Impact of Macro-Economic Variables on Stock Prices in India
Global Journal of Management and Business Research, Vol. 10, No. 7, 2010
18 Pages Posted: 2 May 2011
Date Written: August 1, 2010
The paper analyzes long term relationship between BSE and macroeconomic variables, vis-à-vis, change in exchange rate, foreign exchange reserve, inflation rate and gold price. The multiple regression equation model (Galton, 1877) in order to investigate the relationship among these factors. The period of the study is January 2008 to January 2009. Results reveal that there is high correlation between the empirical results reveal that exchange rate and gold prices highly effect the stock prices on the other hand the influence of foreign exchange reserves and Inflation on the stock price is upto limited extend only.
Keywords: macroeconomic variables, multiple regression equation model, foreign exchange reserves, inflation
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