The impact of macroeconomic variables on Indian financial markets is becoming an essential topic. The study was done on the basis of monthly data taken from January to December of last year. In the study the analysts used a multiple regression model, Correlated time and price analysis, unit root test and Momentum test were applied for the analysis. The results of this study has shown that the impact of different macro economic variables on financial markets has a direct relation with the changes in BSE market price index.
In order to find out which of the macro economics variables are responsible for the changes in the BSE Index, it was necessary to do a statistical analysis of changes in BSE Index by taking into account the impact of different macro economic variables in the economic situation of the country. Using a regression model is one of the best ways to analyze the relation between variables in a country and the change in the market price index. To get an idea of the effect of the various variables, the regression model was used for calculating the R-squared value of the results.
After doing the statistical analysis, the results showed that the macro variables had a greater impact on the BSE Index than the other factors like demographics, unemployment rate and government expenditure. When compared to the changes in the other economic variables, there was a definite relation between the change in the price index and the impact of the economic factors in the country. In the other countries like USA and China, the impact of these economic factors was much less on the prices of the goods and services and hence it was not visible in the price of the stocks. In India, the price of the stocks was affected directly by the changes in the economic conditions of the country.
Although the results of the studies showed that the impact of the macro-economic factors on the BSE index had a direct relation to the change in the prices, the changes in the prices did not affect the value of the BSE Index. In fact the value of the BSE Index is still higher after the economic analysis was done as compared to the values before the economic situation was changed. However, it has been seen that when the values of the different economic factors were measured in relation to each other, the difference in the values came down.
However, the impact of these factors on the financial market and the economic position of the country is seen on the basis of the changes in the BSE Index and the values of the other economic factors. variables. Since the financial conditions of the country are influenced by all these factors, changes in these factors have to be taken into consideration before they can affect the value of the stock market or the financial markets of the country. This means that the impact of the macro-economics . . . . . . variables on the BSE Index can be seen only after the changes in the other factors are taken into consideration.
These changes are only visible when we take into consideration the influence of the different variables at the same time, because the impact of any one of them cannot be seen without taking into consideration the changes in the other ones. The results of the study have shown that the value of the stock markets can be determined with the help of the changes in the other variables as well.