revised Manuscript received on 29 August 2019 | Manuscript Published on 05 September 2019 | PP: 597-602 | Volume-8 Issue-2S7 July 2019 | Retrieval Number: B11100782S719/2019©BEIESP | DOI: 10.35940/ijrte.B1110.0782S719
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© The Authors. Blue Eyes Intelligence Engineering and Sciences Publication (BEIESP). This is an open access article under the CC-BY-NC-ND license (http://creativecommons.org/licenses/by-nc-nd/4.0/)
Abstract: Macro-Economic factors plays a major role in decision making. Evaluation of macroeconomic environment is required to examine the behaviour of stock prices, which further influences the investor’s investment behaviour. Even though some macro-economic factors are not directly related to the company or industry, but those factors has an impact on stock prices, further economic activity in the domestic and global level has its own impact on stock market. When economy of the country grows hastily, it leads to faster growth in the industry and vice versa. Financial market plays a central role in the performance of financial system of an economy. Stock market is a market where securities of listed companies are exchanged between different investors, it is very responsive market which, gives a stage to investors to invest their money in various securities. Market indices are the tools to measure the performance of various securities of stock market and Investors make use of those market indices to analyse performance of those industries in which, they prefer to invest. This study takes into account six macro-economic factors (Crude oil Price, Gold Price, Silver Price, Exchange Rate, Inflation and Interest Rate) to study & analyse the impact of these variables on selected sectoral indices at BSE, SENSEX, S&P BSE BANKEX, S&P BSE Oil and Gas, S&P BSE Capital Goods, S&P BSE Consumer Durables, S&P BSE Reality, S&P BSE PSU and S&P BSE Power. The study shows that gold price, exchange rate, consumer price index and interest rate are positively correlated with four indices but crude oil price and silver price have positively correlated with 3 indices. So from the result it is clear that investor need to take of all the variables for their investment decision and the investment banker also take care of these indicators before giving suggestion to their clients.
Keywords: Macro -Economic, Stock Market, Market Indices, SENSEX, BSE, Inflation, Interest Rate.
Scope of the Article: Marketing and Social Sciences