Impact of Macro Economic Indicators on NIFTY

Abstract

This paper inspects the interdependence between the macro economic variables and a popular stock market health indicator, NIFTY in India. In order to attain the target, the weekly time series NIFTY data over a decade i.e. from January 2009 to December 2019 was analyzed. Ten major macro-Economic Indicators were tested onto stationarity using Augmented Dickey-Fuller test. The results explain that when there was an increase in INR/USD Exchange rate, Unemployment rate, Interest rates had a dismissive impact on the market or nifty. However the Crude oil, M3, IIP and Real Gross Domestic Product had a pragmatic impact on the market or NIFTY. In conclusion the study says that macroeconomic variables cannot be disdained since they impact the behavior of the stock market.