CORRELATION BETWEEN MACRO ECONOMIC FACTORS AND STOCK INDEX

This paper studied about the role of macroeconomic factors on stock indices. Many authors by now looked upon this relationship through various factors. Here, we considered factors such as interest rate, foreign exchange currency, international trade, foreign exchange reserve. we took monthly data of all the factors for the Jan 2010 to April 2020. And chosen BSE index monthly data as dependent factor. After applying multiple regression model, We understood that there was a significant impact of international trade and foreign exchange reserve on BSE indices whereas exchange rate was relatively less important for the movement of stock indices as per the data for the given period. Finally, We could infer that there is still a lot to cover in this domain as we have also considered few selective factors and there can be more such factors which affects the Indices performance.