Nexus between macro economic factors and S&P sensex movements

Abstract

The Indian stock market is vibrant and dynamic in nature; it has been going through many economic reforms structural changes after liberalization Indian economy since 1991 to till date. The Indian economy follows free market economic system, which enhance the scope of investing into stock market. Thereby stock market (Sensex) performance influenced by macroeconomic fundamentals, the present paper has investigate the nexus between Sensex and macro economic factors GDP growth rate, Exchange rate, inflation rate, Gold Prices, IIP and FII. The stationarity between macro economic factors and Sensex movements measured through employing ADF stationarity test, and Engle-Granger Co-integration to test the long run relation.