Impact of Macroeconomics Factors on Stok Market Performance “A Panel Data Analysis”

Impact of Macroeconomics Factors on Stok Market Performance “A Panel Data Analysis”

David Singh, Jaya
Department of Management Studies,
Indian Institute of Information Technology, Allahabad.

Abstract

Using a panel data analysis approach, this research identifies the impact of GDP growth on stock prices across sector wise indices including BSE Sensex, Bankex, FMCG, Oil &Gas Healthcare and Information technology in India. This study explores the relationship between macroeconomics factors specifically GDP growth and Indian stock market. The analysis uses descriptive statistics and quantifies the relationship with ordinary least squares (OLS) regression.

The results show that higher stock returns are driven by larger GDP growth across all sectors. GDP growth in regression coefficients has a significant p-value of less than the 0.5. Then it shows that GDP growth has an important impact on the stock price, with different sensitivity among sectors.

The study highlights the significance of GDP growth as an important driver of market behaviour, providing useful insights for investors and policymakers. The paper ends with suggestions for future studies to investigate other macroeconomic elements including industry-specific analysis providing a certain level of comprehension of the economies and potentials in investment.